Business News

Saturday 17 August 2013. Labor’s decision to unaccountably pump a further $2 billion into car industry assistance is another hastily-conceived election con.


Today’s promise by Labor represents another chapter in its tale of providing an endless stream of untargeted taxpayer handouts, and we all know that Kevin Rudd’s promises aren’t worth the paper on which they’re written.  


It also comes just two weeks after a further $200 million was promised to the industry without any explanation.  


Labor’s approach is a giant taxing, big handouts, ‘money-go-round’.


Given the scant justification and costings accompanying it, the Coalition will not be rushed into making a decision on this announcement. We also want to know what specific changes Labor will make to the Automotive Transformation Scheme (ATS) as a result of this announcement.  


Will it require car makers to have an export program? Will they ask for minimum job guarantees? Will they finally mandate transparency for taxpayers?  And what will be the basic percentage split between the motor vehicle producers and the component suppliers for any of the newly-announced years of the ATS program? 


This is money being promised for another 12 years, on the never-never, by a party that hasn’t got its car industry policies right for the past six years.


It is also being poured into a scheme that has already failed, and to which Labor has routinely over-allocated money before then being forced to siphon it off into other grants and programs.


Unlike Labor, the Coalition has a plan to make it cheaper to build cars in Australia, with no $800 million hit over the next decade from the carbon tax, a lower company tax and red tape reduction across the economy by at least $1 billion every year. We will also make it cheaper to buy cars in Australia with the abolition of Labor’s $1.8 billion attack on the industry through its FBT changes.  


We will also initiate a Productivity Commission review into car industry assistance – because it is not about what is spent, but how it is spent, to ensure long-term viability and value for money.  


Under Labor, car policy has been a never-ending catastrophe. Mitsubishi and Ford have both decided to end all car manufacturing in Australia during Labor’s time in office; grants have routinely been made to companies that have subsequently laid off workers or folded completely; direct and indirect employment has plummeted by around 80,000 jobs; production and exports have both crashed by around 30 per cent; and turnover has fallen by just under 20 per cent.   


It also needs to be remembered that Labor has already broken $1.4 billion in promises to the industry and, if it is re-elected, there is next to no likelihood this funding announcement would remain intact.  Its signature car industry policy at the 2010 election – the Cash for Clunkers howler – didn’t even survive for another six months after the poll before being dumped..