Senator the Hon Mathias Cormann

KIERAN GILBERT: Good morning and welcome to the program. Today marks the end of a manufacturing era in this country. The last vehicle to roll off the production line at Holden’s Elizabeth plant in the northern suburbs of Adelaide. With me to look at this issue and the other matters of the day, I am joined live by the Finance Minister Mathias Cormann. The first question is, Minister, could the Government have done more to keep car manufacturing alive in this country.

MATHIAS CORMANN: This has been coming for a while. Today is a sad day for Holden and its workers. The Government has been working with Holden and its workers to help transition the workforce into new employment. As I am advised, about 75 per cent of the Holden manufacturing workforce has already transitioned into new employment or decided to retire. As far as the remaining workforce is concerned we will continue to work to help transition them into new work. In the end, we are a globally focused, outward looking, open market economy. We have got to focus on those areas in which we can be internationally competitive. If we look across the economy, the economy continues to grow and employment growth across the economy is strong. Our unemployment rate at 5.5 per cent is comparatively low. We just have to continue to ensure that our economy overall is on the strongest possible foundation and trajectory for the future. But as far as workers at Holden and in other manufacturing sectors that are impacted by the transition in our economy are concerned, we have to continue to work to ensure that those workers have the best possible opportunity to be successful in the future. 

KIERAN GILBERT: You look at car manufacturing in that city of Adelaide, but then you have got the defence component, which there is huge government spending in that. So how do you differentiate between spending in one manufacturing sector like cars, to defence. How do you justify the billions, the hundreds of billions going into that in Adelaide?

MATHIAS CORMANN: There is a national security imperative. There is a national defence imperative. We clearly have a very significant defence capability build up requirement. That is why we are investing in our naval shipbuilding industry in order to help support our national security and defence requirements. Given the level of investment that is required, it is entirely appropriate for that investment to also be directed at developing the relevant industry in Australia. There is a sovereign interest component here.

KIERAN GILBERT: But there is an argument that we could buy that capacity off the shelf. You talk about defence and national security interests, but we could buy a lot of this stuff off the shelf for a lot cheaper and have some would argue a better capacity.

MATHIAS CORMANN: I do not accept that. Some will argue that. We are very focused on getting the best possible deal for Australia in terms of securing what we need from a defence capability point of view, as well as making sure that we have the required and appropriate skills in Australia to ensure that we can look after our own needs in relation to all of these important matters if and as required. 

KIERAN GILBERT: Now in terms of the impact on broader manufacturing, the supply chain, Labor says more should have been done, not just to protect the workers jobs in Holden, but whole supply chain and the whole impact on innovation in South Australia and more broadly. What is your argument in defence of that? 

MATHIAS CORMANN: The Labor party is rewriting history. They are being entirely disingenuous here. The car manufacturing industry started leaving Australia under Labor’s watch, under the period of the Rudd and Gillard governments. They do not want to talk about that today. But Ford, for example, announced that they would leave when Labor was in government. As did Mitsubishi from memory. The truth is, this is a part of the economy, which sadly was no longer appropriately competitive internationally. We have got to focus now on where in the future Australian manufacturing can be internationally competitive. There are great opportunities for Australia, in particular in advanced manufacturing to be part of global value chains. Certainly, the significant investment that the Government is making into our defence procurement presents a very important part of that opportunity.

KIERAN GILBERT: To some other issues the New Zealand First party deciding to go with Labor. Your reaction to that and particular in the context of well some quite pointed remarks by your Cabinet colleague Julie Bishop in relation to Jacinda Ardern’s Labour party. Well, your Government is going to have to deal with them.

MATHIAS CORMANN: We congratulate Jacinda Ardern on her election as Prime Minister of New Zealand. The relationship between Australia and New Zealand is close, it is strong. It will continue to be a very close and very strong relationship. We look forward to working with Jacinda Ardern and her Government into the future. 

KIERAN GILBERT: Comments that I guess Julie Bishop might not have said with her time over again?

MATHIAS CORMANN: I am not a commentator. Julie Bishop has addressed these matters. I think that everything has been said that needs to be said about that.

KIERAN GILBERT: Okay, well let us look at one last issue, the energy arrangement. Where is this at in terms of cooperation with Labor? Do you feel that you can strike a deal not just with Labor and Shorten federally, but with McGowan and the others at a State level who would need to get on board through the COAG process to make this work? 

MATHIAS CORMANN: Our national energy plan will put downward pressure on electricity prices, it will improve reliability and stability of energy supplies and it will help us meet our emissions reduction commitments in a cost effective and efficient way. Of course we would welcome Labor’s support even though Mark Butler decided to oppose the policy before it had even been released and before he had seen it. We welcome the fact that Labor appears to be changing its tune. This is a plan that is based on advice from the experts. It is a very sound reform proposal. Once people have the opportunity to properly work through it and digest it, I am quietly confident that certainly State and Territory governments around Australia will come on board. Over time hopefully the Labor party will see the merit in backing it as well. 

KIERAN GILBERT: Now in relation to the internal situation within the party, there has been claims that this is effectively putting a price on carbon by some in this debate. But within the party, do you feel that the Energy Minister has got the balance right? He is bringing your colleagues with him, in a sense that a number of them remain sceptical about the impact of climate change, like the former Prime Minister Tony Abbott. 

MATHIAS CORMANN: I was in the party room on Tuesday and the support for this package was very strong, very, very strong. The Coalition party room is very strongly in support of this reform package. We will want to see this implemented. This is not a carbon tax, this not a price on carbon. There has been trading in electricity before. There will be trading in electricity into the future, either over the counter or through the ASX. There is not going to be any certificates or subsidies like there would be under what is Labor’s stated policy at this point in time.  

KIERAN GILBERT: One of your colleagues put it to me during the week that meeting showed more than any other just how isolated Tony Abbott is now within the Coalition. Do you agree with that assessment?

MATHIAS CORMANN: Again, I am not a commentator. What I can say is that the Government adopted a reform proposal, adopted the proposal to pursue a National Energy Guarantee. That proposal was put to the party room and there is a very strong resolve from the Coalition party room to see this through, to implement this national energy guarantee as part of our broader national energy plan. 

KIERAN GILBERT: And I am about to cross the Holden plant in Adelaide. Just to finish where we began, do you give credit to those workers who stuck it out to the end there in Elizabeth, Adelaide? 

MATHIAS CORMANN: Holden is a great part of our manufacturing history in Australia. This is a sad day today for Holden and for its workers. Certainly, we will continue to work with those workers at Holden that are still looking for new opportunities to ensure that they have the best possible opportunity to successfully transition. We wish them all very well. 

KIERAN GILBERT: Thank you Finance Minister, appreciate it.