PRIME MINISTER

18 December 2013

TRANSCRIPT OF THE PRIME MINISTER THE HON. TONY ABBOTT MP JOINT PRESS CONFERENCE WITH THE HON. IAN MACFARLANE MP, MINISTER FOR INDUSTRY, PARLIAMENT HOUSE, CANBERRA
Subjects: Holden; securing Australias manufacturing future; the Governments to the National Disability Insurance Scheme; Australia-Indonesia relations; Paid Parental Leave. E&OE. PRIME MINISTER: Thanks everyone for coming. I want to begin by saying that Australia is good at manufacturing. We have been a manufacturing country for decades and decades and decades, and I believe that manufacturing is a vital part of a strong economic future for our country. And yes, weve got the problem in the motor industry that were dealing with specifically today, but in sector after sector, Australian manufacturing is continuing to do well. A couple of illustrations that I want to make: you look at the boots that both myself my friend and colleague the Industry Minister are wearing- Australian made, in fact South Australian made and exported to many countries. Theres that factory in West Gosford that I visited as part of the anti-carbon tax campaign, which is making 10 per cent of the worlds aerosol springs. A little workshop in West Gosford that is sending its product right around the world, which is competing in a mass-market product with the workshops of Asia because they are smart, innovative and adaptive. I was at the Export Awards a couple of weeks back and weve got an Australian Company, Rode Microphones, making electronics here in this country and exporting to many, many countries because they are smart and adaptive. So, our manufacturing can do well and our challenge, as a government, is to try to get the conditions right for it to do even better in the future. Now obviously today, our first task is to respond specifically to the announcement last week by Holden that it was terminating manufacturing motor vehicles in this country in 2017. And this follows on the
1 www.pm.gov.au

announcement earlier in the year during the time of the former government, that Ford would be ceasing their manufacturing operations here in Australia from 2016. Today I can announce that the Commonwealth is putting together a $100 million fund to invest in potential employment generating projects in South Australia and in Victoria. We will be commissioning reviews of the strategic prospects of both of those states, led in each case by the Industry Minister, assisted by Members of Parliament and in particular, by the leading business figures of South Australia and Victoria. And we will spend on economically responsible projects that $100 million fund, in accordance with the advice of those business committees. But, I dont want us to focus just on South Australia and Victoria and I dont want us to focus just on the car industry, because I accept that manufacturing has been under pressure over the last few years. Its not just motor manufacturing and its not just those two southern states. The high dollar has obviously been a problem for manufacturers more generally. Some of the decisions of the former government, such as the carbon tax, have caused very significant problems for some manufacturing such as aluminum smelting and other sectors. I will chair a taskforce comprising the Treasurer, the Industry Minister and the Minister for Trade and Investment to develop a national industry investment and competitiveness agenda, which will make recommendations to the Cabinet by the end of June of next year. As well as the obvious things; getting the fundamentals right. Well be looking at new options to reduce the costs of energy, new options to encourage innovation, such as employee share schemes and commercialisation programmes, because it is important to give manufacturing new manufacturing, manufacturing for the future, not just for the past the best possible deal. But, its also important that we do it in a considered and comprehensive way, that we dont simply make knee-jerk, piecemeal decisions in response to the crisis of the moment. I want to make this fundamental point though; in the end, no government has ever subsidised its way to prosperity. Just as no government and no country has ever taxed its way to prosperity, no country has ever subsidised its way to prosperity. And, I want to be very candid with the Australian people. This Government will be very loath to consider requests for subsidies. We will be very loath to do for businesses in trouble, the sorts of things that they ought to be doing for themselves and the sorts of things which the private sector commercial arrangements should potentially at least be doing for them. Our fundamental task is to get the basics right. That means lower taxes, it means less regulation, it means higher productivity, it means an overall environment where youve got steady, reliable, competent and trustworthy government. We want a strong and stable environment for businesses all businesses to operate under, and thats what this Government is on about. We are on about getting the fundamentals right and everything that weve done since September, has been about getting the economic fundamentals right, a strong and prosperous economy for a safe and secure Australia. Im going to ask the Industry Minister to add these remarks and then obviously well take some questions. INDUSTRY MINISTER: Well thanks very much Prime Minister, and whilst the imperative is as a result of the announcement last week and of GMHs closure and also of the ongoing programme to close Ford. Much of what the taskforce
2 www.pm.gov.au

