Senator XENOPHON (South Australia) (16:57): I think it is worth mentioning that this motion is partly about having a comprehensive industry policy and a policy of innovation and that it expresses concern about jobs that have been lost. This motion is clearly meant to make a political point. I do not begrudge the Australian Labor Party's doing so—it is their job—but I would like to come at the debate from a slightly different perspective. I think it is worth quoting what Donald Horne said in his iconic Australian book The Lucky Country, which I think is 50 years old this year. He used the phrase 'the lucky country' ironically. Everyone talks about Australia being the lucky country, and in many ways it is. But Donald Horne said: Australia is a lucky country, run mainly by second-rate people who share its luck. That is what he said 50 years ago, and you wonder whether it has held true over the last 50 years. There are some major challenges facing the economy. I do not think there is a simple solution, but let us look at what some of the challenges are. It is worth referring to a very good piece written by Emeritus Professor Richard Blandy, whom I regard as a very good friend and have a lot of respect for. He called it the way it was a number of years ago, when the South Australian Liberal government was seeking to privatise—and eventually did privatise—the state's electricity assets. Professor Blandy was a truth-teller who cautioned against the manner of their privatisation. Professor Blandy, in a piece he wrote for the Australian at the end of 2012, made reference to the International Monetary Fund's world Economic Outlook Database, which showed that Australians back then were: … only the 13th richest people in the world, a decline of six places from the heyday of the 1990s. He goes on to make reference to the Bureau of Labor Statistics in the US Department of Labor, which looks at issues of productivity and unit labour cost, and he says that that very comprehensive study found that: Australian productivity growth is the third lowest among the 10 countries, just nosing Spain into second-last spot. South Korea's rate of productivity growth has been 3.5 times Australia's— 350 per cent higher than Australia's— across the past 20 years. Finland and Sweden's rate of productivity growth— and no-one can accuse those countries of being low-wage countries— has been about double Australia's, and that of the US about 70 per cent faster. So this is a real challenge that, as a nation, we must deal with, because, if we do not, in this globalised world—and I will get to the issue of some of these free trade agreements that we have signed up to—we are going to be in real strife. We saw the shocking unemployment figures that came out today. And presumably that was before the most recent job losses that have been announced which will be impacting this economy in the months to come. I dare say that, in the lead up to the 2016 election, because of the announced shutdowns, we will be seeing factory after factory, industrial premises after industrial premises, closing down and people being given their redundancy slips—and that is absolutely tragic—in the many thousands, particularly in my home state of South Australia and in the state of Victoria. But it will have a national impact. So we have seen this blame game, with both sides throwing mud at each other. There is an issue about the role of unions. We see reports on that, and I note Phillip Coorey's report in the Australian Financial Review just yesterday in which he reported that Toyota blamed the unions in discussions with the government and raised issues about the lack of flexibility in trying to change conditions and not being able to allow workers to vote on that, and that the federal government, through Senator Abetz, indicated there would be intervention. I have great sympathy with what Senator Abetz said. If it is true that Toyota did say that this was an issue and if it is true that the company could not get a ballot of workers to modify some conditions to allow some greater flexibility and productivity then I think that is wrong, and I think there is validity in criticism of that. Having said that, let us put this in perspective. Of the cost of a motor vehicle, the labour costs involved are estimated to be between 13 per cent and 16 per cent. So if there were some flexibility then sure it would make a difference but it probably would not make a difference of more than one per cent in the cost of a motor vehicle. I need to say, about the AMWU in my home state of South Australia, that John Camillo, the head of the union there, cannot, under any reasonable criteria, be regarded as a radical or militant union leader. He is someone who has been respected by both employers and of course the workers he represents alike. He really desperately wanted General Motors Holden to stay on in South Australia, and I see him as someone who has been quite moderate and reasonable to deal with. As a result of the closure of Toyota, we have now seen the final domino falling. The members of the federal government say: 'What did the ALP do when Mitsubishi and then Ford closed? That happened under their watch.' And that is true. But the duty of care, I think, was greater on