PRIME MINISTER:
Well ladies and gentlemen, thank you very much for coming to this news conference, and I acknowledge the presence of Kevin Foley, the Deputy Premier and Treasurer of South Australia and Ian Macfarlane, my Ministerial colleague.
Today as many of you will know, Electrolux made an announcement that will affect, over time, some 500 jobs in Adelaide. And I am here today with the Deputy Premier of South Australia to announce that the Commonwealth and South Australian Governments will commit $35 million to assist South Australians who have been affected or will be affected by the Electrolux announcement. And we're naturally disappointed in the announcement, but it's an announcement driven by commercial decisions and realities as far as that company see them, and we do appreciate the fact that at every point Electrolux kept the South Australian and Commonwealth Governments informed. And it has allowed therefore the two Governments, which have worked together very closely, to respond immediately to the Electrolux announcement with the announcement that we are now making.
The loss of some 500 jobs, albeit over a period of time in the north west of Adelaide will be difficult for the communities affected and therefore the two Governments will provide assistance to both the workers and also to local industries to adjust. Firstly, the Federal Government will provide $5 million in labour market assistance to help workers who are displaced by this decision by Electrolux and the industrial restructuring that is involved.
Additionally, the Federal and South Australian Governments will provide an innovation and investment fund for South Australia of some $30 million, being $25 million from the Commonwealth and $5 million from the South Australian Government. And the details of how this new fund will operate will be developed over the coming weeks by the Minister and by the Deputy Premier.
It is envisaged, however, that the fund will operate in a similar manner to the SAFSA Fund operated very successfully over the past two years. And that particular fund, which followed an earlier announcement of a manufacturing close-down funded some 19 projects and created 1300 direct jobs which was in fact double the number of people who lost their jobs as a result of the closure on the Lonsdale plant. We, in the two Governments, think this is a very effective; it's obviously an immediate response.
The decision has been taken on top of the labour market assistance the Federal Government will provide, the decision has been taken to establish a fund to help with the establishment of new industries and businesses. The Electrolux company has taken a commercial decision about the closure of its operations in South Australia. I understand the company has said it does not affect in any way its operation at Orange in New South Wales. We think the best response, and we're instructed by the experience we had with the closure of the Lonsdale plant, the best response is to provide labour market assistance and to then call for expressions of interest in the establishment of new enterprises. And the experience with the Lonsdale project or closure shows that that particular fund worked extremely well and we expect this one to work in the same way. And we are optimistic that we will have the same success in relation to the placement of people in employment and the establishment of some new businesses.
I do want to thank Mr Foley for the co-operation that has existed between the two governments. It is important when things like this happen that state and federal governments work together in an intelligent, sensible way to help people and not try and jockey for some kind of political advantage. The South Australian economy is been performing well, the unemployment rate in that state is right on this 30 year national low of 4.8%. There is every reason to believe that in common with the rest of Australia, the South Australian economy will continue to perform well and although we are very disappointed with the Electrolux decision it is a commercial decision of that company and it's given its explanations and it can answer for that decision, but what the two governments are doing immediately is saying well we'll help and we'll provide this fund. It's a sensible use of taxpayers' money, we're not investing taxpayers' money in a failing company, we're saying some people are going to be retrenched potentially and therefore we're going to help with the establishment of new enterprises. It worked very well recently and there is no reason why it shouldn't work again. Do you want to add anything Mr Foley?
FOLEY:
Well thank you very much John, can I firstly thank the Prime Minister and particularly Ian McFarlane the Industry Minister for the support the Federal Government is providing to South Australia and has done so for the time of our office. It's important to note in South Australia, as the Prime Minister has said, a very strong economy, a record low unemployment, 1800 new jobs created in August, but what we're seeing in South Australia is 20 years of significant economic restructuring. There are elements of our manufacturing sector which are not supported in the economy as it stands now in South Australia, so we are seeing an emerging economy, new diverse manufacturing and this fund, with the support of the Commonwealth Government will ensure that we continue to innovate in South Australia, be it the mining sector, the defence sector, the manufacturing sector where we are strong, competitive players in niche markets in the world. We will continue to be a national force in manufacturing. So again, Prime Minister to you, thank you very much.
PRIME MINISTER:
Thank you. Any questions?
JOURNALIST:
What form will these, you said $5 million dollars immediately on labour market programs...
