The future of Holden in South Australia
Senator WRIGHT (South Australia) (16:24): I rise to support this urgency motion, because this issue of co-investment with the automotive industry is urgent. It is urgent because it poses a serious question for Australia that we have grappled with periodically without coming to a clear conclusion: do we want to be a nation with manufacturing capacity? It has been pointed out that we are currently one of only about a dozen nations which can manufacture a vehicle from start to finish. The motion is also urgent because this issue has human consequences. The automotive industry in Australia employs about 46,000 people, and a further 76,000 are employed in transport equipment manufacturing. If General Motors makes the ultimate decision to shut down operations in Australia, there is the potential for horrendous job losses-let us not shy away from that-as well as the loss of skills and our manufacturing capacity.
In my home state of South Australia, Holden is a major employer, employing 1,700 people directly, and it creates far more indirect employment, in the northern suburbs of Adelaide and in other associated industries. It has been estimated that the closure of Holden would cost the South Australian economy $1.24 billion and cost 13,200 jobs. I am very conscious that these workers are facing a distressingly uncertain future as speculation and predictions about the closure of Holden are rife. This Christmas they will be heading into a summer break with the knowledge that their livelihoods are again and increasingly in limbo.
Doubt and uncertainty are not strangers to the automotive manufacturing industry in Australia, of course, nor indeed to its parent industries, especially when it comes to Holden's parent company, General Motors in Detroit, which faced imminent bankruptcy in the global financial crisis. Looking into the future, even with a subsidy it is very obvious that business as usual in the vehicle-manufacturing industry in Australia is not a realistic option. With the known contribution of fossil fuels to dangerous climate change and the looming prospect of peak oil, we must urgently confront issues of car dependency and our addiction to fossil fuels. There is no doubt we must move swiftly to an economy based on renewable energy, energy efficiency, smart technology and innovation. But these trends have been known for some time.
Let us be very clear: the history of General Motors on adaptation and facing these challenges has been woeful. For years, their competitors developed more efficient cars, spurred by high fuel costs in the rest of the world. Protected by low oil prices in the United States, however, General Motors continued to manufacture massive, inefficient vehicles until the height of the global financial crisis. They were only saved from bankruptcy by a bailout of taxpayers' money, reportedly to the tune of $49 billion. Their subsidiary Holden have shown a similar approach, failing to adapt sufficiently to changing market signals and ultimately failing to manufacture the cars that Australians want to buy.
That said, there is justification for government support for an industry which is important to our manufacturing capacity and provides crucial employment for tens of thousands. The Australian Greens know that subsidies for carbon-intensive industries like car manufacturing are not, in an economic vacuum, the best value for taxpayers' money. However, we also know the enormous social costs we would incur in the event that Holden withdrew from Australia. The transition to modern, efficient industries must be carefully managed, and communities must be supported in this transition. People's skills must be developed.
It is regrettable that the history of government support for the car industry in Australia has been a series of sadly missed opportunities. Successive governments in Australia have failed to use support for the auto industry to drive innovation. The Greens are on the record as supporting co-investment in the car industry, on the condition that it adopts goals and milestones for electric vehicle development and manufacturing, moving us to the future. If exercised in a principled, thoughtful and far-sighted matter, co-investment offers the opportunity to set us on a better path, but we can and we must set appropriate conditions on our assistance to firms like Holden which will create the right investment climate for jobs and technology in Australia, and there must also be transparency about the quantum of any support and accountability for how it is used. Our support for co-investment in Holden has the clear aim of supporting the communities that are involved in car manufacturing, but we call for this investment to have conditions and criteria that are as clear-eyed and as hard-headed as our vision. Holden must be held to account for their own sustainability and viability and for how they will continue to support communities like those in South Australia.