will do wouldve had to have been done anyway, and since Ive taken up the Industry portfolio, Ive been alarmed at the parlour state of industry in Australia, particularly as a result of constant changing of rules and regulations, of excessive red tape, of poor decisions of government who fail to pursue long-term, strategic outcomes and just look at quick fixes. And, if I look across the path of past Industry Ministers, I see money thrown into buckets which really has no long-term impact on the viability of companies. So, the opportunity is there; was always going to have to happen. We will have meetings with industry groups and companies through January. Well call for expressions of interest basically this afternoon and commence those meetings in mid-January and we will be seeking not only solutions for those communities affected by the Holden closure, but also for industry based communities across Australia, because as I say, whilst this issue is currently focused on Holden, there are issues in the Industry portfolio that extend across other States. QUESTION: Prime Minister, you seem to have marked a farewell to corporate welfare and yet your $100 million scheme which youve just announced seems to be based on picking winners. Isnt there an inconsistency in this approach? PRIME MINISTER: No Denis, what we will be doing in consultation with the relevant groups of senior business figures in South Australia and Victoria, is identifying opportunities where government can help with promoting the industries of the future. Now, it may be feasibility studies, it may be investment in research and development, over time it may involve significant new infrastructure spending, because youre absolutely right, we dont want to see corporate welfare. What we want to see is a country which has got the economic fundamentals right and governments job is to foster the muscles and the sinews and bones of our economy, if you like, so that the private sector can add the bulk. I mean that's essentially what we want to do. So if we get the research sector strong, if we have the infrastructure strong, if we have the right regulatory environment, if we try to ensure that our people, as far as is humanly possible display a have-a-go mindset, this, let's face it, has been characteristic of our country, it's been characteristic of our strengths as a nation over the years and we want to bring this same have-a-go mindset to the manufacturing sector. We'll go around the circle, Sid? QUESTION: Prime Minister, if I was a manufacturer and I was trying to start something in China, for example, I'd probably get free land, I'd probably get labour incentives, I might get payroll tax holidays. Now, has Australian Government been entrepreneurial enough in attracting investment and is this something that the federal government and the state governments perhaps should look at in terms of attracting new industries and new investment? PRIME MINISTER: Well that's a fair point you make, Sid. We don't believe in corporate welfare, but we do believe in trying to give people and entities a fair start in life. There's a difference between a fair start in life and a life on welfare so to speak and that's why this Prime Ministerial taskforce, to look at the industry investment and competitiveness agenda, can explore some of those initiatives. Now I'm not pre-empting the work of that taskforce and I know there are arguments for and against, but nevertheless, we want to be pragmatic about these things, we want to be empirical about these things. What
3 www.pm.gov.au

we're not going to do though is throw good money after bad, because we've done that at different times in our past and I don't want to be doing that in the future. James? QUESTION: Prime Minister, during the election you announced $100 million when you released your manufacturing policy. I'm wondering that was to assist in export grants and also manufacturing transition is this money drawn, I mean is this essentially the same money? PRIME MINISTER: No. This is new money. It's $60 million in new money which the Commonwealth will provide. We have a commitment for $12 million from the Victorian government. We're talking to the South Australian government for a commitment, more or less in the same order of sorry, we're talking to the South Australian government for a commitment in the same order as Victoria's and we'd hope to get $20 million perhaps from Holden. QUESTION: Just a second question. Is the Government going to save money overall with this package because Holden has to hand back the $215 million it has committed? PRIME MINISTER: Well, I'll leave it to the Industry Minister to deal with the precise amounts that at different times have been committed to Holden. I suspect that what if anything might come back is something that's still being looked at and I suspect that there will be at least some monies that will have to continue going to Holden while they continue to manufacture, as I suspect there are some monies that will have to continue to go to Ford while manufacturing is continuing. So I'll leave that kind of detail to Minister Macfarlane, but what we are on about is trying to ensure that the workers of this country transition from good jobs to better jobs, from the industries of the past to the industries of the future. That's what we're on about and we think government does have a role. The role is not to prop up private business, the role is to help us as a country and as communities explore where our future might best be determined and to add to the general infrastructure - physical and intellectual - through investing in things like roads and where necessary railways, and in education and in research and development. QUESTION: Can I just clarify what you're saying there is it that none of the hundred million dollars will go in a grant to an individual company? Have you made a decision on the request from SPC Ardmona? And you said that the taskforce would look at ways to further reduce energy costs. Are you hoping that that will be an outcome of your review of the renewable energy target? PRIME MINISTER: I'm not saying that none of this money will be available to businesses, but they will have to make a very strong case and they will have to be able to demonstrate why it is that our money should be provided in this way because there is no prospect of them getting money from the normal private sector sources to fund something. So I'm not ruling it out. We may well make some modest investments from this fund in that way, but it will have to be a very strong case and it will have to be a case which is ticked off by sensible private business people. It's not we're not here about we're not here to sort of build a field of dreams. We are here to make sensible economically responsible decisions.
4 www.pm.gov.au

