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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-06-16 Daily Xml
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Automotive Transformation Scheme

The Hon. G.A. KANDELAARS (15:05): My question is to the Minister for Automotive Transformation. How is the government assisting automotive supply chain companies and their workers to transition to new opportunities as the closure of automotive manufacturing in South Australia approaches?

The Hon. K.J. MAHER (Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Aboriginal Affairs and Reconciliation) (15:05): I thank the honourable member for his important question and his interest in this matter. I note that the honourable member has made significant contributions recently in this place on this topic, so I thank him for his very genuine interest in these matters.

Following the announcement by Holden that it would cease manufacturing cars by the end of 2017, there were a number of responses from the state government. There is a comprehensive program called Our Jobs Plan to support the manufacturers and their employees in transitioning to different industries and new markets. As part of this, we established an $11.65 million Automotive Supply Diversification Program specifically to support eligible companies to diversify to secure alternative revenue streams for a sustainable future.

I can announce to the chamber that I have recently approved two additional recipients of grants through the retooling component of the program. Rope and Plastic Sales Pty Ltd is a privately owned company based at Regency Park. I understand that company has about 85 per cent of its revenue exposed to the automotive sector because they manufacture primarily plastic car battery components. Rope and Plastic Sales has been awarded a $200,000 grant to assist the company to develop and manufacture a portable, fully adjustable clothesline system here in South Australia. The clothesline will be targeted at small and large-scale aged care, health and urban living environments.

This niche market is currently serviced by one other company that imports 100 per cent of its product. The innovative approach to transforming what this company produces will ensure that it has the best chance of remaining competitive following the closure of the automotive sector at the end of 2017. It is a testament to this company's willingness to transform what they do and look to have a different future, and the government is proud of the fact that it has been able to assist this company.

I understand that Rope and Plastic Sales has chosen to work with a number of other South Australian companies that will be affected by the automotive industry closure, to supply goods and services for the project. John Packer Design will assist with the design and working drawings, Gadac Plastics will supply the tooling and plastic parts, Custom Cartons will supply the packaging, while the Phoenix Society will assemble, test and package the final product.

I can also announce that grant funding of $243,755 will be provided to Numetric Manufacturing. Numetric is located at Wingfield and is a contract manufacturer using state-of-the-art computer numerically controlled equipment to supply high quality machine components to Holden, Toyota and Ford. I understand the company also has a very significant revenue exposure—about 80 per cent—to the automotive sector.

The company will use this grant to establish advanced aerospace manufacturing. I understand Numetric has been selected by BAE Systems Australia as a long-term key partner to support its advanced F-35 aerospace tail fin component manufacturing facility based at Edinburgh Park. This new project will enable Numetric to upgrade its facility to support the semi-finishing of titanium tail fin components that will support BAE Systems. The project will see new tooling and significant upgrades to Numetrics' manufacturing facility to ensure that it is internationally aerospace accredited to Aerospace Standard 9100, as well as BAE quality accredited and international traffic in arms regulation-ready.

This is a great example of a company responding to the challenge to change what it manufactures and how it goes about it. The government has also been able to provide support through the Automotive Supply Diversification Program to support this diversification to secure alternative revenue streams for a sustainable future for Numetric and its 48 employees.

I can inform the council further that there have been recent changes to expand the Automotive Supply Diversification Program, which will ensure that more companies affected have access to support provided through the program. Previously companies requesting support through the program were required to have a minimum automotive manufacturing revenue exposure of 40 per cent. The government has lowered this revenue exposure requirement to 20 per cent, which will ensure that a number of additional companies employing around 650 people will have access to the program.

The state government is open to amending our existing programs as we move forward to meet the needs of industries transitioning to new markets in the wake of Holden's closure. The government has also expanded the support provided to the Automotive Workers in Transition Program to eligible workers. Previously, workers seeking to access the scheme needed to be employed by an automotive supply chain company, with a minimum automotive revenue exposure of 40 per cent. Similarly, we have amended this program to increase its eligibility to companies with exposure of 20 per cent.

The changes in these programs are a proactive response to the changing conditions and changing needs of companies. The government is also extending the 12-month support period for automotive workers who are displaced to a 24-month support period, which will encourage more workers to register for and be supported through the program. The state government is listening to what companies want and to workers' feedback about the support programs we have established to assist them and how we might change them in future. We are open to further changing schemes as conditions change and as we find out the needs of further companies.

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