Government in hole, must start digging

SMH: Government in hole, must start digging. February 10, 2014 – Mark Hawthorne

For Holden and Toyota the end of Australian car making – much like the beginning – came very differently.

The much-loved Holden badge was famously born of a federal government scheme to create ”Australia’s own car” in the wake of the Second World War, and was launched to much fanfare in 1948.

Holden’s demise was equally as public, with the Abbott government taunting the company to declare its hand in Federal Parliament just before Christmas.

Treasurer Joe Hockey railed that it was time for Holden to ”come clean” and be ”fair dinkum” with the Australian people over its future in the country. ”Either you’re here or you’re not,” Mr Hockey said. Holden announced it was packing up and heading home the next day.

When Toyota arrived in Australia in 1958 – just 10 years after that first all-Australian Holden – it was via the back door.

In 1958, the engineering firm Thiess imported a batch of Land Cruisers to use at another famous nation-building project, the Snowy Mountains Hydro-electric scheme, because everything else it was using broke down.

Within five years the ever-reliable if somewhat unfashionable Toyota had its own manufacturing facility in Melbourne, and would eventually conquer both Ford and Holden to become Australia’s best-selling car maker.

But when the end came, it was once again via the back door.

The first Victorian Premier Denis Napthine knew of the decision was when global president Akio Toyoda contacted him late on Monday. Industry Minister Ian MacFarlane was also given little notice and seemed sideswiped by the news. He admitted, in his late-afternoon door-stop, that his plan to try and save Toyota had been ”curtailed by the decision the company made today”.

The political fall-out of all three car makers quitting Australia will continue for months – in particular for Napthine and MacFarlane, who seem at odds with federal cabinet.

The economic implications for Victoria and South Australia will be much more dire, and will roll on for years.

The Napthine government was already reeling from decisions by Ford and Holden to close their factory doors, and the federal government decision not to provide $25 million of assistance to fruit processor SPC Ardmona.

Yesterday Dr Napthine was at pains to emphasise that ”Victoria has a diverse and robust economy which has created 50,000 jobs in the past three years”.

In the next three years, the manufacturing sector alone could shed that many jobs.

The big three car makers spend an estimated $2.25 billion a year with Victorian suppliers, and those companies employ 18,000 full-time workers. In less than three years, that entire parts industry could be gone.

Which leaves the Victorian government, facing the polls later this year, in dire straits.

To that end, the Napthine government has lobbied the Abbott government for a package of major infrastructure projects to create 35,000 jobs.

Over the summer, the Premier’s Office put together a 91-page report on the Victorian economy, which was handed to the Abbott government last month.

According to that report, which has been obtained by Fairfax Media, ”the Victorian Government has identified shovel-ready priorities including key grade separations, and suburban and regional arterial road upgrades”.

The top priority is the immediate funding of the second phase of east west link’s western connections, linking to the Port of Melbourne and the Western Ring Road. The second is the Metro Rail Capacity Project, and a compete overhaul of Victoria’s rail network.

In the wake of Toyota’s decision, it seems the the state government is in a hole, and the only way out is to start digging.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.