We are here to exercise very careful stewardship over taxpayers' money. Now on the SPC Ardmona issue, Ian, Minister Macfarlane, has been in discussions with SPC Ardmona. Those discussions are ongoing, but I'd make the same point in respect of SPC Ardmona that I've made in respect of Qantas you've got to get your house in order. You've got to get your house in order. Government support cannot substitute for strong management and strong management in a company under pressure starts with getting your costs down and if you've got a problem in any particular area, you have got to tackle it and you've got to tackle it purposefully and you've got to be prepared to take responsibility for what you do rather than simply say it's all too hard, government's got to fix the problem. Sabra? QUESTION: And the RET? PRIME MINISTER: And the RET, well look again, we support sensible use of renewable energy and as you know it was the former Howard Government which initially gave us the RET and at the time it was important because we made very little if any use of renewable energy. We've got to accept though, that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an energy superpower. I mean, this country ought to be an affordable energy superpower. We don't have a large domestic market, we don't have closeness geographical closeness - to other major markets, well, not many other major market. Lets make the most of the comparative advantages we've got and cheap energy - affordable energy - ought to be one of our comparable advantages and almost everything that's happened over the last few years, starting with the carbon tax, has conspired to put our power prices through the roof and what we'll be looking at as part of this taskforce that I will chair is what we need to do to get power prices down and down significantly. Do you want to add to that, Ian? INDUSTRY MINISTER: Well, I mean in terms of the RET review; we're facing an enormous challenge in terms of an excess generating capacity in electricity in Australia. To be adding large quantities of generation into that situation has to be questioned. The review process will go through those things but as the Prime Minister says, in terms of the cost of energy, the fact that a coal-fired power station is dispatching electricity at a lower price now than it was five years ago and yet businesses are facing electricity prices that are more than double, is an issue that has to be addressed. Every manufacturing industry uses electricity. It is a significant portion of their costs and it needs to be looked at and it will be looked at both through this taskforce but also through the RET review. PRIME MINISTER: Sabra? QUESTION: Prime Minister, you said that you would like Holden to contribute $20 billion to this fund. Have you spoken to Holden about that? What commitment have they given you? And based on the Mitsubishi experience in
5 www.pm.gov.au