this government because there were only two manufacturers still standing—General Motors Holden and Toyota. Behind them, though, there is a very important supply chain of automotive component manufacturers. So there is a greater duty of care on this government in terms of the way that was dealt with, because once you lost Holden it was almost inevitable that Toyota would go and with it this massive supply chain with tens of thousands of jobs—up to 40,000 direct jobs in the component manufacturing sector. That is where this government made a number of fundamental mistakes. I think it was a mistake for the Treasurer, Joe Hockey—as capable and as competent as he is—to have basically taunted General Motors Holden, saying, 'Will you stay or will you go?' That sort of bravado was completely unnecessary and, I believe, completely counterproductive. It needs to be pointed out that, just 24 hours earlier, Mike Devereux, the outgoing Managing Director of General Motors in Australia, said to the Productivity Commission, 'We want to keep making cars here.' Then there was that extraordinary statement by the Treasurer, basically saying: 'Hurry up and make up your mind. Stay or go. Hurry up and tell us.' Senator Farrell: What about Truss—what about what he did? Senator XENOPHON: I think Senator Farrell makes a very good point. What the Acting Prime Minister, Mr Truss, said at the same time just exacerbated that. So it was completely unhelpful, and I believe it was reckless of the government to go down that path. What Richard Reilly from the Federation of Automotive Products Manufacturers has told me and what he has said publicly is that we are now in a diabolical situation, because what we are seeing is the collapse of the entire supply chain. That is why all stops have to be pulled out to see if alternative outlets for these products can be found so that there can be some hope for those tens of thousands of employees. The easiest and best way to keep those people employed in the automotive component sector was to keep making cars in this country. Of the G20 nations, there is only one country that does not manufacture cars, and that is Saudi Arabia—and they are desperate to be making cars. There is something seriously wrong about that. I agree with what the CEO of the Ford Motor Company in the United States has said: that if you lose manufacturing, you lose the bedrock of a good economy. This is not just about cars; we know that the mining industry has reaped great benefits from the innovation that has been driven by our automotive sector. This is very bad for our economy. My concern is that there is not a plan B. My concern is that, as to the policy—despite the best endeavours of Minister Ian Macfarlane, who I think is genuinely a good man who has been fighting the fight in the cabinet but who has been defeated by colleagues who take this flat-earth view of the world—we need to be very careful of how this is handled in the next few months because, if we see a collapse in the automotive supply chain sector, those jobs will go, and go very quickly That will risk putting South Australia, Victoria and, indeed, the nation into recession, because there are another 200,000 jobs that could be relying on that. Let us talk about other cost inputs like the carbon tax. I think the way the carbon tax was implemented by the former government was a disaster. The current government says that the cost of electricity would be reduced by nine per cent if the carbon tax is repealed. That is true, but the concern is that that is a superficial approach, because there are many other things that can be done to reduce power prices far more than the repeal of the carbon tax that need to be looked at. We need to look at the National Electricity Rules. They need to be reformed as part of an overhaul of our energy policies. The political debate over the past few years has been narrow and simplistic. To suggest or imply that the carbon tax is the primary cause of electricity price rises ignores the fact that changes to electricity transmission and distribution account for about half of electricity bills, that we have gold plated our electricity networks and that we need to give more power to the Australian Energy Regulator. The rules governing how networks are regulated oblige the AER to provide network businesses with a guaranteed return on their investment, regardless of whether the investment was necessary or worthwhile and regardless of whether the investment is later found to be unnecessary or premature. They are the sorts of reforms that we need to tackle. That is what this government needs to tackle, and I hope it can be done with bipartisan support. In my home state of South Australia, the announcement was made this morning in the Adelaide Advertiser that the largest wind farm in the state is set for the Yorke Peninsula. The Ceres Project is worth $1.5 billion and will have 197 wind turbines. Guess what: that will guarantee the highest electricity prices for South Australian consumers and businesses. Why? Because the problem with wind power is that it is intermittent and unreliable. You have to switch it off on hot days. If you put too many eggs in the wind farm basket, it will distort the electricity market and choke off investment