Challenges ahead for Turnbull ministry

THE new ministers in the Turnbull government with responsibilities covering the automotive sector will have some work to do to restore the confidence of workers in manufacturing and of motor dealers who are concerned about proposed changes to importing rules.

And one who has been criticised by dealers, Jamie Briggs, could find himself becoming a champion for drivers and road safety, particularly autonomous vehicles, in his role as minister for cities and the built environment.

The most senior of the three new ministers, Christopher Pyne – now industry minister, replacing Ian Macfarlane – will have the task of addressing the manufacturing sector, which according to the Ai Group’s Performance of Manufacturing Index (PMI) has been in decline throughout the period since the global financial crisis.

Victoria’s Kelly O’Dwyer has taken the reins as small business minister and may have to take the final decision on whether to allow parallel imports and, if so, at what rate.

Various dealer representative bodies, including the Australian Automotive Dealer Association (AADA) and the Victorian Automobile Chamber of Commerce (VACC), have campaigned strongly against the proposed changes.

Providing there are no more ministerial changes, and that the Coalition wins the forthcoming federal election, Mr Pyne’s role looks to be the most challenging as he oversees the closure of the three car-makers – Ford in October next year, and Holden and Toyota a year later.

It would take a major reversal of policy to re-energise the automotive manufacturing sector now, even if Mr Turnbull accepts the motor industry’s descriptions of modern vehicles as “computers on wheels”.

If there is no resurrection of the Automotive Transformation Scheme (ATS), or some other industry-focused policy, Mr Pyne will oversee the loss of around 200,000 automotive jobs, with around 60,000 of those in his home state of South Australia.

Given that there were only around 900,000 jobs in manufacturing (not counting all the service jobs dependent on industry) a couple of years ago, these are substantial losses.

As industry minister, Mr Pyne will also be responsible for manufacturing in general, a sector that has also been dwindling in recent years while the US, Japan and China fought currency wars to help keep their industries competitive.

Opposition industry spokesman Kim Carr was quick to laud the Turnbull government’s decision to put innovation and science back into the title of the industry portfolio, but he was wary about Mr Pyne’s appointment.

“Malcolm Turnbull and Christopher Pyne were both members of the Cabinet that ripped more than $3 billion from science, research and innovation over the last two budgets,” Senator Carr said.

Kelly O’Dwyer’s promotion to small business minister and assistant treasurer will see her working with the Australian Competition and Consumer Commission (ACCC) and the rules and regulations around fair trading, competition generally and other policy areas affecting car dealers.

Ms O’Dwyer is not new to treasury, having previously been parliamentary secretary to the treasurer, but her role then held responsibility for areas including housing supply, census and statistics, currency and legal tender and international economic organisations.

She will likely have significant input into whether the “effects” test is inserted into Section 46 of the Competition and Consumer Act to prevent large companies unfairly exerting market power against smaller operators.

Jamie Briggs, the former assistant minister for infrastructure and regional development, will apparently no longer have carriage of the proposal to relax the rules and regulations around the parallel importing of new and “near-new” cars.

It is not clear yet clear yet who will have to pick up that proposal or kill it off, but Mr Briggs may still be in a position to have a strong influence over the auto sector in his new role as minister for cities and the built environment.

Combined with Mr Turnbull’s acceptance of the importance of public transport, this may put Mr Briggs in a position to implement policies that may discourage the use of vehicles in congested city centres.

The minister for cities could facilitate overseas approaches to traffic calming like congestion charges and expansions of vehicle-free zones in major capitals.

On the other hand, Mr Briggs may also be able to assist drivers, and win Mr Turnbull’s support, if he gets behind the coming wave of technology in traffic management like intelligent transport systems and autonomous vehicles.

These are likely to win approval from a Turnbull Cabinet and could play a big role in improving the productivity of Australia’s largest cities, not to mention a possible sharp reduction in the rate of injuries and fatalities suffered in road crashes.

An industry policy that aims to build on Australia’s automotive expertise and the leading positions is has already built in the ITS area and the web-connected vehicle could see all three ministers combine to create jobs across the automotive spectrum.