South Australia, do you concede that once Holden goes that there will be some workers who will be unable to find work again? PRIME MINISTER: Let me deal with the latter part of the question and Minister Macfarlane will deal who with the former part of it. Look, I accept that, particularly for older workers who spent a lifetime in a particular industry, it's very difficult to move and to adapt when the business for which you have worked for many years fundamentally changes. I accept that. But I wouldn't want anyone to be defeatist about the capacity of Australian workers to be creative in their own best interests. Now, some of the Mitsubishi workers have struggled to find work, others have had, I suppose, almost a rebirth of their working lives and I dare say, it will be same for the people currently at Ford and Holden when manufacturing stops. Some of them will find it difficult, but many of them will probably be liberated to pursue new opportunities and to get on with their lives and the point I've always made is that as far as I am concerned, government has a heavy responsibility to every single citizen. As far as I'm concerned this Government is not in the business of leaving people behind. But we have to accept that what was right for people 10 years ago or 20 years ago is not necessarily going to be right or possible for them far into the future, and we do have to be prepared to adapt individually and collectively we do have to be prepared to adapt. Australians have been very good at it and I'm confident that the majority of these workers will be able to adapt although I don't for a second underestimate that for many of them there will be some difficult times too. QUESTION: Prime Minister, on the Budget outlook PRIME MINISTER: I'm sorry, Ian, you were going to talk about Holden? INDUSTRY MINISTER: Thats right. In terms of Holden, we've had some initial discussions with Holden and they are receptive to contributing to the fund. We'll get down to the detail with them but the company understands its responsibilities in terms of the workers and bearing in mind that the company is planning to continue to operate until 2017, it's a process that we can manage. In terms of the workers, I can only endorse the Prime Minister's comments. Many of us and me personally, have had to go through a significant change both not only in career but in my case, in where I lived. That is a very, very challenging thing to do but Australians in the past have always been prepared to do it and I think we need to accept that well have to do it again to move out of a community, to go somewhere where there is work and long-term sustainable work, or to up-skill and certainly portfolio will be assisting in improving their skills. Many of the workers at this Plant have a fundamental intelligence in terms of skills that they should exploit and there will be a real opportunity for them to do that. PRIME MINISTER: Michelle?
6 www.pm.gov.au

QUESTION: Mr Abbott, you said you were not into corporate welfare. Do you think the corporate welfare we already have has gone far too far and should be cut back? PRIME MINISTER: Well, what we have, we have and other than as announced, Michelle, we're not making any changes but I do make- again - the fundamental points that no country has ever taxed its way to prosperity, no way to country has ever subsidised its way to prosperity. It is profitable, private businesses which are the engine of the prosperity that all of us enjoy. It doesn't matter where you are working, who are you working for, whether you're self-employed or employed, in the end it is profitable private businesses, large and small, which are the absolute foundation, the essential prerequisite for the prosperity of this nation and all others and thats what we need to promote. QUESTION: You're saying it's safe from cuts? PRIME MINISTER: Now, the point that both the Treasurer and the Finance Minister were making repeatedly yesterday is that we will not act in ways which are inconsistent with our mandate. We will not act in ways which are inconsistent with our mandate, but we're not going to play this game of rule this in, rule that out. We will not act in ways which are inconsistent with our mandate and when it comes to the fiscal position, we have inherited a mess. We have inherited Labor's mess. We take responsibility for fixing it and fix it we must for the future of Australia to be secure. David. QUESTION: Are you still committed to the full funding model of the National Disability Insurance Scheme, including the money that was earmarked beyond the forward estimates? PRIME MINISTER: Well, we are absolutely - let me give you a bit of background, David. We have supported the National Disability Insurance Scheme at every step of the way, every step of the way, because we fervently believe, I fervently believe, that the National Disability Insurance Scheme is an idea whose time has come. I fervently believe and accept that the test of the decency of a society is how it addresses the problems of its most disadvantaged and vulnerable. Now, that doesnt mean that everything you do in this area is equally sensible, or everything that you might do is equally sensible, but I am absolutely committed to the National Disability Insurance Scheme. When a Productivity Commission study was proposed we supported it, when the Productivity Commission reported, we supported that, when the former government introduced legislation into the Parliament we supported that, when the former government proposed a levy to part-fund the scheme we supported that. So, we absolutely support the National Disability Insurance Scheme. What I have to say to you though is that, we do not have a scheme in place at this point in time; we have a number of trials which have started, a number of trials which have started and we absolutely support those trials. But, it is important to carefully study those trials and to learn the right lessons from those trials so that the final shape of the National
7 www.pm.gov.au

