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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2008-02-27 Daily Xml
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MITSUBISHI MOTORS

The Hon. R.I. LUCAS (15:15): I seek leave to make a brief explanation before asking the minister representing the Treasurer a question about Mitsubishi.

Leave granted.

The Hon. R.I. LUCAS: A leaked copy of the cabinet submission forwarded to the former government, dated 24 January 2001, states:

The two automotive manufacturers—

that is, Mitsubishi and Holden's—

directly employ over 7,000 people and support a further 14,000 indirect jobs.

I interpose that that estimate by the department of industry and trade (as it was then known) was based on a paper produced by a respected economist, Barry Burgan, dated 16 December 2000, entitled 'Mitsubishi Motors: the Role in the South Australian Economy.' That cabinet submission, in another part—and this was in relation to a previous assistance package, prior to the government's $35 million package post the 2002 election—stated as follows:

Should the company not continue as a substantial manufacturer for at least 10 years—

that would be 2011—

then 50 per cent of the government's support will be repaid with interest.

Then, further on in the recommendations, it states:

Any repayment of loan funds under default conditions specified above will attract interest charged at the state government borrowing rate.

My questions are:

1. Did the government, when it provided $35 million in assistance after the 2002 election, also require repayment of interest at the government borrowing rate, as well as the repayment of the $35 million? I note that the Premier has made great play of the fact that he sent a letter of demand for the $35 million and that it was repaid.

2. Given the decision to close Mitsubishi, what repayment—if any—of the previous assistance provided to Mitsubishi is required and is being pursued?

3. Does the government now acknowledge that the approximately 1,000 remaining direct jobs in Mitsubishi also support a further 2,000 indirect jobs in the South Australian economy?

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (15:17): I was acting minister for industry and trade at the time of the Mitsubishi closure, so I did sign off the letter in relation to the request for the $35 million that was paid back. Interest was required and I believe there was an additional amount—something in the order of $34,000 or thereabouts (if I recall correctly)—of interest when that money came back.

An honourable member interjecting:

The Hon. P. HOLLOWAY: It was $34,000 or something like that on top of—

The Hon. R.I. Lucas: On $35 million?

The Hon. P. HOLLOWAY: It was for two or three days. It was based on the date of the default, when the default took place, which was, of course, the announcement of its closure. In relation to the multiplier effect, again, I can comment, having been the minister at the time. When I was asked about this question it was certainly true that, in the 1980s, the motor vehicle industry was considered to have a significant multiplier effect.

An honourable member interjecting:

The Hon. P. HOLLOWAY: Well, 2001, but a significant multiplier effect. However, what has been obvious in relation to Mitsubishi is that, of course, it produced only 10,000 cars in the year prior to its announced closure. Clearly, a number of other component manufacturers, and so on, had been diversifying their production. Of course, engines were probably imported back in 2001. That was probably prior to the closure of the engine plants so, again, Mitsubishi was significantly importing towards the end. One suspects that, from some of the anecdotal stories, all of the 930 or so employees were not actually fully employed during the final days.

I think it is clear, and it is certainly the advice that I had as the acting minister at the time, that the multiplier effect would be significantly less than one would have expected in the past because of those and other factors.

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