12 February 2014




SUBJECT/S: Future of manufacturing, Medibank Private and Closing The Gap

CHRIS HAMMER: Well the fallout from Toyota’s decision to stop making cars in Australia continues, but with the political debate moving on from who’s to blame for Toyota’s decision to what happens next, to discuss that and other issues of the day I’m joined by Labor Member for Greenway, Michelle Rowland. Michelle welcome.


HAMMER: The Government is considering a job package for the Toyota workers. What must such a package contain?

ROWLAND: Well I think firstly we need to realise that this is a situation where Government has been making erratic decisions about which areas of industry it will choose to support and which it doesn’t. It’s very unclear what’s so much better about supporting a chocolate factory with Government funds as opposed to the car industry, I don’t know.

But, putting that to one side, I think you raise a very important point about where to from here. The problem we have under this Government is that we don’t have a long term strategy for dealing with a transformational economy. And one of the sad things about this whole situation is that we have the Prime Minister getting up in Parliament talking about how we’ve got to have new jobs, we’ve got to have different jobs, but no plan, no plan for it all, no industry policy. Nothing was taken to the last election to set out what their vision was in this area. And I contrast that very starkly to the Keating Government, where it was recognised that we were in an era of extreme transformation – the Button Car Plan for example. But, you had a couple of things happening: firstly you had a lot of investment going into vocational education and higher education, here there is no such strategy even in a training sense.

HAMMER: So, look, at the risk of misquoting the Prime Minister, the Federal Government’s plan for the economy seems to be to get all the parameters right and then letting private enterprise bloom. If you get all the macro-economic and micro-economic conditions right, wages conditions, then the natural growth of private enterprise will take care of the rest, your point is that that is not enough?

ROWLAND: Well it’s not enough and I’ll even go back to say I don’t know if their plan is to get the economic parameters right. I don’t even think this Government has a clear plan to get in place the economic circumstances to drive growth and drive jobs.

We had Tony Abbott getting up yesterday saying ‘I’m not in a position to create jobs, it’s not my role, it’s not the role of Government to create jobs.’ Before the election, didn’t he promise to create a million jobs? And now he is going back on that one.

But, I think it’s more important to recognise that even if you get all the economic parameters rights, in a globalised economy, in today’s economy, in regional economies where we have very mobile labour markets, where the dollar shapes what investments are taken and the direction in which future jobs will grow, you need to have a long-term plan to transition an economy. That is not present today.

I will give you an example. In the last Government we had a very clear strategy for growing Australia’s role in the Asian region, Australia In The Asian Century. Part of that was about growing markets, the growing middle classes of India and China. Now I can tell you that there is huge demand for many skills that we have here in Australia. In the case of India, one of the big problems they have is the supply chain, the breakdown of logistics. There is an incredible statistic that says for every bag of rice that leaves production only about a handful of it ends up making it to the end-user. The amount of waste in the supply chain is enormous. Australia has tremendous skills in logistics. My area in Western Sydney is a specialist in this area, you have many of Australia’s biggest companies based there, you have many training providers that specifically give education and training in this area. Where’s the plan for this? There’s nothing.

HAMMER: If they’re so successful companies, the Government’s response would be, well if the markets are there why don’t the companies go and get them? Why do you need Government intervention, Government help, what they might call corporate welfare, to help such big successful, profitable companies?

ROWLAND: Well if that’s their view then why did they pick Cadbury to support? If that’s their view why did they pick a fish farm in Tasmania to support?

There is no consistency whatsoever in their thinking in this area. No consistency in their decision making.

HAMMER: Okay, now can I ask you this: one of the factors that is being blamed for the demise of the Australian car industry is low tariffs. Nevertheless there are tariffs on imported cars. If Australia does no longer have a car industry, should tariffs on imported cars go all together?

ROWLAND: Look, I think that’s another thing that needs to be examined, another issue that needs to be examined very closely. Again, I don’t think we should be making policy decisions about these sorts of things in a vacuum. And I think that the government would be wise, rather than making knee-jerk reactions – you and I don’t know what they’re about to announce. Not knee-jerk reactions but decisions that are actually based on sound economic modelling. We haven’t seen any of that happening in this area.

HAMMER: Okay. A couple of other questions. Medibank Private – should it be privatised?

ROWLAND: Well, Labor’s long been opposed to the privatisation of Medibank.

HAMMER: But why?

ROWLAND: Because the social benefits, the economic benefits have not been made out.  There’s no merit in doing any sale if it is not in the public interest. And Labor takes a very strong public interest test to the privatisation of government assets.

Under Paul Keating we had Qantas, the Commonwealth Bank for example, government pulling out in those areas.  But in each case there was a very strong and a very rigorous examination of the public interest test. I’ll contrast that starkly with the Howard Government when it decided to flog Telstra. Not only did they do what I call the lazy way of raising funds just to have money to spend in future but also they didn’t address in the telecommunications sector some of the fundamental problems with structural separation and the vertical integration of Telstra. It was only years later when Labor came to office that these issues actually got addressed in the context of the NBN.

HAMMER: But returning to Medibank Private, what’s the compelling argument to keep a private health insurer in government ownership.

ROWLAND: Well I would like to see the compelling argument to sell it. We haven’t seen a public interest analysis of why this needs to be sold. But we do know that at least $2000 a day is being spent on spin doctors to promote its sale. Now if this isn’t misplaced government priorities in the context of everything that has been happening over the last couple of days, then I don’t know what is.

HAMMER: Okay. Today in Parliament Tony Abbott is making his Bridging the Gap speech.  First thing, you must be pleased that a Liberal Prime Minister has decided to continue these annual reports. That surely is a good thing?

ROWLAND: Look I think Closing the Gap is something that needs bipartisan support because we need to bring the entire country with us on this matter. I do welcome that, but I would also caution that we need to have a Government that supports a range of funding measures that are needed to give effect to Closing the Gap. I’ll give you some examples again: I actually represent part of the Blacktown local government area which has the largest urban indigenous population and youth unemployment, particularly among indigenous people, is one of the major challenges. We have a lot of specialist training providers who rely on government grants in this area in order to give that specialist care and attention to our young people. I would want to ensure that not only do we maintain that funding but it is in fact increased. Because unless we really grapple with issues of unemployment amongst indigenous communities and, I would say, youth unemployment, then I think we are going to unfortunately be presented with Closing the Gap reports which consistently identify employment as an area where we’re falling down.

HAMMER: And I believe today’s report shows exactly that, that the gap in employment, unemployment, is not closing six years in. That spells what? 

ROWLAND: Look I think that spells the need for long term investment in this area, as I have previously suggested. I think it also requires us not to rest on our laurels when it comes to some other areas like preschool attendance. We need to make sure that the education pathways and training that are offered to indigenous communities is maintained. We need to ensure that the social support structures are there. So I think that it points to a need for training but also a need to focus on those areas where we’ve probably been doing well. Because the last thing we want is to address areas that we might be falling down in one year and then neglect areas where we’ve thought we got that right. You never get things absolutely right in this area. This is an area where constant vigilance is required to ensure that the gap is well and truly closed, not just in disparate areas.

HAMMER: Okay. Michelle Rowland, thanks very much.

ROWLAND: My pleasure.