PRIME MINISTER:
Well ladies and gentlemen, the Deputy Premier and I have called this news conference to announce a joint Commonwealth/South Australian Government response to the decision of General Motors Holden to end the third shift at the Elizabeth plant. As well as the normal labour market programme, the assistance from Centrelink and all of the other things that are available, including guarantees from the company that entitlements will be met and paid in full. We can announce that we'll establish a special $10 million labour adjustment fund to assist displaced workers, similar to the fund established at the time of the Tonsley park closure by Mitsubishi - the Commonwealth Government will contribute $7.5 million and the South Australian Government $2.5 million. And this package will involve labour market programmes to provide intensive assistance to displaced workers.
I understand that in the first instance Holden will seek to fill the required redundancies voluntarily. I might point out that at the time of the Mitsubishi closure of those who registered, and it was some 900 I think for special labour market assistance, 79 per cent of them were placed in jobs. So it worked very well. Can I say that I discussed this matter last night with Mr Rann, he put the proposition to me and I readily agreed. The two Governments want to work together. This decision by Holden is an operational one, it's not related in any way to economic policy at either a state of a federal level and for my part I appreciate the spirit of cooperation from the South Australian Government and I intend to reciprocate and I'm glad that we're able to hold this joint conference and before handing over to Mr Foley could I point out that as well as the assistance for the labour market programme I have announced the special structural adjustment fund that was established at the time of the Tonsley park closure, which was to provide investment help for suitable alternative employment prospects. That fund will also be available for any projects that might arise as a result of the retrenchments by General Motors Holden, and there is some $27 million left in that fund.
So I think this is a very appropriate response by the two Governments, it will send some immediate assurance to the workers. I want to express on behalf of the Commonwealth Government our concern for their future. We'll expect Holden to meet all of its obligations to the workers in full, in terms of entitlements, and we'll work closely with the company, with the State Government, with the unions to make sure that the full benefit of what has been announced today will be made available to the workforce.
DEPUTY PREMIER:
Well can I firstly thank the Prime Minister for being with us today and from the outset say that we as the Government are extremely appreciative and thankful for the support that the Prime Minister and the Federal Government has given, not just to South Australia but of course to the workers involved. Can I also say a very disappointing announcement by General Motors Holden, but as the Prime Minister has said not one based on economic conditions; it's a function of the market for which General Motors is operating in. But the important point here is that we are confident at a time of record unemployment in South Australia that these workers will find work we believe quickly and the role of both national and state governments is to do what we can to facilitate the transition from one employment to another. So thank you again Prime Minister, I think it's good for our state and it's good for the nation to see both levels of government working very quickly together to ensure that we do what governments are here to do, that is to assist those most in need and I think this package will go a long way to ensuring that the vast majority of the workforce of Holden who have been hit by this most unfortunate decision by Holden will find future employment.
JOURNALIST:
(inaudible) hear the news just yesterday or the day before, whenever it was.
DEPUTY PREMIER:
Well I think first, Prime Minister if I could, just to say that look there had been rumours, as is the case in the automotive industry, there is often speculation about where particular companies may or may not be going. We were contacted by Holden in the last day or so requesting a high level meeting with the Premier and I and not surprised as much as extremely disappointed. I mean never has our economy in South Australia been stronger, on the back of a strong national economy, and no-one wants to see this type of decision taken by a company. But the situation in South Australia today is such that there are great job opportunities for South Australians to move from their current place of employment to another. We have a serious skill shortage in this state; record low unemployment and I'm confident, as it occurred with Mitsubishi workers, is that they will find future employment.
PRIME MINISTER:
Can I say I agree with that. I think the prospects for re-employment are as high as they could be. The unemployment rate in South Australia is 4.6 per cent. So most of these workers have very good prospects of re-employment and the measures that we've announced today will add to that and I hope that as the redundancies occur that people will find alternative jobs and we certainly want to see that happen.
JOURNALIST:
Prime Minister, do you agree with Rob Lucas, the Shadow Treasurer here, who says that the flow on effect could be as many as 4,000 jobs going in component makers?
PRIME MINISTER:
No, I'm more optimistic than that. The experience of Mitsubishi would not indicate that. I hope I'm right, I believe I am.
JOURNALIST:
Will there be any flow on effect?
PRIME MINISTER:
Well, I think what Holden has done is to recognise that the through-put of cars required to sustain a third shift and the third shift was always a fairly optimistic call by Holden, I don't think any of its competitors have got that around Australia. And they just took an operational decision and they're not going to reduce the number of cars they're producing, it's just that operationally they can't, given the number of cars they're selling, in a very buoyant car market, they can't sustain the third shift. So I am optimistic that the flow-through consequences will not be there.