in baseload renewables such as geothermal, solar thermal and tidal power. Allowing those 197 additional wind turbines to be built in the state is actually a very bad decision. We have more wind turbines in South Australia than the rest of the country combined. Unfortunately, that is a legacy of some very bad and ill-thought-out policy decisions of the government of Mike Rann in South Australia. That is something that we need to tackle, and that is why I welcome the role that Danny Price from Frontier Economics has played in pointing out the difficulties with wind energy and that it makes it more difficult for baseload renewables to get onto the market, let alone the impact it will have on prime agricultural land on the Yorke Peninsula and the impact it will have on the ability of aerial firefighters to fight fires if there are fires on the Yorke Peninsula. Earlier today I had to postpone a motion on the food processing and manufacturing sector because of a lack of commitment and a reluctance by both the government and the opposition to support it, notwithstanding the sympathy that was expressed privately to me by a number of members of this place. The inquiry that Senator Madigan and I have sought to put up—and Senator Madigan deserves to be acknowledged for his key role as the instigator of the Australian Manufacturing and Farming Program—would look at current laws relating to dumped imported products and the effectiveness of Australia's antidumping laws. We need to see whether we need to introduce similar measures to those set out a number of years ago in the United States in the Byrd amendment—named after the legendary senator Robert Byrd—where, if a company were found to have dumped goods in the country and dumping duties were applied, then the companies affected could, in effect, get those dumping duties. What is wrong with essentially compensating a company as a result of dumping? We know that just last week the Anti-Dumping Commission made a number of rulings against canned tomatoes from overseas which were found to have been dumped in this country, hurting SPC Ardmona. Dumping is illegal, but the way you prove dumping cases is extraordinarily difficult in this country. I will give you one example. Tindo Solar is one of the last remaining manufacturers of solar panels in this country. It makes a very fine product. It is based in Adelaide. In fact, former Prime Minister Gillard opened their premises. Tindo Solar have to struggle against dumped imported Chinese panels. The United States and Europe have said, 'Enough is enough,' and imposed a duty in respect of that. We are still working through that. The cost of running a dumping case for a small or medium business is simply prohibitive, although some changes brought by the previous government do provide some support. But it is just extraordinary that the major parties did not agree to that Senate inquiry. I will try again with Senator Madigan when the parliament resumes. I note that on 25 June 2013, when dealing with the Customs Amendment (Anti-dumping Measures) Bill, Senator Colbeck made mention of SPC Ardmona and the importance of emergency measures and dealing with emergency provisions. So to say that these matters have been dealt with previously in a Senate inquiry is not true. The coalition has not yet told us how it will tighten dumping rules, but we need to deal with them. I must, with a heavy heart, criticise former minister Craig Emerson. He was just so dogmatic, I believe, about free trade. We have not got a fair deal. It is not fair that we have the fair trade agreement with Thailand and their motor vehicles are sent over here but if we want to send a top-of-the-line Ford Territory that costs somewhere in the region of $57,000 it will cost well over $100,000 in Thailand because of non-tariff barriers. How is that free and fair trade? It is not, and it is killing Australian jobs. These are the sorts of things that we need to deal with. In relation to SPC Ardmona, I congratulate the advocacy of the local member there, Dr Sharman Stone. We need to have an effective dumping regime, and the ALP and the coalition have to get rid of this 'free trade at any cost' mantra. People joke about us in other countries. We are referred to as a 'free trade Taliban' because we have such a fundamentalist view of free trade. These are the sorts of things we need to look at in the context of the manufacturing industry. It is going to be a big ask, but, with our unemployment rate at a 10-year high, my fear is that we could be at a 20-year high unless we do something about this sooner rather than later. It is incumbent on all of us to get together, to be flexible, to acknowledge where we can improve the competitiveness of Australian industry, to improve productivity and to deal once and for all with dumping, which is killing Australian jobs, to make sure that free trade agreements are not just one way against Australia's interests. Those are the sorts of things that we need to do, otherwise I fear we are going to run out of luck. Donald Horne said 50 years ago, 'Australia is a lucky country, run mainly by second-rate people who share its luck.' That is what all of us in this place must avoid at all costs for the sake of the people of Australia.