Industry has welcomed the federal government decision to maintain $500 million in vital funding to the automotive industry to 2017.
Ai Group Chief Executive Innes Willox said the decision would help ensure the supply chain across the automotive industry remains intact.
“Without continued funding, there was a very real risk that all automotive assembly in Australia would have ended well before the final dates announced by Ford Australia, GM Holden and Toyota,” Mr Willox said.
Industry Minister Ian Macfarlane announced last week the federal government would maintain the Automotive Transformation Scheme (ATS) after strong speculation it would withdraw the $500 million allocated to assist automotive vehicle and parts manufacturers transition into new manufacturing initiatives.
“As a matter of principle government funding approvals and commitments that have already been made must be honored in the interests of promoting trust and certainty in government policy, Mr Willox said.
“Honoring such funding commitments are especially important in the auto sector where component suppliers in the automotive industry need the time and opportunity to reorient towards new markets and products before the planned closure by the car assemblers in 2017.
“The businesses and the employees in automotive supply chains are a valuable part of Australia's industrial ecosystem. They have important roles to play in the restructuring of the Australian economy as we build a stronger and more resilient foundation that is less reliant on the investment in mining and energy projects and the high commodity prices that have featured so prominently in the last decade.”
Mr Willox said the challenges within the industry mean there is a need for substantial reorientation of the design of the Automotive Transformation Scheme to ensure those businesses who can continue to operate can do so.
“Ai Group believes this reorientation of the ATS must be finalised as a matter of urgency especially given the weakening economic conditions in Australia,” Mr Willox said.
VACC, Victoria’s peak automotive industry body in the retail, service and repair sector of the automotive industry, also welcomed the decision.
“It is essential that Australia retains its manufacturing skills base and develops capacity further into advanced manufacturing,” VACC Executive Director, Geoff Gwilym, said.
“Coupled with the Australian Government’s Growth Fund, the ATS will assist greatly in the reskilling of workers in the automotive industry affected by the car plant closures.”