Disability Insurance Scheme gives people with disabilities the support they need; the generous additional support they need, but does it in a sustainable way. QUESTION: Can you explain for us your involvement in helping secure the release from Dubai of Matt Joyce? PRIME MINISTER: Im very pleased that that matter has been satisfactorily resolved thats the first point to make. Second point to make is that from time to time its appropriate from Prime Ministers to discuss consular matters with other Heads of Government, but it doesnt normally help the situation to talk publicly about them. So I think the best I can say at this point is that Im very pleased the matter has finally been resolved. Im obviously happy for the individual and for his family and I want Australias relationship with the Emirates and with the Gulf generally to go from strength the strength. QUESTION: On the National Disability Insurance Scheme, you said you want to learn from the trials to see what final shape it would take. Given that you are looking at making it a cost effective scheme, should people with disabilities perhaps reassess whether or not they think they might be included in the NDIS? Would you look at perhaps limiting the definition of who might be eligible to be part of the NDIS? PRIME MINISTER: You know the easiest thing in the world is to scare people and I think its a little disappointing that some people in this Parliament have been running around the place today trying to scare vulnerable people. We will deliver the National Disability Insurance Scheme. We believe that the Productivity Commission has given us a good model on which to proceed. But one of the reasons why the Productivity Commission wanted to see a series of trials done in different place around the country was because they wanted us to learn as we went and make sure that we get this right. Its so important for people with disabilities and their carers and for the rest of us, that we get this right. That we should not rush to swift conclusions at the very beginning of this process and thats where were at, were at the very beginning of this process, but we will have a National Disability Insurance Scheme, and it will be fair and it will be generous and it will be appropriately targeted and it will be sustainable. QUESTION: The Governments message is that the entire community has to be involved in the budget repair job, now I wonder whether you might be inclined to set an example because even though the PPL scheme is very close to your heart all options have to be on the table. Would you be at all open to trimming it back a bit? PRIME MINISTER: Well obviously it has to get through the Parliament and that may well involve some negotiation, but I am committed to the scheme that we took to the election and I believe thats a fair scheme and I dont think were in an either or situation a good deal for people with disabilities versus a good deal for new parents. I dont believe were in that situation. I think that if we get the economic fundamentals right, if we do the design work right, we can have an excellent National Disability Insurance Scheme, and at last and overdue a fair dinkum Paid Parental Leave scheme.
8 www.pm.gov.au

Two further points about - well really three - further points about paid parental leave - first of all, its a productivity enhancing measure, a participation enchaining measure. Second, its fully funded, mostly by a modest levy on the taxable incomes of larger companies. And third, it is also a fairness issue, because at the moment if youre a Commonwealth public servant you get 14 weeks at your full salary, even if your full salary is $300,000 or $400,000 a year. If youre working for the ABC, as I sometimes tease ABC journalists, you get your full-salary for 14 weeks regardless of how high your salary is and if youre a shop assistant or a factory worker you get next to nothing. And so, because its fair, because its funded, and because its about a stronger economy I think that it should proceed and I hope it will have a smooth passage through the Parliament later in the year. Michael? QUESTION: I just wanted to get your reaction, Prime Minister, on the High Court overruling the NSW ban on Unions being able to make political donations? PRIME MINISTER: Well this sounds like its a new decision, is this a decision that came down today? QUESTION: Yeah, it was taken today that the High Court has overruled the NSW Governments ban over Unions being able to make political donations. PRIME MINISTER: Look, Im afraid this is the first Ive heard of that particular decision and Id rather not comment until Ive had a chance to study it. Because your question has in a sense been ruled out of order, Ill take another one. Is there another question? QUESTION: [inaudible] Australia and Indonesias discussions that are going on about this code of conduct when it comes to intelligence matters. Can you give us an update of where that is at and when we might see that finalised? PRIME MINISTER: Ok, well as you know Foreign Minister Bishop and Foreign Minister Natalegawa, assisted by various other senior officials, had a good discussion last week and there is a protocol - a draft protocol - which is currently under discussion between our two countries. I am confident that we can use the difficulties of the last few weeks to bring our relationship, particularly our security and intelligence relationship, to a higher level. The point I constantly make is that we respect Indonesias sovereignty, we expect reciprocity there. I have enormous affection and adoration for President Yudhoyono who has been a great President of Indonesia, as well as being a firm friend of Australia. We are co-operating fully with Indonesia on the things that are important to them and Im certainly looking forward to a swift and full resumption of cooperation from Indonesia on the things that are important to us. Thank you. [ends]
9 www.pm.gov.au