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Interview on 891 ABC Radio Adelaide

31 October 2013

Interviewer: 
Ian Henschke

Subject: Australian automotive industry, Productivity Commission review

E&OE

JOURNALIST: If you work in the car industry in South Australia you'd be thinking to yourself well what sort of a Christmas would I be having or maybe you're one of those people that's connected to somebody who works in there or the spare parts, we heard that yesterday when Peter Martin was talking about the extended family if you like of people involved in the car industry.  Well, what's going to happen?  What will happen over the next month, year?  Industry Minister Ian Macfarlane might have some of those answers.  Last night Minister Kim Carr says there was so much uncertainty it would kill the industry.

IAN MACFARLANE: Good morning Ian and I'm disappointed in both the politicking that's coming from the Labor Party and the misunderstandings that that's created.  The reality of this process was always the same.  When I walked through the Holden plant with the Premier Jay Weatherill with as many Labor and Liberal politicians as I could muster and the Mayor of Playford, I made it clear that there would be a process that would be based on sound principles and that that process would be around having a PC inquiry, an interim report before Christmas and perhaps a cash injection into the industry around that time, a small cash injection relative to the size of the industry and then a final answer towards the middle of next year.

Now nothing has changed.  Everyone understands that if you're going to make an economic decision in terms of hundreds of millions of dollars of taxpayers’ money, it has to be based on sound principles and that's what the PC inquiry is all about.  I'm very disappointed that Jay Weatherill has decided to pull the political lever and turn this into a political football because Jay knows that his desire to be re-elected is now jeopardising - his desire to be re-elected as the Premier of South Australia and his job ambitions - is now jeopardising the jobs at Holden.  The only way we'll resolve this issue is that if all politicians work together.  And nothing has changed despite what Mr Weatherill said yesterday, the PC process was always an interim report at Christmas and as we saw from yesterday a report to government by the end of March and a response by April/May.

JOURNALIST: Okay but you can understand his position because the result will...

IAN MACFARLANE: No I don't...

JOURNALIST: No if you're not going to give a result until after the election, he goes into an election saying I don't know what one of the biggest industries in South Australia's future is and I think he would have liked to have gone to an election saying well we've stitched this up. Because we saw the State and Federal Government say they were going to put money and lock the car industry in for the next decade ahead.  Is that now in doubt?

IAN MACFARLANE:  No I mean nothing's changed and what I do understand about Jay Weatherill's position is he wants an answer before the state election.  He didn't actually tell me that.  When he stood beside me and I said this is the process Jay and I was talking to Mike Devereux, interim report by Christmas, final report in response from the Government by the middle of next year.  He sat there silent.  Now all of a sudden he's decided he wants to turn this into a political issue and that will be the death knell of Holden.  That politicisation of a solution to the car industry problems in Australia will be the death knell of the industry.  Not anything else.  So we need to understand this was always going to be the case.  It was always going to be a process.  This process is much faster than the one I embarked on in 2003 when the Productivity Commission reported to me and recommended that further assistance be provided to the industry.  So again Jay Weatherill's wrong about that.  He said the other day that the PC inquiry will be the death knell for the industry.  He doesn't know that.  It wasn't last time.

So I'm asking Jay to stop politicking on this issue, get back into the tent with the rest of us, work together with John Camillo and the unions and the mayor and the local politicians and Denis Napthine and Ian Macfarlane and the Federal Government to come up with a solution because a solution is not guaranteed, but our best chance of getting that solution is to have everyone working together and to have a Productivity Commission review that shows us exactly what other countries are doing with their car industry. Now 42,000 people in Australia are employed in this industry.  It is a highly sophisticated manufacturing industry, but countries like Germany are subsidising their industry almost double per vehicle.  Now they're a modern economy, we want to know why they do that so we can make an informed decision about how we give this industry long term viability in the next decade.

