Ministers for the Department of Industry and Science
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Press conference, Altona North Toyota Plant, Melbourne

9 October 2013
Subject: 
Visit to Toyota Australia's Altona North plant.
E&OE

IAN MACFARLANE: All right, well, we're visiting Toyota this morning, and it was great to see the improvements that have been made here in the last seven years, since I last visited.

This operation and the people who manage it are acutely aware of the international competition that Toyota faces, not only from other brands, but in fact from other Toyota plants, particularly ones in America. And they are keen to make sure that they are competitive, and they want to be competitive for a long time. They export about 63,000 vehicles a year, so around 60-65 per cent of their production. And they are acutely aware that in doing that they need to be competitive with the best Toyota plants in the world.

And I applaud them for that. I know that there's not much money at the moment in exporting, and with the dollar where it is, it's very difficult for them to compete, but they are doing everything they can.

The second thing I want to say is that it's great to see a company that is so enthusiastic about staying in Australia, and making cars in Australia. Toyotas are great cars, I've had a few of them in my time, I plan to have a few of them in the future. Just like I plan to have Holdens and any other car people choose to make here in Australia.

So at the moment we're trying to put together a process where we can assess, through the Productivity Commission initially, whether or not we can make the car industry viable. I'm asking them to produce an interim - some interim findings by Christmas so that I can make some assessments, along with Joe Hockey and Cabinet, about where we go from there.

There are issues, under the - what was the Howard car plan released in 2003, and starting at the beginning of 2006, expiring at the end of 2015, that need to be dealt with. They're obviously long-term issues in terms of making sure that we in Australia make cars not only for the rest of this decade, but for the decades to come.

So, as I said in Adelaide, I am committed to the car industry. More importantly, I am committed to those people who work out the back behind me in the sheds, and in the sheds in Adelaide, and in the sheds in Broadmeadows, whose livelihoods, and their mortgages and their school fees and all the things they have to pay to keep their households going, depend on Australia making vehicles here.

So that is my goal. I'm going to be working very hard, along with my colleagues Joe Hockey and the Prime Minister and the other Cabinet ministers along with the Parliament. That's why I had Tim Watts here today, the new member for Gellibrand. Tim is actually a Toowoomba boy, so he's a good guy to start with, and his dad runs an engineering business up there, and belongs to the same golf club as I do. So he probably plays golf a lot more than I do, but Tim's a good guy, and he's committed to making sure that we have a bipartisan approach to solving the problems of this industry.

We don't know what that outcome will be, we know that the PC will produce a response probably six months or so from now, and then Cabinet will make a response to the PC, and then that report will be released.

I'll take some questions.

QUESTION: [Indistinct] likelihood you can convince Ford to keep its manufacturing in Australia?

IAN MACFARLANE: Well I haven't had that discussion with Ford, and I'd prefer to have those discussions face to face, rather than through the media. But they know I'm coming over there, they know I don't say anything's impossible. My goal is to keep the design and R&D plant here in Australia, if the plant does shut, as they plan, in 2016.

I'm very keen to see us make vehicle here, but if we can't make vehicles here, and Ford apparently have made that decision, then I want to make sure the really smart end of that - the design, the R&D, the stuff that goes into cars these days, is staying here in Australia, and staying for a long time.

QUESTION: The door is open though…

IAN MACFARLANE: Look, I'm prepared to look at anything. I mean I've been a farmer, I'm naturally optimistic, I believe in doing what you can whenever you can do it. I believe in having a go, and never die wondering, so that's very much my modus operandi. Yes?

QUESTION: Will you have to change the funding…?

IAN MACFARLANE: I'll come back to you.

QUESTION: Will you be sticking with the $500 million cut that was flagged during the election campaign?

IAN MACFARLANE: Well that's our election commitment, and that's the decision of Cabinet to remain with that. One of the challenges I face is making sure that the industry remains operating between now and when we can hand down a final decision, probably towards the middle and maybe the third quarter of next year.

We know it's important that we get something done quickly, but it's going to be based on fact. It's obviously going to have the cornerstone of the Productivity Commission. But if I have to use money that's already within the ATS to keep the industry going between now and then, bearing in mind that those cuts start basically now, then I will ask Cabinet for permission to do that.

But the goal is to keep the industry confident that we are working towards a solution in 2014, perhaps by the middle of the year.

QUESTION: Has Holden actually asked for any more money?

IAN MACFARLANE: I don't disclose anything about private discussions. I noticed a few things are leaking, some of them are true and some of them aren't. I have spoken to a few people in the last 24 hours to tell them if that leaking doesn't stop then I will stop and I'll go and do something else in my portfolio.

