19 August 2015

Address at the Australian Automotive National Summit


Check against delivery

Thanks Steve for that introduction, and thanks also to the Motor Trades Association of Australia for hosting this summit.

I welcome the fact that the MTAA has come together for an important discussion on the industry, and how to take advantage of the opportunities of the future.

A unified voice is a powerful voice. The MTAA has a bird's eye view of the industry. You understand what must be done, and you approach it with optimism — exactly what the automotive industry needs in the 21st century. 

The opportunity of change

The automotive industry is going through a period of revolutionary change.

It has come with all its force and all its challenges for this industry. But change also brings opportunities.

And, as a nation, we've been here before.

Fifty years ago, the assembly line was a second home for many Australians. In cities and towns right across the nation, workers would punch in for the day, armed with strong hands, a thumping work ethic and a desire to fix problems.

Day in, day out, they answered the calls of a heavily protected economy.

That was Australia then. But it couldn't be Australia forever.

Things have changed — in the workforce, for the consumer, and for industry.

Governments have a more limited role in the economy than 50, or even five, years ago. Increasingly, our job is to facilitate change — change being driven by more independent consumers.

Even if we wanted to, we cannot cling to the past. To do so would hobble the future.

Increasingly, thankfully, Australians are controlling their economic destiny.

Currency of innovation

Today, technology is an unstoppable tide because it empowers consumers and enterprise, more so than at any other point. 

We live in an age of global disruption. The way we see the world, the way we do business, is changing.

There are the examples we all know well, such as Uber or Airbnb. But there are countless others which will have an enormous impact.

Australia's future currency will be innovation as well as effort. Its value will rise and fall with our willingness to take ideas and make them hum.

This cannot be done by attempting to hold back the tide; by shying from reform; by delaying the inevitable through industry subsidies and regulation.

It will be done by encouraging, and creating, the right environment for the industry to transform and thrive.

Green shoots  

Innovation in the motor industry is driven by consumers expecting better performance, more technology and greater customisation.

What was unreal 20 years ago starts to look real.

For example, the development of driverless cars has gone ahead in giant leaps and bounds.

Mercedes Benz and Volvo have all hopped on tomorrow's wagon, and models are now being tested on roads in the United States.

Amazingly, some of the most aggressive product development is coming from companies like Google, which are not even traditional auto makers.

In November, the first Australian trial of driverless technology will take place on the Southern Expressway in Adelaide, with more to follow across the country.

In response, the South Australian Government has said it wants to update road laws to lead the facilitation of this new technology.

The benefits are widespread and across the economy.

Driverless cars mean freedom for our older Australians, who will be able to get from place to place with ease.

And they would help deliver greater safety, with nine out of every 10 accidents caused by human error, such as speeding.1

Of course, getting to the point of common usage will take work. And there are challenges, such as building the infrastructure that will integrate driverless and non-driverless cars safely.

It will take innovation, and it will take an open mind. But clearly, the tide is rising.

Another company leading in automotive technology is the US-based Tesla. And what is really interesting about that company is how their car innovations are leading to other, game-changing technologies.

Tesla launched their first electric car in 2008, and recently introduced Autopilot — which combines a forward-looking camera, radar and 360-degree sonar sensors with real-time traffic updates. 

Tesla Roadsters are now on the road in more than 30 countries. In fact, they even have a dealership in my electorate!

These technologies will help address the productivity challenge in our economy.

For example, Rio Tinto has been operating massive mining trucks in Northern Australia from an operations centre at Perth Airport. The trucks operate seamlessly 24 hours a day — and the savings have been enormous.

Logistics and transport without drivers may sound threatening for some, but the opportunity to reskill and upskill former drivers of trucks and cars will result in more jobs and better pay for workers in that field.

Preparing for the future

The challenge of change is not easy, and the transition in Geelong illustrates this.

It's been a city of manufacturing for a long time, powered by the car industry.

And in recent times it has diversified. It has diversified into industries that will provide more opportunities and employment.