JOURNALIST: Industry Minister Ian Macfarlane, if you go to countries like France for example where they have a local industry as well, a lot of people drive French cars.  In Australia it's almost the consumers here have turned against the car itself.  I mean would it help if there was a policy to have all government cars everywhere Australian made, I mean we often hear that when we have talkback on this.  Why for example are there Toyota Prius' rolling around the place instead of Holdens?

IAN MACFARLANE: Yeah well I mean in terms of those policies that's all part of the next in terms of what we consider and some State Governments have moved to an Australian car only position and I certainly support that.  The reality is though that we need a refresh in Australia's car manufacturing, particularly the Falcon and the Holden are very old platforms and Mike Devereux knows this, he's got a new model up his sleeve which he wants to release in 2016/17.  That will turn Australian consumers back to Australian built cars.  Toyota are obviously building a global car and their sales are very strong with the Camry and also with the Hybrid Camry.  So we are getting sales penetration there but the reality is that only 12 per cent of the cars bought in Australia are made in Australia and that's a consumer decision and that says to me the customer's always right and we need to build cars that Australian people want

JOURNALIST: Is this well known about this new car, the 2017 Holden that's going to change the - well hopefully change the attitudes of Australians?

IAN MACFARLANE:  Well it's certainly understood in the industry and how well known it is I'm not sure but it's no secret that part of this car plan is to lay down a platform where GM can introduce a new car, a successor to the Commodore into the Australian market.  Now, they're not going to do that until they see a long term solution and that's fair enough because it's an investment of billions of dollars by them.  But as Mike Devereux understands and whoever his successor will be will understand, this is going to take some time by the Government, as I said a faster process than last time with the PC but it's still a process that is going to take six to eight months.  Everyone understood that right from the start.  I've only been in this position six weeks.  I'm going at this as hard as I can, I'm in Japan at the moment, I had talks yesterday with Toyota which were could I describe, Ian, as full and frank, but obviously constructive.  And so my goal is to get a car industry plan together as soon as possible. Now there is division in the community about whether we continue to support the car industry and I understand that.  Obviously that division is reflected within government ranks and I understand that.  What I need is absolute rock solid evidence as to why we should keep the car industry in Australia and that's what I'm setting out to do.

JOURNALIST: Just on that point.  You've gone to Japan, you're talking directly with Toyota, Tom Playford who set this entire business up if you like, the way that he modernised South Australia as a manufacturing state, he used to get on a plane and go and talk directly to the heads of the companies in the United States.  Are you prepared to do that?  You're in Japan at the moment, will you go to GM and sit down with them and say well look we've got 42,000 jobs on the line, we've got a couple of states who depend on this as the backbone of their economies, can you as the Minister carry some weight personally and will you go into bat for that?

IAN MACFARLANE: Well I can and I will but the reality is that this week is Japan and next week are commitments in Australia and then we have four sitting weeks between there and Christmas and there simply won't be time.  I've explained to the executives at GM through Mike Devereux that if they need to talk to me, it would be useful if they came here to Australia bearing in mind my commitments to the Parliament in Australia.  There is obviously some ground to be covered before that becomes necessary and Holden have given me no indication - no indication contrary to what the Premier has said, no indication that they can't live within this timeframe.  They said they would prefer an answer by Christmas - I accept that.  The reality is I can't give them that answer by Christmas.

So until we actually get down to where the rubber hits the road literally, there's no point in me rushing off to Detroit because I don't know what I'm offering them.  I was invited by Toyota to come and talk with them in Tokyo, I had to come to Japan as soon as I could anyway because of the enormous importance Japan has in the trade partnership so I've made arrangements to come up here and my first port of call was Toyota.  But the reality is if there needs to be a discussion with GM executives then they can either come here if that's required to happen before Christmas or I if necessary will go there.  But I think it's fair enough to expect that if industry executives need to talk to me that on occasions they actually come to Australia rather than Australians always running after multi-national corporates in Detroit.

JOURNALIST:  Alright thank you very much for your time this morning, we really do appreciate your time this morning.  Ian Macfarlane, Industry Minister calling from Japan there telling us what's happening with this Productivity Commission report.