QUESTION: [Indistinct] the value of the Australian dollar has had a bigger negative effect on the local producers than the removal of tariffs, Minister. Will you be asking the Productivity Commission to take the currency into account when it formulates its recommendations?

IAN MACFARLANE: Well, I'll be asking them to take everything into account. You know, economists were put here to make weather forecasters look good. I'll be asking them to give me some indication of what their economists think the dollar is going to be worth in five years’ time. In the end, as we know from the GFC, the best economists in the world failed to predict the GFC and the best economists in the world said the dollar would never get to parity. So I guess we've got to take that advice along with some instinct and some of the issues that we're facing.

I mean, if the car industry in Australia shuts down, that's 40,000 jobs. That's about a third of the population of Toowoomba losing their job, not just here in the Toyota plant, not just in the Holden plant, not just in all the component plants around Melbourne and Victoria and South Australia. If these plants close, those repercussions will be felt right across, particularly eastern Australia, but right across Australia.

QUESTION: Has Toyota asked for…

QUESTION: [Indistinct] $500 million figure as well as other pre-election commitments, did the former Shadow Minister go too far in committing to reductions?

IAN MACFARLANE: Well, look, I said I was a farmer. I always look forward. I've put a few bad seasons behind me in my time and I've put a few good seasons behind in my time.

Look, I'm only looking forward - in terms of what Sophie Mirabella did, that's the past. We're concentrating on the future. We want to see Australia have an internationally competitive car industry. We want to see Australia exporting cars all over the world that people want to buy all over the world. I want to see Australia at the forefront of the car industry.

QUESTION: But the stance has shifted since the election. What sparked that, I suppose?

IAN MACFARLANE: Look, if you're asking me what I think of the car industry, I am an enthusiast. I love things that get bolted together. I like pulling them apart and putting them back together. I have done that most of my life. I've been a farmer longer than I've been a politician. I've still got all my tools from the farm and the shed. Unfortunately not my welder because it runs on dual phase, but everything else I've still got there, and if you wanted me to I could probably pick up a stick welder and run you a good bead.

Look, in the end, I'm just enthusiastic about the car industry and the people who work for it. I'm trying not to let them down. I'll do everything I can, but in the end it's a decision of the government.

QUESTION: Has Toyota asked for money today?

IAN MACFARLANE: I don't disclose what anyone talks to me about in private meetings.

QUESTION: How important is the car industry to the manufacturing base in Australia?

IAN MACFARLANE: Well, the car industry is critically important. People think it's just metal and wheels. Some of the most sophisticated electronic technology in the world goes into motor vehicles and systems get more and more sophisticated and more and more complicated every year, and we benefit from that in safer cars.

So you've got the electronics, you've got high technology, you've got new technology even in relation to the steel, you've got fashion, you've got design, you've got innovation or invention, as I call it, you've got technology development, you've got all of those things happening in the motor vehicle industry and if it's going to be internationally competitive, I'm going to have to use the whole of my portfolio right across the portfolio.

So right from the science, right from the issues in relation to research and development, technology development, right through to apprenticeships, CSIRO. It is the full gambit so I think the one thing I've got on my side is that I have a portfolio that can do everything we can in Australia to make sure this industry survives and prospers.

QUESTION: Are you confident you'll be able to get the entire 500 million back from [indistinct]…?

IAN MACFARLANE: I'm not talking about dollars today. I'm talking about what we want to do, what we have to do in terms of getting the facts together, getting the issues together, that we've got a bipartisan approach, as I say, that's why Tim Watts was here today, that's why I asked Labor and Liberal and local mayors to come to the meeting at GMH. I want to get together all the facts before I start talking about numbers.

One last question.

QUESTION: Is it unrealistic, though, to say Holden has to double - increase its exports to 30 per cent? That's a very big ask.

IAN MACFARLANE: Well, I don't know what's unrealistic and what's not, but what I do know is that we're - if we aren't exporting cars, then we aren't under the same sort of pressures that Toyota is under when they see the cars coming out of Kentucky or coming out of Nagoya or when they see the Camrys coming out of Thailand, and they're trying to export into that same market. I know that that means for Toyota that they go over to that shed over there and they work out how they could save $1.50 a car.

Now, $1.50 a car in a $30,000 vehicle sounds like nothing. They make 100,000 vehicles a year. Last time I looked, $150,000 was a lot of money.

QUESTION: The Productivity Commission terms of reference, do we know when they might be being released?

IAN MACFARLANE: They'll be out in the next couple of weeks.

Thank you.

Media contacts: Mr Macfarlane's office 02 6277 7070