After two years of waiting, the Government has finally released its response to the 2015 Senate Inquiry into the future of the automotive industry following a Senate order to do so.
The response is a true reflection of the Abbott/Turnbull Government’s apathetic attitude towards the automotive industry.
We find ourselves facing the closures of Toyota and Holden next month, purely because the Liberals failed to see the value in retaining this high-tech, advanced manufacturing industry and the high-skilled, high-wage jobs it sustains.
The Liberals have treated this industry with open contempt since they formed government.
The country must now brace for an estimated negative annual shock of $29 billion— or two per cent of GDP.
However, we will need to contend with more than just the economic cost of the auto closures.
There is the human misery, the cost of increased social security payments and the risk of losing our advanced manufacturing capability, which makes this such a national tragedy.
Already we are seeing massive increases in applications for social security in the suburbs that surround the major automotive plants.
More than 4000 Australians have recently joined the dole queues in the suburbs of Elizabeth and Craigieburn. Welfare payments in these two suburbs alone are estimated to cost the Commonwealth close to $105 million a year.
This pattern is also appearing in other parts of western Melbourne, like Werribee and Derrimut.
Commonwealth expenditure in social security payments will far exceed what it would have cost to retain the automotive industry through the legislated Automotive Transformation Scheme.
Meanwhile the CEO of the Government’s Advanced Manufacturing Growth Centre is getting paid $485,000 a year, without providing any evidence that there is any benefit to auto workers.
Applications are now closed for firms wishing to access support from the Advanced Manufacturing Growth Fund. Eighty-one applications have been received with no guarantee of money for the automotive supply chain. The Fund does absolutely nothing for components manufacturers in NSW and QLD.
The automotive industry has historically been the largest R&D contributor in the Australian manufacturing sector – investing close to $700 million annually. However, despite the Prime Minister’s rhetoric on encouraging innovation and investment in R&D, the government was only too happy to see their biggest innovators pack up and leave the country.
Despite the closures, the automotive industry remains Australia’s great repository of skills and capabilities in advanced manufacturing – it is a powerhouse of innovation, research and development, and engineering and design talent.
These capabilities must be retained to attract new investment that provides high-skilled, well-paid jobs.
That can only happen if there is the political will to make it happen.