PRIME MINISTER:
Well it's really a series of programs where we provide intensive job assistance to place people in alternative employment as quickly as possible. As I understand the announcement and Ian will correct me if I get anything wrong, there is going to be some closures in April and then the rest are going to occur in 2008. The company will be seeking voluntary redundancies and the way these labour market programs work is that we provide a sort of a customised service to the people who are affected and we try and place them as quickly as possible in alternative employment. We've done this, we do it on a regular basis, there was some closures by BlueScope Steel in Wollongong, we did it there, we did it in relation to one of the closures on the Central Coast of New South Wales by one of the retail stores and it's a way of really sitting down with people virtually on a one on one basis and trying to help them as quickly as possible get placed.
JOURNALIST:
Seventy thousand dollars a job in a growing economy is very generous.
PRIME MINISTER:
Well bear in mind that you can't really just do that simple arithmetical extrapolation because the job output could well be much greater than the 500, and in any event if you assist with the creation of a new business, that's a very good thing for the economy generally. I think what Mr Foley said should be borne in mind, the South Australian economy is undergoing probably a more significant transition than the individual economies in other parts of Australia. It is certainly changing in relation to its historic manufacturing base. The mining industry will obviously bulk more largely and significantly in South Australia in the years ahead. There has been a determined attempt to get more service industries into South Australia and of course it has one other very great export industry which is going through some challenging times at the moment, namely the wine industry, but over the longer haul the South Australian wine industry has been a stellar performer. So I think anybody who understands the changing character of the South Australian economy will recognise that providing transitional assistance of this kind is a very intelligent investment of taxpayers' dollars.
JOURNALIST:
Prime Minister, if the economy is so strong in South Australia, why throw such a massive amount of money, rather than let the market forces play out?
PRIME MINISTER:
Well I don't regard it as a massive amount of money and when you bear in mind the sort of investment we made after the closure of the Lonsdale plant and the number of people who were affected there, I don't think it's massive at all. I think it's sensible. There's no point in engaging in hairy-chested economic rationalism, sensible economic rationalism is preferable and it would be silly and a waste of money to say to the company which has made the decision we'll give you $30 million to stay open. We're not doing that because that would be the economically irrational decision. We accept their decision, taken by them, according to their commercial judgement to close down, but we're saying to the people affected and the communities affected that we will help other enterprises establish themselves and I think that's very sensible. And I think a Government that's run its accounts well and has a strong surplus should be willing to help people to get their jobs, to get other jobs and to establish other industries.
JOURNALIST:
Which Government approached which Government? Who initiated this?
PRIME MINISTER:
We did.
JOURNALIST:
Mr Howard, you made some comments this morning on radio about consideration you're giving to a citizenship test. Could you just clarify, does that consideration include the possibility of an English language test?
PRIME MINISTER:
There's going to be a discussion paper released very shortly by Mr Robb and all is going to be revealed.
JOURNALIST:
There was some confusion in the questioning this morning?
PRIME MINISTER:
I thought the confusion was about some visa application.
JOURNALIST:
Can you tell us whether you're considering an English language test?
PRIME MINISTER:
Well having a good knowledge of English will feature very prominently in this discussion paper.
JOURNALIST:
Mr Macfarlane, could you tell us the outcome of your talks with the fruit and veggie people?
MINISTER MACFARLANE:
Yeah, we had very constructive discussions and those discussions are ongoing.
PRIME MINISTER:
Well there you go. One more, yes.
JOURNALIST:
Prime Minister are you disappointed by Lawrence Springborg's decision to step down as Opposition Leader in Queensland?
PRIME MINISTER:
Yes I am. I like Lawrence Springborg. I thought Lawrence Springborg ran a very good campaign in very difficult circumstances. I know he's been in Federal Parliament for a long time, in State Parliament, rather, for a long time and he's still only a very young man. He went in at what, 21. That is very young, it was even younger than a South Australian Federal Member I seem to recall going in at the age of 22. But he's obviously decided for a combination of family and other reasons to stand down. I am very sorry about that. I thought Lawrence had a lot to offer and I hope he's not lost to politics of the National Party in Queensland. And I could also say that there has to be a silver lining to every cloud and that great Queensland copper Jack Dempsey has won the seat of Bundaberg by a small margin.
JOURNALIST:
Mr Howard, can I just ask you about Queensland....
PRIME MINISTER:
We're not going to have a long news conference on Queensland. Our South Australian guest will wonder what's happened.
JOURNALIST:
Sorry Kevin. The Federal redistribution. There's a little bit of unrest amongst some of your members up there about who's going to end up where. Are you planning to sort of intervene or...
PRIME MINISTER:
Look, these matters will be resolved in a sensible fashion.
Thank you.
[ends]