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Interview with Fran Kelly, ABC Radio National Breakfast

12 February 2014

Subject: Australian industry, automotive sector, skills and training


JOURNALIST: That’s a lot of jobs there lost on your watch, are you embarrassed by that?

IAN MACFARLANE: Well there are a lot of jobs being created and if you look at the forward estimates there will be 630,000 jobs created in Australia in net terms over the forward four years.  So whilst Mr Shorten likes to highlight job losses which came in the main came from decisions the Labor Party made and the seeds were sown during that time, the reality is that the economy is still looking at net growth in jobs.

And that’s really the challenge that we face Fran, rather than going the Bill Shorten way which is to claim catastrophe, we have to recognise that what we have is an enormous challenge, but a challenge which we can rise up and deal with by creating new jobs for Australians, Australians who have skills, particularly in the area of auto construction, and use those skills in industries that are going to be around in 10 and 20 and 30 years’ time.

JOURNALIST: Let’s talk about that challenge, because the Prime Minister told your party room yesterday that quote, there have been economic shocks and there will be more to come.  What shocks are we in for?

IAN MACFARLANE: Well no one would doubt that the economy is going to get tight and that in terms of where industry is going we need to get rid of the impediments on industry. We need to get rid of the carbon tax, the mining tax, we need to get rid of some of the 20,000 regulations introduced by the previous government.  That all has to happen quickly, we have to get investor confidence up and we have to then remove government out of the way of business.  We don’t want a government, as we’ve seen in the previous government, where we are the centre of business.  Business needs to be left to do what they need to do.

If we do that, if we then use the skills and trainings and the universities and some of the concepts that I’m already working on and have been working on since I became Minister in terms of how do we make sure that we’re using the latest innovation, the latest science, how are we collaborating better, how are we getting the CSIRO into the centre of the manufacturing space.  All of those things have to be done as we reposition industry.

JOURNALIST: It’s difficult isn’t it though, to make all those changes at the same time you’re changing industry policy, as the Prime Minister said no more blank cheques, no more chasing unprofitable businesses down the road with blank cheques, you’ve said this is a new time in industry policy.  You mentioned the CSIRO, the CSIRO is losing hundreds of staff because of the tightening of the budget – these are hard things to juggle.

IAN MACFARLANE: Well the CSIRO aren’t losing any staff for essential research, so let’s be clear about that.  But we also should reflect on the fact that if we look at the record of Labor in government, in throwing money at problems - $30 million to Ford to create 300 jobs and what happened – eight months later 330 jobs lost.  Same with Holden - $215 million to ensure Holden’s future to 2022, instead we saw over 650 jobs lost within 12 months.  That is the record of what happens when you just throw money at a problem and don’t do anything about the structural issues.

We are going to make sure that industry repositions itself.  We will supply money for that to happen, but my assurance to the workers at Toyota and Holden and to Ford is that when we create new jobs for them, they won’t be jobs that evaporate in six or eight months.

JOURNALIST: Well what kind of jobs will they be, because the Prime Minister has said a number of times that car workers under your government will be trading good jobs for better jobs.  Does that include building Victorian roads, because that seems to be the only idea I’ve heard come up so far in terms of where some of these workers might be soaked up, to build the Metro Rail or the East West Road Link.  Is building roads a better job than building cars?

IAN MACFARLANE: Well what it does is creates then the opportunity for industries to use that improved infrastructure to be more competitive and create more jobs.  This is a long-term plan and we need to make sure that the infrastructure failure that existed under the previous government is addressed.  But it’s not the only solution.

Using universities as Belinda (Robinson) said this morning on the ABC, to use the training, the skills, the aptitude, the innovation of Australians and create jobs in industries like the ones I saw in South Australia when I was there last week with the panel that’s working on that, like I saw in Victoria two weeks before that.

Australians are great innovators and we produce products which are unique and are world leaders in their field.  We will have to do more of that.  The government will need to make sure that we tap into, as Belinda Robinson said, the universities, the CSIRO, the innovators, that we use the companies that are successful to pull through new companies.

