Mr Steve Bracks, Chair, Inquiry into the Automotive Industry
(Transcript of Doorstop Interview, 1 Treasury Place, Melbourne)
MR BRACKS: Look, thank you very much for coming here. I appreciate it. And obviously I'm very privileged and pleased to be asked to chair a review into the automotive industry in this country. It's a vital industry.
This goes back to the - Senator John Button, of course, when he proposed a restructure of the passenger motor vehicle industry, the component parts industry, the design and research components of the car industry, and recommended that there be a rationalisation of some of the car companies going forward.
That has sustained us very well. And of course the recent moves by Mitsubishi have meant that this review is very, very important for the future.
It is a very competitive market worldwide. The Government - several governments, the Australian Government and Victorian Government and South Australian Government are putting in significant resources to supporting and assisting the car industry.
And the key issue for the committee which I chair will be to make recommendations to the Government on how that can be allocated wisely and effectively to sustain the industry long-term, for the demands in the industry, with consumer demand and higher petrol prices, with the requirements of a more sustainable car fleet in this country over time, with the need to export and look at research and development opportunities for export to occur.
It's a very, very important part of the Australian economy and I am privileged to undertake the task, realising it is obviously not an easy task but one which certainly I have a skilled committee to work with on.
QUESTION: Do you think the industry is ultimately sustainable?
MR BRACKS: Yes, I do. And I believe it has proved to be sustainable over a long period of time. If you look at the auto companies here in Australia, the passenger motor vehicle companies, Toyota are exporting the Toyota Camry to the Middle East. In fact, if you got to the Middle East, almost every taxi you get into is a Toyota Camry manufactured here in Australia. If you look at GM, the re-badged Statesman which is utilised as a luxury car around the world. Ford, with their moves into a four cylinder Ford Focus; is proof that there is a sustainable industry.
But of course there is also increased competition, increased competition from China, from other countries in our region. And it's important to make recommendations to the Government on getting the structure of the industry right so it can be competitive, competitive not only in the short term but also the long-term.
QUESTION: Do you go into this position with a clean slate given that, as Premier, your government was opposed to tariff cuts back in 2002, and also has been a financial backer of the car industry such as the Holden...
MR BRACKS: I'll take an objective view, as chair of the Inquiry into the Automotive Industry in this country, and a view which will be based on reliable and sensible information which we will receive from the department, from other key agencies, from the industry that we'll receive recommendations on.
And the overwhelming objective will be to have a sustainable passenger motor vehicle, components parts, and research and development industry in the auto industry in the future.
That is the overriding issue. Nothing else will be as important as looking at the sustainability of the industry.
QUESTION: Mr Bracks, how many car makers do you...
QUESTION: [Interrupts] [Indistinct] your previous stance [indistinct]...
MR BRACKS: I'll take - we'll take evidence and we'll take advice on what is most appropriate to sustain the industry long-term.
QUESTION: How many car makers do you think Victoria and the Australian economy can realistically support?
MR BRACKS: The original recommendation of the Button plan on the auto industry was that three passenger motor vehicle companies should be established. That was adjusted and changed, and four, of course, were established.
With the decision for Mitsubishi, we effectively have three major auto companies in this country. And we'll have to examine and report on what we believe is the appropriate structure going forward.
QUESTION: Mr Bracks, there's further discussion today about attempting to lure Toyota to Australia to produce the Prius. Do you think that could be a good way of keeping a sustainable industry going in Australia?
MR BRACKS: There's no doubt that environmental sustainability will be a feature of the automotive industry in the future.
The demand will be there for fuel efficient cars, for environmentally sustainable cars, and of course the new European standards are requiring that emissions standards be more rigorous than they have been.
So, clearly, any efforts to look at whether it's hybrids or diesels or other key environmental sustainable cars will be part of what the inquiry committee will consider.
QUESTION: Mr Bracks, the Federal Opposition has some qualms about you leading this review. Are you qualified enough to lead this review?
MR BRACKS: Well look, there's always politics when it comes to political parties and presenting in parliament. I'm not going to comment on that.
I've actually worked very well with the previous Industry Ministers, with Senator Nick Minchin, with Ian Macfarlane. We worked together, we worked cooperatively. And I'm sure the Opposition will want to make submissions to the inquiry and we'd welcome that enormously.
And I believe there will be people of goodwill who will want to see an effective and sustainable auto industry in this country, and I'm sure that will be the driver for this in the future. Excuse the pun.