DEPUTY PREMIER:
Look, the Prime Minister's point is really the critical one in that Holden's made an operational decision to expand and to have a crack at selling a larger volume of vehicles than they have ever done before. They were optimistic and we want that in Australian companies, we don't want Australian companies to sit on their laurels and to just be passive in the market place, that's been a problem of this nation for thirty years. So Holden's General Motors took a punt and it hasn't paid off. But we are not seeing a reduction in what has been a historic production level of Holden and they will be going back to where they were before they took that operational decision and I think that is a very important point we have to reinforce.
PRIME MINISTER:
I think they needed something like 185,000 units or thereabouts to sustain the third shift and they are doing about 165 so, but you got to remember this is all taking place in a situation where the car market in this country is incredibly strong and we are selling a lot of cars and we have been doing so for a long time. So we are not talking about a slump in the motor car industry, it is very important that that be understood.
JOURNALIST:
[inaudible] cars are imported though.
PRIME MINISTER:
Yes but that doesn't alter the fact that the motor manufacturing industry in this country is very strong.
JOURNALIST:
Mr Howard [inaudible] companies [inaudible] cutbacks today, is it time to look at raising those funds again?
PRIME MINISTER:
No it isn't and I don't agree with that, I don't agree with that assessment.
DEPUTY PREMIER:
And if I can also say I think that is a very poor response from both the union and the company. It is no accident that a reduction in tariffs in this nation, the automotive industry has coincided with the strongest performance of our carmakers in our history. If anyone thinks that tariff protection somehow protects jobs, is totally wrong.
PRIME MINISTER:
And the car industry is the best demonstration of it; 30 years ago we had an absurdly high tariffs and we were selling far fewer cars than we are now. I mean that is just not an argument that can stand up by any kind of analysis.
JOURNALIST:
[inaudible] Australian dollar changes and higher fuel prices may have played some role in this decision?
PRIME MINISTER:
It is too early to make that remark about the dollar. As far as fuel prices; well fuel prices are high all around the world, they affect everybody, they don't just affect Australian companies. So we have to be mature enough and mature enough and sensible enough to understand that from time to time, companies take decisions, doesn't quite work out as they planned and they then take an operation decision to re-group and that doesn't mean the policy has failed, it doesn't mean that they were wrong to take the decision, I agree with Mr Foley that we want companies to take a few risks and the important thing is that we have a strong economy that can provide a shock absorber for the people who are going to be retrenched. Hopefully they will all find jobs and the governments are in there working together to help them. Now that is a properly functioning economy. We shouldn't start running around saying we've got to re-impose tariffs, keep out imports - we've left that era behind. Tariff reductions occurred under the former federal government and we supported them from Opposition and we are not going back to those days, that won't achieve anything.
JOURNALIST:
You said that it was decision that Holden made, a flawed one, why put taxpayers' money into helping the company?
PRIME MINISTER:
Because we are concerned about the workers, that's the reason and I think that with an economy as strong as ours and a country as fortunate as ours, the least we can do is have a $10 million labour market assistance programme to make sure that workers with big mortgages and young families; they can't find jobs quickly unless they're helped and to help them find those alternative jobs as quickly as possible that is the least we can do.
DEPUTY PREMIER:
And we're not helping the company, we're helping the workforce.
PRIME MINISTER:
We're helping the workers.
DEPUTY PREMIER:
We are helping the workers and their families and I think that's a good policy response from both levels of government.
JOURNALIST:
[inaudible] Mitsubishi who are about to launch their make or break model?
PRIME MINISTER:
I wouldn't have thought so.
JOURNALIST:
Just on another topic.
PRIME MINISTER:
Yes, not to many other topics, I don't want to....
JOURNALIST:
[inaudible] criticised this cut in the top tax rate as simply delivering a tax cut for the rich, but that moving the threshold results in a fairer and capped tax rate, what's your response to that?
PRIME MINISTER:
Well there hasn't been any further cut. I simply made the comment when I was asked - did I think that the top marginal rate was too high and did I think it still came in at too lower level and I answered yes to both questions, but I didn't say we were going to cut it further? We cut it in the last Budget and that was widely applauded and widely welcomed. As to whether we have a capacity to go any further in future budgets, you will have to wait and see. Thankyou.
JOURNALIST:
Prime Minister I also have one more.
PRIME MINISTER:
One more? Yes.
JOURNALIST:
There were comments today by Jean-Louis Bruguiere, France's top stop terrorism investigator. He says that cities like Tokyo and Sydney would be significant targets for Al Qaeda and that we are un-prepared, what are your comments?
PRIME MINISTER:
Well I have said for a long time that this country can't imagine that it is free from the possibility of a terrorist attack. I haven't seen the context of his remarks. We are in my view well prepared but the important thing is not to have an effective response mechanism after the attack, the aim is to try and stop it occurring in the first place and the best way you do that is by having as good as intelligence as possible and also working very hard to make sure that any people within our own community that might have a disposition to behave like a terrorist is identified and dealt with. Thankyou.
[ends]