I’ve been working on a strategy in that regard since the day I was sworn in, in parallel to what I was trying to do in the car industry.  This can be a turning point for industry in the most positive sense.  It certainly will be a very significant step-change in industry in Australia.  We need to rise to that challenge and to ensure that what we do is done in a sound, methodical, measured way, because if we don’t we will destroy an opportunity that only comes once in every two or three decades.

JOURNALIST: Well talk is cheap.  How much is the government going to be prepared to increase the money available for education, higher education and training and for support of this in industry assistance?  How much money?

IAN MACFARLANE: Well we will be putting in what is required, but again, let’s assess that first.  And let’s fix some of the structural problems particularly in the training and skills area which we’ve been left, which is just, I have to say Fran, a convoluted mess.  And let’s work it through so that we’re actually producing skilled people who are literate and numerate and able to go out in the workforce and begin productivity straight away for the people employing them.

JOURNALIST: So there’ll be more money in the budget for training, more money in the budget for TAFE, more money in the budget for apprentices?

IAN MACFARLANE: Look, sorry, but you’re talking the Labor way, we’re saying there will be efficient use of the money that’s there. And I can guarantee that the skills training that will be offered will be of a higher calibre and will present workers that are better ready or better work-ready than we’ve seen in the past.

The reality is that we’ve inherited a system in the skills and training area which is so close to broken that we have regular meetings now with people who say for God’s sake just fix this – it is so complicated, it is so heavily regulated, it is so over-audited we’re not getting the results we need to get.  So that’s only part of it Fran.

JOURNALIST: Minister, just a couple of points that are being talked about this morning, calls for the remaining 5 per cent tariff on imported cars to be scrapped, that would reduce the cost of cars by up to $2000.  Is there any justification now for keeping the tariff, there’s no need to protect a locally produced vehicle industry anymore, you may as well give consumers a win.

IAN MACFARLANE: We’ll look at all those issues as we go forward.  But let’s realise that this transition isn’t one that’s going to take place overnight. Toyota have guaranteed that they will maintain their production at their Altona plant until 2017.  We have the time to get this right and to step through it…

IAN MACFARLANE: Well let’s just work these issues through Fran.  I’m not going to snap an answer out of the air to an issue that’s been raised in the media today.  Again, we’ll go away and consider all those issues that we need to improve productivity and employment opportunities in Australia.  A massive task, we knew it was massive when we got into government, we knew the deficit was out of control - $48 billion this year, it’s not what the Labor Party was saying but we had an inkling that was going to be so.  Let’s get the issues under control and then put in place a long-term solution.

JOURNALIST: And Minister there’s, I think I’m right in saying, $1.38 billion in the car subsidy fund promised until 2015.  Are we going to keep spending that money on car companies that are about to exit Australia?  Are we going to keep subsidising Holden, Ford and Toyota right up until the last car rolls off the line?

IAN MACFARLANE: Well let’s see what the Productivity Commission review says and let’s see how the government responds to that.  We have a process, everyone knows the process, I announced the process days after I was sworn in – that we’d have a Productivity Commission report that would look at the status of the car industry and component industry. As I said on ABC last night, we will have to realign that to put a greater focus on the component industry.  Hopefully that won’t take much longer for the PC and they’ll still be able to report within that 31st of March timeframe.

But let’s do things in a proper way, let’s not go for a 24 hour news cycle or let’s not go for a bandaid that inevitably falls off. And as I say, you see a government throwing in $215 million and lose 650 jobs within six months.

JOURNALIST: Just finally Minister we’ve had a call from a woman, she’s the mother of a scientist who’s doing direct research at the CSIRO and he’s been told by human resources that he and his colleagues are on the redundancy list with other scientists.  Can you categorically say no CSIRO scientist doing direct research will be made redundant?

IAN MACFARLANE: Fran, that’s not what I said. What I said was essential research will continue and those people involved in that research will continue to be employed by the CSIRO.  But the CSIRO, their board and their management make those decisions as to what is a priority for Australian science in Australia, that’s the way it’s always been and the way it’ll continue to be.

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