The Politics    Monday, February 17, 2020

Australian carnage

By Paddy Manning

Australian carnage
The Coalition killed Holden six years ago

It is understandable but pointless to mourn the last gasp of Holden in Australia, announced by General Motors this afternoon. Although Federal Industry Minister Karen Andrews is clearly ropeable at the lack of notice to the government, the decision has been a long time coming. The death knell sounded in December 2013, when then treasurer Joe Hockey goaded the company into staying or going, rather than stump up more millions in subsidies to the flailing American giant. GM announced the next day that it would stop making cars here, marking the end of a proud automotive history with the loss of thousands of direct and indirect manufacturing jobs. Toyota followed suit and a whole industry tanked.

Though it goes against the grain to subsidise American (or Japanese) multinationals, there were good grounds for continuing short-term support for Holden in 2013: the local product was said to be globally competitive at a US exchange rate below $0.80; at the time the Australian dollar was above parity compared to the US dollar, but, as we now know, this was only temporary. When the car industry needed extra support, the government refused to provide it. The Holden manufacturing closure cost taxpayers more than the subsidy would have, in terms of foregone tax revenue and transitional assistance or welfare for affected workers. All things considered it was a short-sighted decision that suited Hockey’s selective end-of-entitlement rhetoric – private schools and self-funded retirees exempt – but dented our national pride and wrote off an irreplaceable industry capability.

Neither Joe Hockey nor then prime minister Tony Abbott has ever owned up to that decision, but it undoubtedly took a bit of gloss off the brand-new Coalition government, which had a very short honeymoon. Former members of that cabinet have recalled the mood of voters had already shifted by the time they returned home to their electorates for Christmas, and the first Abbott–Hockey budget confirmed a deeply unpopular government. Some also believe GM had already decided to quit Australian car making, regardless of Hockey’s parliamentary tub-thumping. And perhaps local car manufacturing, which is sub-scale by international standards, faced a limited future anyway. Even if Hockey had decided to cough up, the end result may have been the same. But it would have been nice to know the federal government went out fighting for Australian jobs.

The non-profit Victorian Centre for Advanced Materials Manufacturing said [$] in 2013 that the engineering centres of Holden and Ford were by far “the most significant local breeding ground for the critically important skills required for new globally competitive innovative manufacturing businesses required to sustain our sophisticated industry network … There are virtually no other complete supply chains in Australia with this scale of capability.” Instead, we got Australian carnage courtesy of a short-term, cigar-puffing treasurer who thought poor people don’t drive, and soon skipped off overseas.

Today GM executives said it made no sense to compete with 70 other vehicle manufacturers in two tiny right-hand-drive markets, Australia and New Zealand, which comprise 1 per cent of global car sales. Estimates of the job losses from their decision to retire the Holden brand range from 500 to 800. It was left to Andrews to complain that the outcome was “very disappointing” and “unacceptable” given the ongoing automotive transformation support provided by the federal government. Holden was near and dear to many Australian hearts, she said, adding that “my first car was a Holden Torana that I bought from my grandfather”. Andrews said the vast majority of former car industry employees had been able to secure new employment, and cast it as the company’s decision: “Holden is walking away from Australia,” she said. The death of Holden is a national tragedy, but it happened six years ago.

Contrast the Coalition’s willingness to walk away from the car industry with its bloody-minded determination to stop far fewer job losses in the coal industry – but only those job losses, mind, that might be caused by a transition to clean energy. If a multinational coal company wants to automate miners’ jobs out of existence, you won’t hear a peep out of the government, and ditto if a commodity price slump or industrial action leads to layoffs.

And contrast the untold extra billions the Turnbull government was willing to give to a French submarine company to generate a few thousand manufacturing jobs in Adelaide and save a few Coalition seats, in an $80 billion disaster cooked up by former defence industry minister Christopher Pyne. The number of submarine-making jobs created appears to be rapidly diminishing as we speak, as what was thought to be a watertight local manufacturing content requirement turns out to be very leaky indeed.

The Abbott–Turnbull–Morrison governments have had no vision and no plan apart from where their own short-term political interests have been concerned. Now even they are in jeopardy, after a succession of economic hits from drought to bushfire to coronavirus to Holden.

Listen to The Politics Podcast, with Rachel Withers


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Paddy Manning

Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.

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