PRIME MINISTER
FOR PRESS I NOVEMBER 1976
ADDRESS AT CHRYSLER INVESTMENT ANNOUNCEMENT
I would like to thank Chrysler for this opportunity to make
some remarks about the Australian motor vehicle industry
generally on the occasion of the announcement of Chrysler's
net-investment proposals.
The motor vehicle industry is, obviously, of great importance
to Australia's national economy and particularly-to
South Australia.
For all Australian industry, primary and secondly, the
present times are difficult.
The waste and extravagance we have seen in the previous
years left the economy floundering and weakened our
competitive position as a nation.
The Government has halted its own runaway expenditure and is
attacking inflation very vigorously. But that struggle
is far from over.
We always said that beating inflation would take a full
parliamentary term and there is no reason to change that
particular judgement.
However, suppliers who now find that tendering has become
more competitive, primary producers who have been suffering
prolonged low returns, employees who have foregone full
wage indexation, can take satisfaction from the fact that the
fight against inflation is being waged successfully.
The attitude that problems can be solved-if the Government spends
more and more of the taxpayers money has been finally laid to rest.
The rate of increase in tie Consumer Price Index has now
fallen for three consecutive quarters.
The increase in the September quarter is the lowest since
the March quarter in 1973, apart from the special circumstances
relating to health care last year.
Recent investment proposals by the motor vehicle industry
are evidence of the faith that overseas investors have
in Australia's economic policies. Without that confidence
I do not believe that investments not only by Chrysler
but also other segments of the motor industry would
have taken place.
This investment shows that the industry appreciates that
the Government of Australia is determined to get on top of
inflation. It indicates confidence in the Government's overall economic
policies, and that the Government welcomes. investment in
Australia. Chrysler has now given a further endorsement of the confidence
shown by the industry and the future of manufacturing in
Australia and in particular the future of motor vehicle
manufacturing in Australia.
The Ford Motor Company has announced-investments totalling
$ 67 million. Nissan and Toyota have also announced substantial
investment programmes, as have General Motors. The
proposals announced today make total investment in the motor
industry rise to very substantial heights.
I believe.-we would not have had these announcements in the
circumstances of last year. That they have been made in the
circumstances of this year indicates confidence in the future
of Australia by the industry and by the companies concerned.
The plans announced by Chrysler are not only important for the
industry as a whole and for Australia but they are also
of special importance for South Australia where motor vehicle
manufacturing is obviously very significant for the industrial
development of the State.
That is why I am delighted as I am sure the Premier is delighted,
that Chrysler had made these particular decisions. They
are of enormous importance to the many people employed in the
industry in this particular State.
The passenger motor vehicle industry, and the components
industry which is associated with it, account for about
9 percent of manufacturing employment in Australia and about
2 percent of total employment This is about the same
percentage as the mining sector. By any account, therefore,
it is important in a national context.
The steel, glass and rubber industries all benefit from motor
vehicle manufacture.
With the industry under pressure because of the consumer
swing from six cylinder to four cylinder vehicles, as well
as from inflation, and from pollution control requirements,
the Government early this year took the decision to support
the 85 percent local content plan for the motor vehicle industry. / 13
This eases the constraints on the industry and gives it
the opportunity to restructure, within itself, and with
the aim of increasing its own competitiveness.
In June this year the Government also announced that it
would take action to make sure that about 80 percent
of the Australian market for passenger motor vehicles
was reserved for local industry.
Following this decision and in the face of evidence that
imports are likely to be well above 20 percent in the market
next year, the Government referred the particular question
of import restriction to the Industries Assistance Commission
for a report by November 16.
If that report shows that action is necessary to make sure
that local manufacturers hold about 80 percent of the local
market, then action will be taken by the Government to
see that this is achieved. Thus the Government is playing
its part in providing the appropriate environment for long
term planning in this industry.
The Government welcomes the very substantial investments
of this company and other companies.
it is fair enough to say that if this climate had not been
established these investments would not have taken place
because it is not reasonable to expect companies to lay out
very large sums of money if they are not going to know the
climate, and the environment in which they will have to operate.
If it were not for the 85 percent car plan, and for other
later measures, the investment by Chrysler and by other firms,
would not have occurred.
That would have been disastrous for the cities such as Geelong
and States such as South Australia both of which depend
heavily upon manufacturers in the motor industry.
However, ultimately, the future of the industry depends on
the people in it; upon the attitudes and approaches of
people in the industy; on industrial relations in the'
industry and the contribution that the industry and the companies
make providing goods and ' services that are wanted by the Australian
people. Ultimately the success of any enterprise depends upon
the manner and extent-to which particular corporations can
meet the consumer demands and requirements of the time.
In this sense the consumer is the arbiter of what happens.
The Government is determined to play is part.
I would like to believe and I hope it is correct that what is
happening now in the industry will begin a long period of
stable and permanent development in the industry.
We will remember that through the* 1950' s and 1960' s there was
fairly stable and sensible development. Then inflation and
cost rose very greatly, there were also tariff cuts which altered .4
the competitive position of industry in relation to imports.
As a result of those measures and after-the tariff cutsacross
the board a very large number of imports came
into the industry.
I believe those measures upset the stability that the
industry had known for-some time. Imports in those circumstances
obviously claim too large a share of the market. Development
in Australia, employment and production in Australia were coming
to be seriously threatened.
A number of ad hoc measures were taken over a period to
redress that situation import quotas, and temporary
reductions of local taxes to try and encourage greater
sales of motor vehicles.
I hope the ad hoc * stage is past. We are now into long term
developmental plans that should auger well for the industry.
0000o0o0000