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Government heralds innovative future

Future planning: Federal treasurer Joe Hockey said the future of the Australian automotive industry lies in innovation, not manufacturing.

Treasurer Joe Hockey says Australia’s auto sector should look forward not back

21 Aug 2015

GOVERNMENTS had to play a smaller role in economic activities and focus on facilitating change, the federal treasurer Joe Hockey told the Australian Automotive Industry National Summit in Canberra this week.

Australia would have to rely on innovation and effort in future for its economic survival, not by attempting to hold back the tide and avoiding reform, Mr Hockey said.

“Technology is an unstoppable tide because it empowers consumers and enterprise,” he told the summit.

“We live in an age of global disruption. The way we see the world, the way we do business, is changing.”

Mr Hockey said the government’s role was to encourage industry and create the right environment in which industry can thrive.

He said the emergence of driverless cars was an example of the innovation that would drive the car industry, despite the fact that leadership is coming from non-automotive companies such as Google.

He cited the scheduled testing of driverless cars on the closed-off Southern Expressway in South Australia, where the government has indicated it would update its road laws to help the adoption of the new technology.

“The benefits are widespread and across the economy. Driverless cars mean freedom for our older Australians, who will be able to get from place to place with ease.

“And they would help deliver greater safety, with nine out of every 10 accidents caused by human error, such as speeding.”

However, it will require some work, including building the infrastructure that will integrate driverless and normal vehicles on the same roads.

“It will take innovation, and it will take an open mind.”

Mr Hockey said the adoption of driverless vehicles would help improve productivity in the Australian economy.

“For example, Rio Tinto has been operating massive mining trucks in Northern Australia from an operations centre at Perth Airport. The trucks operate seamlessly 24 hours a day – and the savings have been enormous.”

But he said former drivers would find better-paid jobs.

“Logistics and transport without drivers may sound threatening for some, but the opportunity to reskill and upskill former drivers of trucks and cars will result in more jobs and better pay for workers in that field.”

He said Geelong, where Ford will shut its engine and stamping operations next year, was already making a transition away from manufacturing.

“Today it is a city of innovation, powered not by one, but many sources.”

He said the announcement by prime minister Tony Abbott of a $14 million Advanced Manufacturing Growth Centre, to be based in an office at Deakin University, would help forge a stronger future.

The decision by Ford in the United States to fit Geelong-made carbon-fibre wheels to its Shelby Mustang GT350R model was a vote of confidence in Australia’s continued role in supplying the global auto market.

Although he was advocating a hands-off approach to industry, Mr Hockey pointed out that the wheel company, Carbon Revolution, benefited from a government-organised Geelong Region Innovation and Investment Fund.

“This is a great story, one of innovation breathing new life into a much-loved industry. It also shows the importance of preparation, of government helping with the transformation process.

“The Coalition will help and encourage workers and firms to seek out new opportunities – to plan for the future and diversify into new markets.”

Mr Hockey also referred to the free-trade agreements recently signed, or still being negotiated, with Japan, Korea and China.

These had opened up new markets for Australian manufacturers, including automotive components manufacturers.

“Under our agreement with Korea, the eight per cent tax on Australia’s auto part exports was eliminated at the time of signing.

“Under our agreement with China, the 10 per cent tax on car engines will become history within four years and tariffs of up to 25 per cent on other parts will also go in that time.

“And under our agreement with Japan, duty-free access to the Japanese market for our auto parts will continue.” He did not say what the value of exports of those products were worth at the present time.

“Those are the facts, and they speak of opportunity – the chance for industry to restructure and enter new global supply chains.”

He said the winners would be the innovators, the entrepreneurs, the “small business heroes” who look to the future and take risks.

“We are shifting away from the Australia of yesterday because we must. That’s the challenge of time, the price of technology. It has happened before, and it will happen again.”

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