These include healthcare, advance manufacturing, tourism and technology. Today it is a city of innovation, powered by not by one, but many sources.

The Prime Minister this month announced an Advanced Manufacturing Growth Centre in Geelong to help forge a stronger future.

That recognises Geelong, which houses 500 manufacturers employing 12,000 people, is innovating — building new industries and new jobs.

An example of this will be carbon fibre wheels. In July, "Carbon Revolution" was picked by Ford USA to supply these wheels to the new Shelby Mustang GT350R vehicle.

It was a vote of confidence in Geelong's — and Australia's — continued role in supplying the global auto market.

It was helped by the Geelong Region Innovation and Investment Fund. This funding contributed to a new, purpose-built manufacturing facility, as well as 108 new jobs.

And when Carbon Revolution is at full speed, it will pump out 50,000 wheels a year.2

This is a great story, one of innovation breathing new life into a much-loved industry. It also shows the importance of preparation; of government helping with the transformation process.

The Coalition will help and encourage workers and firms to seek out new opportunities — to plan for the future and diversify into new markets.

Already we've seen nine businesses receive investment grants, and these 'points of light' will no doubt grow brighter — and multiply — in coming months.

Free Trade Agreements

I'm confident this will happen, because there will be opportunities coming our way with Free Trade Agreements with China, Japan and Korea.

The FTAs represent a chance for us to find new markets and opportunities. And you can see this if you look at the facts.

Let me share some with you now:

The first thing I would say is that Asia is a huge economic opportunity that's right on our doorstep.

By acknowledging that borders and barriers are the domain of yesterday, we've accessed an immediate customer base of 1.5 billion people by signing new Free Trade Agreements.

Under our agreement with Korea, the 8 per cent tax on Australia's auto part exports was eliminated at the time of signing.

Under our agreement with China, the 10 per cent tax on car engines will become history within four years and tariffs of up to 25 per cent on other parts will also go in that time.

And under our agreement with Japan, duty-free access to the Japanese market for our auto parts will continue. Additionally, the elimination of tariffs on new motor vehicles coming here will lift our auto retailers and service networks.   

Those are the facts, and they speak of opportunity — the chance for industry to restructure and enter new global supply chains.

And the Government will continue to look for such opportunities, and how to capitalise on them.

It forces us to look at how Australia sits in the world — a world where barriers are being removed to help free up new consumer markets.

No to Fringe Benefits Tax

I should also say that as well as helping the industry prepare for the future, and bringing opportunities your way, the Government will also be fair-dinkum in its dealings.

There is no better example of this than when we went to the last election opposing Labor's $1.8 billion Fringe Benefits Tax on work vehicles. 

That tax would have just made it harder for people to have a company or salary-sacrificed vehicle, and we all knew it wouldn't raise any extra revenue.

And that's because they did the sums wrong! They didn't factor in the massive compensation to industry, charities and dealers.

It would have bled the industry, and hurt the economy.

And it was this Government that called them on it.

It was the right thing to do; a move by a Government that knows when to step in, and when to step back.

Closing remarks

The changes in our society, our economy and our nation can be clearly seen in the automotive industry.

We are shifting away from the Australia of yesterday because we must. That's the challenge of time; the price of technology.

It has happened before, and it will happen again.

The winners in this industry — and every other one — will be those who respect and learn from the past, but are not held back by it.

The innovators, the entrepreneurs, the small business heroes — all those who look to the future and take risks.

Those who can see opportunity, and chase it.

I believe Australia will be the home of new technology and innovation.

Forget Silicon Valley — the opportunity lies right here. Any one of our cities or regional centres could be a technological hub to rival the world's best. 

That is why the Government is working hard to create an Australia where ideas can prosper.

And this industry is on its way. This is an industry used to seeing technology evolve; there are few more capable of change.

As huge opportunities arrive, change can be difficult to manage.

So let's continue to work together so that every one of you, along with the entire Australian economy, can thrive.

Thank you.

1. How driverless cars will change our lives

2. GRIIF helps get Mustang wheels rolling at Carbon Revolution