QUESTION: Malcolm Turnbull says this is a job for the boys. Is that the case?
MR BRACKS: Well, I think the Government has made a selection on the panel of which I chair, on the basis of what is best for the advice that they will receive for the industry. And I believe we have the capacity to give that advice effectively and well.
QUESTION: How important are government fleet purchasing arrangements for the sustainability of the car industry?
MR BRACKS: Well, the government fleet is a major purchaser. And obviously most governments have a preferred Australian purchase arrangement. That is something that has been a tenet of Australian and State and Territory Governments over a long period of time. That will be part of the consideration as well; looking at the demand for domestic production and unit - and the volume of units to come out of the auto companies.
But equally as important will be the export industry. You know, volume is important, critical mass is important, and we know that to survive you can't just rely on the domestic market effectively. You have to look at expanding those markets, and that's what most of the companies have already undertaken.
QUESTION: Mr Bracks, what about imports though? Is that the tariffs? A lot in the car industry are saying that tariffs are the problem. What are your feelings on that?
MR BRACKS: Well, that's something we'll take evidence on. And obviously the tariff is scheduled to be reduced by 2010 from 10 per cent tariff to a 5 per cent tariff.
That will be examined and obviously we'll report to the Government on that matter.
It's only one facet in a wider competitive market. I have to say that it's probably not the most important factor in the industry currently. Worldwide competition, particularly from our near neighbours, is probably the most significant issue that we face in the future.
QUESTION: [Indistinct] change your view on tariffs then from 2002 to now?
MR BRACKS: Well, I am going to take independent advice on that matter.
QUESTION: Mr Bracks, you witnessed the demise of the last Nationals Liberals Coalition. What do you think of the new one?
MR BRACKS: I'm not going to comment on domestic political issues. That's really a matter for the current Government and the current Opposition.
QUESTION: Were you surprised to hear it was happening though?
MR BRACKS: Oh look, I - you know, I read the papers like everyone else. But it's not a matter I'll be commenting on.
QUESTION: [Indistinct] the Productivity Commission [indistinct] to take this review? Surely they're the most appropriate body to do this?
MR BRACKS: Well, it's a matter for the Government really. The Productivity Commission is a very effective, robust and - organisation which is... which we will consult with. Of course we'll consult with the Productivity Commission.
This is a wider review of the whole of the auto industry. Passenger motor vehicles, the assembly plants, the component parts industry, the research and development and design components of the industry, the fuel - the efficiency of the market long-term. So it's a wider review than simply a smaller review.
And I assume that the Government has sought to have wider advice on that basis.
QUESTION: Mr Bracks, the Federal Government has indicated that they will also [indistinct] Productivity Commission. So will this review look into tariffs and also possible subsidies for manufacturers, or will that be left to the Productivity Commission?
MR BRACKS: Well, it's a matter for the Government, really. And obviously I would, in chairing this committee, be seeking advice from the Productivity Commission on those matters which the terms of reference cover.
QUESTION: There's been a fairly high level of dissent over some of the water plans for the state - desalination plant, and also a pipeline; some of these are your babies from last year. Have you been surprised by the level of opposition to it?
MR BRACKS: I think it's a good try to get me to answer another question, but I won't be commenting on that matter.
QUESTION: There's been some comment about how much you're getting paid for your latest role. Is that wage justified?
MR BRACKS: Well, I don't know where those allegations came from but they are untrue, and the scheduled fee that everyone gets for the same role, which is gazetted, I think, is the fee. And it's a minuscule amount compared to the allegation that was made. I'm not sure where they got that allegation.
But look, politics is politics. You've got to get a story up somewhere I guess.
QUESTION: Any more room on your dance card? You've got KPMG, East Timor, Melbourne Uni...
MR BRACKS: I'm pretty busy and - but I'm finding the roles fulfilling, and obviously I'm very concerned about what's happening in Timor-Leste currently. I understand that the President's health has improved, and I'm very pleased about that, and I will continue in that voluntary role in the future in order to get better advice to the Prime Minister on governance arrangements. I'm looking forward to that very much.
QUESTION: You were there last week, weren't you...
MR BRACKS: Yes, I was.
QUESTION: Was there any inkling or any sign that this [indistinct]?
MR BRACKS: No, there wasn't. It was quite a surprise to me. It was quite a surprise to most people advising the Government of Timor-Leste that this attempted - assassination attempt on the Prime Minister and the President occurred. And it was not anticipated, not expected, and certainly it came as a shock, I think, to most of us.