IAN MACFARLANE: Today I am here with Frank Seeley to announce, with Susan Close, the opening of the $60 million Next Generation Manufacturing Investment Programme. This programme is to assist industry to make the transition to a more advanced manufacturing system, so we can have industries that have future growth potential over the long term and to allow them to provide the jobs we’ll need as the current manufacturing of automobiles here in South Australia comes to an end in 2017.

This programme will provide Government assistance of up to $5 million per applicant, to allow them to transition their business or establish new businesses and assist them with skills and training to provide the opportunity for manufacturing in Australia. The South Australian Government, the Victorian Government have combined with the Federal Government to provide a $155 million Growth Fund to ensure that this current challenge that industry is facing in Australia is not only overcome, but turned into an opportunity that will provide sustainable jobs over the long term. I will now ask Susan Close to say a few words.

SUSAN CLOSE: Thank you. The South Australian Government is very pleased to contribute to a fund that’s going to go to South Australian manufacturers. The fund has guaranteed $30 million to be spent in South Australia and we’re contributing $12 million of that. It means that companies who are manufacturing and not currently in the automotive area, are going to be able to grow, expand and employ more people and start exporting or increase their exports and therefore help the economy to respond to the challenges that we’re going to see with the closure of Holden.

IAN MACFARLANE: Thanks Susan. Any questions?

JOURNALIST: The $60 million wasn’t received warmly by the Premier by my recollection and I stand to be corrected. Has he canvassed with you getting substantially more from the Federal Government for this transition process?

IAN MACFARLANE: Well look I will put his comments into the context of the lead up to a state election. I think there is a long standing and constructive relationship between the Commonwealth and the South Australian Government. We realise that there are challenges to be met and this fund will be used to do that. It’s not the only Government assistance available. The Federal Government has a multi-billion dollar programme to assist industry in Australia. The Growth Centres that the Prime Minister and I announced earlier this the week, the Entrepreneurs’ Infrastructure Programme, the Industry Skills Fund, they’re all there to assist industry. So whilst this programme is specifically targeted only to South Australia and Victoria, there are other funds to assist.

JOURNALIST: There’s, I think, a move through Federal Parliament now to basically guillotine the $500 million of previous auto assistance. That’s $500 million compared to $155 million. That $500 million would presumably support workforces for the production of Holden and Toyota. Is that really going to be enough to absorb the job losses that are going in at the end the auto industry in Australia, that $155 million fund?

IAN MACFARLANE: Well the $155 million fund was put in place as a direct result of GM Holden and Toyota making a decision independent of what the Commonwealth was doing, to cease manufacturing in Australia. Can I say that as the Industry Minister under the Howard Government, we provided $4.3 billion to this industry. That money is still being spent and there will be further money available under the Automotive Transformation Scheme right up to the end of auto manufacturing in Australia.

The decision by the automotive manufacturers to cease production in Australia is the reason we’ve established this fund. It provides an opportunity for new industries, long term industries, to be established here, and whilst I was extremely disappointed by the decision of GM Holden, it didn’t actually come as a surprise. The industry had failed in terms of building a globally competitive motor vehicle and the consumers were voting with their feet in terms of their choices. Australia has made a decision as to where we go with industry policy and that policy is to ensure that we have innovative, internationally competitive industries and supplying global supply chains.

SUSAN CLOSE: We’d like to say that the South Australian Government has consistently made it clear that that we don’t think that there are sufficient funds being put into the response to the closure of Holden. This particular fund is a good fund and we’re happy to contribute and it will have a good impact in South Australia, but we don’t regard it as being sufficient, and I think that every time I’ve met with Minister Macfarlane, I’ve raised that. He’s well aware that we will be monitoring the impact and we will be asking for more if we regard it as being insufficient and not doing the job that it needs to do, in increasing our exports, increasing our employment and increasing the innovation that needs to happen in our economy.

JOURNALIST: What about industries themselves. I mean there are various vehicle manufacturing federations that [inaudible] have they drawn upon you to maybe chip in more than the $60 million?

IAN MACFARLANE: Well, the reality is that we will deal with what we’ve got in front of us and what we’ve got in front of us is an inevitable transition away from automotive manufacturing in South Australia to new industries. What we are seeing from industry is support for our policy of providing transitional assistance and setting up a number of policy initiatives including moving science and CSIRO to the centre of industry policy including the skills base of industry. Industry is supporting that policy. They understand that we need to move industry in Australia away from an industry of dependence to an industry of excellence. It was inevitable that this happened and we’re now in a situation where we need to confront that, and with the cooperation of the States we’ll overcome this challenge.

JOURNALIST: What is then the most that can be claimed in terms of an allocation in this fund. In the business that I would make transition, how much can I ask for, what’s the most?

IAN MACFARLANE: Well you can invest as much as you like but the maximum contribution that the Commonwealth and States will make through this fund is $5 million. Now there is $60 million available in the fund and we would certainly hope that that would create at least a quarter of billion dollars’ worth of investment by industry. When it is supplemented not only by other parts of the Growth Fund but also by existing Federal Government policies and programmes, we’re confident that we can make this transition.

JOURNALIST: Has any been distributed yet?

IAN MACFARLANE: Today is the opening of the fund and we will have a round and see what comes in terms of demand for that but initial indications are that there will be very strong demand both here in South Australia and in Victoria.

JOURNALIST: [Inaudible] future submarines, particularly here in South Australia [inaudible], what’s your opinion on that?

IAN MACFARLANE: Well look, can I say that I would expect nothing less from our Senators in South Australia than to promote the cause of South Australia and so I have no problem with anything they’ve said. I need to add that whatever decision the Commonwealth makes with regard to submarines – and our goal is to purchase the best submarines at the best possible price – but whatever decision we make, there will be more jobs in South Australia. The reality is we haven’t built a submarine in South Australia for almost fifteen years. The jobs in the submarine industry in South Australia currently centre on maintenance.

Now we haven’t decided on a final number, but we’ll be close to almost double the number of submarines we have now. Even if those submarines were partially built overseas, they will have to have the final fit out done in Australia. There will be equipment, some of it highly sophisticated requiring highly technical skills within trades in South Australia that needs to be fitted and can’t be fitted for security reasons anywhere else.

So whatever the decision, there will firstly be many more maintenance jobs in this submarine programme which will run out over the life of the submarines for more than thirty years, and secondly, there will be highly paid, highly skilled jobs in the completion of these submarines, wherever they are built.

JOURNALIST: [inaudible] are all the jobs are going to be in maintenance of these ten to twelve submarines?

IAN MACFARLANE: No, it’s not just in the maintenance, there will be jobs involved in the construction and final fit out of these submarines, so we need to make sure that we have the best possible submarine at the best possible price. This is a Defence decision, it is not a regional support decision, it is not an industry programme, it is a Defence decision. We will take the advice of Defence, but I can assure everyone in South Australia that regardless of what decision we make, there will be many, many more jobs in South Australia, jobs that currently don’t exist.

SUSAN CLOSE: I feel I do have to contribute to this as well. Clearly the position of the South Australian Government is the best possible outcome from the Defence decision and in supporting jobs is that that the ships, the submarines, are designed and built in South Australia and in Australia. You get far better impact for the economy [inaudible]. I believe that the Federal Government must take full account of the Defence issues, the technological issues, as well as the employment and national security issues when considering this project.

IAN MACFARLANE: Thanks guys.

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