SENATOR THE HON PENNY WONG

MINISTER FOR FINANCE AND DEREGULATION

TRANSCRIPT

9 April 2013

FIVEAA MORNINGS WITH MATTHEW PANTELIS

TOPICS: ECONOMY, HOLDEN

E&OE - PROOF ONLY

PANTELIS: Minister, 400 jobs to go from Holden – is it time to get the money back? Can we do that under whatever agreement you and Premier Jay Weatherill had agreed a year or so ago?

WONG: Can I first say that this is a very disappointing decision. And it’s most disappointing and stressful for the many workers and their families who will be affected. I think we need to first recall how important it is that they are supported through this time, and the Federal Government will ensure that they are.

In terms of the assistance, I can talk to you about the Federal Government’s assistance, and the package that we negotiated which looks to leverage investment by the company. That is, we put money in, they put more money in.  We think that’s the best way to ensure a viable, ongoing car industry. 

PANTELIS: But, by doing that, presumably the jobs will be there, will be kept. The company, you would think, would want to grow as a result of that. Instead, it’s shrinking. Isn’t it time to get some back?

WONG: I think the reality is that the company is grappling with what many of our exporters and manufacturers are grappling with, which is a very high Australian dollar. That’s causing a lot of competitive pressure. That’s making business much more difficult for them.

Now, I’m not one who thinks that taking assistance away is the best – as the Opposition want to do – is the best way to handle a situation when they’re under a lot of pressure. The Federal Opposition’s position is that you take $1.5 billion out of the car industry and you give them a review. That’s not going to ensure employment security or a viable industry into the future. 

PANTELIS: Well, one of the things the Opposition’s been saying, Sophie Mirabella yesterday, is openness. We need to know what’s in the agreements. It’s not about the confidentiality, it’s about ensuring that taxpayers get value for their dollar, and that’s certainly a point that would resonate with anyone.

WONG: And the agreement that Minister Combet negotiated on behalf of the Federal Government looked particularly at promoting significant capital investment from Holden. Whilst obviously this is – the decision we’ve seen is – a commercial decision, ultimately, if you’re looking over the medium-term, what you need to have is investment from the company as well as investment from the Government. It’s a disappointing decision but one that’s as a result of the high dollar. 

PANTELIS: Are you prepared to make the agreements that were reached then – that were done then, the deals done then – open to public scrutiny?

WONG: I think Minister Combet has been very transparent about the arrangements.  And the head of Holden has made it really clear that they wouldn’t be able to continue doing business in Australia but for the investment from the Federal Government. Our view is that we need a strong manufacturing sector, not only in South Australia but nationally. That requires us to make sure we invest wisely both in this industry but, as importantly, in other manufacturing industries. 

PANTELIS: Can I just read you a line from Phillip King who’s written about this in The Australian today. He says: “The issues facing Holden are neither new nor unique to the car industry. It’s the industry’s response that’s the problem. All three local operations – Holden, Ford, Toyota – are owned overseas and they’re responding to their parent company’s problems, not necessarily issues that they’re facing here in Australia.”

WONG: Well, they’re certainly operating in a global market, and we as a nation – and South Australia as a state – we also operate in a global market. That sometimes benefits us greatly, as we can see by the very high prices Australia got for a lot of resources over many years. But it also means some challenges. And the challenges at the moment are because we are perceived as, and we are, economically strong.

We’re perceived as having a very strong economy, relatively strong, compared to other advanced economies. That’s reflected, as well as a range of other factors, in the high dollar, and that unfortunately is making life pretty tough for our manufacturers. 

PANTELIS: So $275 million of both federal and state money in the last handout – you’re saying basically ‘grin and bear it’?

WONG: No, I’m saying that we have to decide as a nation: are we going to ensure we have a manufacturing sector? And, if we are, what is the best way of supporting that and ensuring we have a manufacturing sector? We’re offering this investment. Mr Abbott is offering cuts and a review. 

PANTELIS: Well, either way, maybe that’s what’s necessary, if they’re just taking the money and cutting jobs anyway.

WONG: If cuts are the way to deal with … I think we must go back to what the head of Holden in Australia has said: that without Government investment they won’t continue doing business.

If Tony Abbott’s policy is really that he wants to simply leave the car industry to die, perhaps he can go out to Elizabeth and tell the workers that. 

PANTELIS: Alright, thanks for your time.

WONG: Good to be with you.

ENDS