Manufacturing Sector

Mr ODENWALDER (Little Para) (17:24): My question is to the Minister for Manufacturing and Innovation. Can the minister inform the house about the challenges facing manufacturing in this state and any recent initiatives the government has taken to support the manufacturing sector?

The Hon. S.E. CLOSE (Port Adelaide—Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for the Public Sector) (17:24): I thank the member for his question and obvious very keen interest as a member in the northern suburbs and, indeed, covering the Holden site at present. The manufacturing industry in this state faces some tremendous challenges, due in no little part to competition for imports and the historically strong Australian dollar, which fortunately is starting to come down a little.

The outlook for the automotive sector in particular faces extraordinary hardship as it prepares for the closure of the Holden plant at Elizabeth in 2017. If the relatively high dollar and heightened competition from imports were not enough to deal with on their own, the Australian Workplace Innovation and Social Research Centre report highlights the detrimental impact on our local industry from the 2014-15 federal budget measures. The WISeR report found that the demand-dampening decisions contained in the federal budget are likely to affect the potential for the national economy to grow.

While the federal government has partnered with South Australia, Victoria and GM to set aside $155 million to assist industry to transition in the wake of the closures of Holden and Toyota, the WISeR report confirms that this level of assistance is not yet commensurate with the magnitude of the shock. In fact, the report points out that the commonwealth has pocketed $833.5 million in savings from cutting assistance to the automotive industry, much more of which could have been earmarked to reduce the magnitude of the shock to South Australia, especially for those communities in the north that have relied for decades on the Holden plant at Elizabeth for jobs and a regular pay packet.

This government has long acknowledged that a difficult transition is required in South Australia if we are to ensure that this state continues to be a place where we make things. I recently attended the opening of the $1.5 million Meridian Test Laboratory at Seeley International's headquarters in Lonsdale. Mr Seeley is a great South Australian and a role model for innovators who are willing to invest to commercialise their ideas, capture overseas markets and employ highly skilled South Australians.

Seeley International is also working closely with local educational institutions to drive innovation, with MOUs signed with Flinders University, UniSA and TAFE SA. The federal industry minister (Hon. Ian Macfarlane) took advantage of the occasion to launch a $60 million Next Generation Manufacturing Investment Program. Last year, the state government launched its $60.1 million Our Jobs Plan to help cushion the blow to our economy that will inevitably fall when the last Australian-made Holden rolls off the assembly line. The Next Generation fund launched recently complements these efforts.

Our Jobs Plan targets both the workers who will be affected by the transition to other industries as well as the local firms that can no longer rely on providing components to car makers to sustain their businesses. South Australia has committed $12 million to the Next Generation program that aims to encourage non-automotive manufacturers to invest in new machinery and equipment, modify existing plants to accommodate new machinery and train staff to use the new equipment.

South Australia is guaranteed $30 million of the fund, which will be spent in this state to support local manufacturers. By supporting investment in innovation and new ways of making things, we hope the fund will create the new jobs that will provide work for many South Australians in the automotive sector who will be displaced by the looming closure of Holden's Elizabeth plant in 2017. South Australia does excel at advanced manufacturing, agribusiness, mineral resource and energy services, and the manufacture of medical equipment and devices. It is these strong areas of the economy we hope to bolster through the Next Generation fund.

Manufacturers can apply for grants from $500,000 to $5 million, with round 1 applications open until 9 January next year. I encourage members to inform any prospective businesses in their electorates to apply for a grant. This government has sought to embrace innovation as a pathway to a sustainable manufacturing sector. South Australia will be disproportionately and adversely affected by the federal budget, and the WISeR report confirms this. South Australia faces some significant economic challenges. Our ability to embrace new ways of doing things and adopting advanced technologies to build—

The SPEAKER: Point of order.

Mr PISONI: Sessional orders.

The SPEAKER: I uphold the point of order by the member for Unley.

The Hon. A. Koutsantonis interjecting:

The SPEAKER: The Treasurer, if his lips move once more out of order, will be departing. It is no longer Ochi Day.

An honourable member: No longer what?—sorry, sir.

The SPEAKER: Ochi Day—'No' Day in Greece. The member for Goyder.