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Senate rejects move to dump car industry plan

Fighting back: Labor’s industry spokesman Senator Kim Carr has won the backing of the crossbench to save car industry plan funding from the government knife.

Independent senators join Labor to preserve remaining funding for car industry

25 Nov 2014

THE Abbott government’s move to abandon the $900 million Automotive Transformation Scheme (ATS) – the guts of Australia’s car industry plan – has been thwarted in the federal senate by a coalition of Labor and crossbench senators.

These senators – including South Australian Nick Xenophon and Victorians John Madigan and Ricky Muir– now plan to band together to co-sponsor a bill with Labor to establish a one-year senate inquiry into the future of the Australia car industry.

Senator Muir, of the Motoring Enthusiasts Party, is believed to be leading the Palmer United Party (PUP) senators on this issue under his co-operation agreement with the PUP.

As well, the Greens and newly independent Tasmanian senator Jackie Lambie have indicated they will support the action that has been championed by Labor industry spokesman Senator Kim Carr.

“I believe a new phoenix can arise in the car industry,” Senator Carr told GoAuto after the coalition of senators was formed.

“The department (of industry) has indicated there have been three approaches to the government from entities interested in participating in the car industry plan,” he said.

Senator Carr said the situation in Australia was similar to that after Prime Minister Margaret Thatcher was forced to step down in the UK.

“The British political system realised then that the UK economy needed a automotive industry,” he said. “I believe Australia does, too.” Senator Carr said a future car industry did not need to be based on the old business model.

“Why close our minds to new technology? “We have reached a very high level of development in Australia. The cars we are making now are world class.

“I don’t want Australia to lose those skills. I know we can develop new technologies and new business models. There are lots of things we can do.

“I don’t accept the Liberals’ approach to industry.” The move by the minority senators to protect the ATS was greeted warmly by the Australian Motor Industry Federation, the peak body of the state and territory motor trades associations.

“The senate inquiry represents a truly effective means of addressing the future of an industry that touches the lives of every Australia,” AMIF chief executive Richard Dudley said in a media release.

Mr Dudley said the AMIF would hold its own automotive industry summit to identify common issues, industry sector inter-relationships and proposed responses for presentation to the one-year senate enquiry.

He called for a national industry plan, adding: “Ad hoc and isolated policy development is not sustainable.

“The findings, recommendations and decisions arising from a raft of recent reviews and inquiries dealing with issues such as the closure of automotive manufacturing, competition, taxation, motor vehicle standards, vocational training and others, while serving some purpose, could work against each other and are wasted unless they are part of identifying a broader, consistent and cohesive future national plan.”

Mr Dudley said the proposed senate inquiry should help identify future policy settings and industry action that would restore confidence for future capital investment, create job opportunities and protect and enhance the nation’s automotive knowledge skills bank.

The move to establish the senate inquiry was also welcomed by the Australian Manufacturing Workers’ Union.

“The Abbott government’s treatment of this (automotive) industry has been nothing short of a disgrace,” said AMWU secretary Dave Smith.

“This inquiry is an opportunity to do something positive for the sector and the tens of thousands of workers it directly employs.” Mr Smith said the government’s plan to abolish the remaining $900 million in the ATS and replace it with a $3 million grant to aid companies as they transition from automotive to other sectors was not just a case of mixed priorities.

“It is industrial sabotage and a direct attack on tens of thousands of workers and their communities,” he said.

Among other things, the inquiry will look at how to preserve skills and industrial capabilities so that Australia can engage in advanced manufacturing and reduce its dependence on commodity exports.

It will also examine the role every sector in the automotive industry can play in creating an advanced broad-based economy.

It will also look at the new propulsion technologies such as hydrogen and electric motors, examine new business models including employee share businesses and attracting international venture capital.

The coalition of senators blocking the government’s bill to cancel the ATS came together during hearings by the Economics Legislation Committee of the senate.

The committee was chaired by South Australian Liberal Senator Sean Edwards, and he wrote the majority report recommending the bill be passed by the Senate.

In the majority report, Senator Edwards said the proposal to close the ATS was “consistent with the government’s election commitment to measured and responsible spending commitments.

“The committee notes that Australia continues to play an important role as an innovator in research and development of automotive and related technologies.

“However, the committee is not persuaded that funding available under the ATS should be continued beyond the closure of local car manufacturing in Marc h 2018.” Other senators supporting the majority decision were David Bushby (Liberal, Tasmania), and Matthew Canavan (Liberal National Party, Queensland).

The minority report was written by Senator Carr and Nick Xenophon (Independent, South Australia).

In addition, Senators Muir and Madigan were attached to the Senate Economics Legislation Committee as participating senators. They both supported the minority report.

Senator Carr replaced Labor Senator Sam Dastyari on the committee on October.

The minority report by Senators Carr, Xenophon, Muir and Madigan showed their most pressing concern with the bill was the risk that it would prompt early closures throughout the automotive supply chain, forcing car-makers to leave earlier than indicated.

The ATS had to be retained so that manufacturers and parts makers could continue to innovate and regenerate their businesses.

“To secure this regeneration there must be clear policies that allow Australia to maintain crucial manufacturing capabilities, secure new investment and jobs and support future growth.” The government’s bill to abolish the ATS and the $900 million in funding still remaining in the scheme was passed in the House of Representatives on October 2.

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