17 May 2016
by Andreas Bimba

Rest in Peace

Image of Toyota's Altona car assembly plant

Rest in Peace, another few hundred thousand Australian workers and their families. Labor Senator Kim Carr today fails to deliver for the Australian automotive industry, writes Andreas Bimba.

Yesterday morning (16 May 2016) Labor Senator Kim Carr effectively rubber stamped the appalling policy and actions of the Liberal/National Party-Tony Abbott led federal government in late 2013 that will lead to the imminent closure of much of Australia’s car manufacturing industry and its 200,000 associated jobs.

The last three Australian car manufacturers, Ford, Holden and Toyota will be closing their Australian car manufacturing operations later this year and in 2017. A major policy announcement by the ALP that they would undertake substantial change to Australia’s current industrial policy settings that would force a rethink on viability by the three remaining local car manufacturers, or probably more realistically by some new entrants, was the last real chance that the industry had to continue operations in a substantial way but this did not happen today.

Alternatively if enough of the electorate voted for the Australian Greens so that they were able to form part of our next federal government then again the Australian automotive industry could have a good chance of survival and indeed expansion but reaching the electorate effectively with this message takes time, media access that is currently denied and significant financial resources.

Yesterday morning on ABC Radio National, Senator Kim Carr talked of a $59 million fund to assist with transitioning many of the affected businesses to international markets, new advanced manufacturing niches and with other forms of assistance. To the less well informed this may sound like good policy, and it no doubt is as far as it goes but this sum of money is unfortunately just a trivial token and finally confirms the demise of all of the local car assembly portion of our car manufacturing industry and probably much of the components manufacturing capacity as well. It is in reality yet another betrayal of Australia’s manufacturing industry and Australian families by the ALP which in the final analysis are not that much different than the Conservatives in the economic sphere despite offering better social and environmental policy. The ALP should have, and could have done better to undo Tony Abbot’s and Joe Hockey’s policy failures.

To be fair to Senator Kim Carr he most probably would have wanted to offer more, but a different mindset currently rules the ALP and has for quite a while and his hand has been forced by the decision of the last three local manufacturers to close their local car assembly operations. As previously mentioned a policy platform sufficiently powerful, for example one that offered a moderate imported car tariff of 15% or the equivalent level of ongoing industry support and a realistic plan for regaining market share, should nevertheless have been sufficient to convince some of the existing manufacturers, or new foreign or local car manufacturers, to assemble and manufacture cars in Australia well into the future. It was certainly worth a try and Australia is set to be a big loser because of this lack of political foresight and courage.

The estimate of 200,000 job losses is made up of about 50,000 workers (it’s actually now down to 40,000) directly employed by the remaining three car manufacturers and the car components industry and about 150,000 indirectly in the wider economy using a multiple of 3 to 1. Any businesses that are successful in finding alternative business opportunities will reduce the number of job losses. Note also that the industry is currently operating at less than half the output of what it did before the GFC and so current employment levels are also well down. The potential loss of employment capacity can therefore be reasonably assumed to be up to 400,000 (100,000 direct jobs) if the industry was operating at its easily attainable potential and if very few businesses survive the transition.

I have said this before but I urge all Australia’s politicians and interested parties to visit the Toyota Altona car manufacturing plant, or the Melbourne or Adelaide operations of Holden or Ford and then decide if we as a nation are doing the right thing by sending in the wrecking ball in a few months. I have given a link to Toyota Australia below where guided tours can still be arranged. In addition I have included a link to a very good National Geographic Channel video about the Toyota Altona plant.

There is no good reason why Australia with a new car market of over one million units p.a. cannot continue to have a profitable and large car manufacturing industry but a moderate level of industry support or protection is unavoidable due to the strengths of the competition faced and neither the Conservatives nor the ALP are willing to offer this even though the cost is minor compared to the hidden subsidies currently received by the Australian banking/finance sector, the real estate speculation sector and the mining industry. All of our competitors do offer substantial support or trade protection for their vehicle manufacturing industries because of the net economic benefit and Australia’s level of assistance in the past was consistently one of the lowest. Many researchers have proven that the net economic benefit to Australia of retaining our car manufacturing industry is many multiples higher than the cost to consumers of a moderate imported car tariff of 15% or the equivalent level of ongoing industry support.

Unlike the Conservatives and the ALP, the Australian Greens do however have as policy the transitioning of Australia’s car manufacturing industry to electric, hybrid and renewable fuel source vehicle assembly and component manufacture and also have as policy, the option of industry support and moderate trade protection where necessary to achieve this objective. The car is here to stay and but will need to evolve as it always has and become much more environmentally sustainable than before. Public transport, bicycles and even walking will play an ever bigger role in the future of transport but for many, the much maligned car will still be a worthy transport option.

The Australian Greens also have as policy the transitioning of the Australian economy to a sustainable future and for the establishment of new innovative and advanced locally based manufacturing industries in a much more ambitious and credible way than either of the old party blocs have been willing to deliver or promise. There wouldn’t be any cuts to the CSIRO and higher education under a Greens government but an urgent program of expansion.

As responsible citizens we should think more carefully about our votes, look at the bigger picture and reconsider just automatically voting for either of the old party blocs that time and time again continue to support our destructive and unnecessary journey down the monetarist or neo-liberal path which has led to the net loss of millions of well paid secure jobs for a wide cross section of Australians from unskilled and trades to professionals despite the many glowing promises made along the way.