Sydney-centric politicians ‘a threat to healthy federation’

Former Howard minister Nick Minchin says Sydney-centric governments put Australia at risk.

Nick Minchin says it was “immense­ly disappointing” that the car industry was allowed to “die” on the Coalition’s watch in 2013, under the leadership of two Sydney MPs in former prime minister Tony Abbott and former treasurer Joe Hockey.

Former Howard government industr­y minister Nick Minchin has warned that Australia’s federation is at risk from “Sydney-­centric” governments that fail to take a national perspective, citing the death of the car industry as evidence of what happens when both the prime minister and treasurer hail from the Harbour City.

Despite being a longstanding champion of free trade and small government, the former South Australian senator said it was “immense­ly disappointing” that the car industry was allowed to “die” on the Coalition’s watch in 2013, under the leadership of two Sydney MPs in former prime minister Tony Abbott and former treasurer Joe Hockey.

Mr Minchin, who returned to Australia last year after three years as consul-general in New York and now divides his time betwee­n Melbourne and Noosa, said no future federal government should allow a situation where “the two biggest jobs in the land are held by people from Sydney”.

“The manner in which the car industry was allowed to die shows there is a huge risk for any government, be it Labor or Liberal, if these two most important jobs are held by people from Sydney,” Mr Minchin told The Australian.

Former Howard government cabinet minister Nick Minchin.

“When prime ministers are ­selecting their governments they need to bear in mind the place they are domiciled in, the culture they are brought up in, as it is hugely influential in how their thinking affects policy.

“I say that as someone who spent the first 17 years of his life in Sydney but later served as a sen­ator for South Australia. It has a huge bearing on how you think.”

Mr Minchin, a senator for SA for 18 years, was a senior cabinet minister for much of his career, holding the portfolios of finance, industry and special minister of state under the prime ministership of John Howard.

The period was a high-water mark for SA in terms of its federal representation, with MPs including Alexander Downer, Amanda Vanstone, Robert Hill and Ian McLachlan all holding senior positio­ns in the Howard cabinet.

Mr Minchin regards that period­ as “something of a golden era” for South Australia in terms of its representation, but says the credit should go to Mr Howard as “a great federalist who supported the smaller states and the regions­”.

“It’s extremely disappointing that it was the first Coalition governm­ent elected after Labor’s interregnum in 2013 that presided over the closure of the car industry. It would not have taken much to ensure that maybe not Ford but Holden and Toyota maintained capacity in Australia.

“Instead, they were basically told that they could go away and that we couldn’t care less.”

The Abbott government effect­ively let the car industry walk out the door in 2013 after it removed $500 million from the automotive industry assistance scheme over two years.

Mr Hockey argued at the time that major manufacturers such as General Motors had failed to provide­ clarity on their long-term commitment to Australia, suggest­ing they were holding out for more government cash.

Mr Minchin believes the assistanc­e sought by the auto­motive sector was “negligible” compared with other industries that enjoy greater support.

But he rejected calls from some quarters, most notably Labor’s former industry spokesman Kim Carr, for the industry to be restarted through an injection of government cash.

“The point I made at the time was that once we lost the car indust­ry it would be gone forever, it would be impossible to resurrect it,” Mr Minchin told The Australian.

“Australia invested for a very long time in building up a world-class car industry and in an instan­t it was gone.

“We were one of the only seven countries in the world that could take a car from a design on a piece of paper to a product on the showroom floor. Once you have lost it, you can’t get it back.

“The subsidies that were require­d to keep it afloat were minimal. When you compare them to the hugely generous assistanc­e for renewables, and the support given to the agricultural sector, the amount required was absolutely minuscule. That’s the tragedy of it.

“I’m a low-tax, small-government kind of guy, but I’m also a conservative and a nationalist.

“There are certain capacities that once created we should not let go without serious contemplation, and the capacity to design and produce motor vehicles is one of those capacities. It’s a view that some of my Sydney-based free-marketeer colleagues regrettably didn’t subscribe to.”

While lamenting SA’s dimin­ished role on the national stage, with the number of SA seats falling from 13 to 10 in the past two decades, Mr Minchin believes SA has also been its own worst enemy in failing to embrace big economic opportunities, princip­ally its refusal to allow nuclear waste storage.

“The fact that we could not as South Australians see where the opportunities lie, but also where our responsibilities lie, meant it was harder for us to get a hearing on an issue like the car industry.

“The fact that SA has never embraced this underscores its perception as an utterly mendic­ant state, which sadly is what a lot of people think of SA.”