No free ride for carmakers, says Labor

No free ride for carmakers, says Labor

Labor has defended its decision to pour an additional $500m into the ailing car industry.

Industry Minister Kim Carr told the Australian newspaper the new allocation would be performance based and “there would be no handouts.”

This follows claims by Opposition leader Tony Abbott that the government is offering a "blank cheque" to carmakers.

Mr Abbott described Labor's assistance package as a "bandaid on a bullet wound", given the impact of the carbon tax and changes to fringe-benefits tax.

The Opposition Leader has refused to match Labor's commitment but promised to engage in post-election talks with Toyota and Holden about the future of the automotive industry.

A re-elected Labor government would pump another $500 million into the country's ailing car industry from 2016 to 2020 and hundreds of millions over the subsequent decade.

The commitment is designed to secure the medium-term future of General Motors' Holden operation and the Australian arm of Toyota.

But at least some of the new money will also help keep Ford's research and development plant at Broadmeadows working until the last day of operation at the end of 2016.

The promised new outlays are designed to protect the jobs of 50,000 auto-sector workers.

Senator Carr says the $500 million in industry assistance is conditional on co-investment performance milestones.

The performance milestones proposed in the new package would operate on the same basis as previous agreements between the commonwealth and the companies on co-investment. "All of our support measures are set against company investment," he said. "So they have got to spend money to get money. None of it is on the basis of us providing them with money and they don't do anything for it, there's no handouts."

Senator Carr said the taxpayer funds could ultimately be used to help finance costs associated with additional production undertaken by the carmakers. He said that this could include contributing to the extra wage costs associated with the expanded production.

Mr Abbott told the Australian: "Mr Rudd looks like a bloke frantically running down the street after the motor manufacturers with a blank cheque in his hand," he said. "Really, it's no way to run a government. This is panicked decision-making on the run.

"We'll sit down with the motor industry and we'll discuss these things calmly like adults after the election if we win on September the seventh."

Senator Carr said if Mr Abbott went ahead with the Coalition's pledge to cut $500m in industry assistance, "the automotive industry in Australia would collapse".

"There is absolutely no doubt that General Motors would not continue its operations under Mr Abbott's stated policies," he said.

"We don't write blank cheques, nor do we give handouts."

Related news & editorials

  1. 01.03.2018
    by      In
    February proved to be another strong month for manufacturing, with the Australian Performance of Manufacturing Index continuing to show strong growth. 
    The index landed at 57.5 last month, 1.2 down from January's high: while a slight decrease, the industry continues its strong trend of growth both... Read More
  2. Lots of moneyb
    by      In
    Confidence continues to rise as Australian businesses predict healthy profits well into the year, according to illion’s latest Business Expectations Survey. The preliminary survey for the June quarter sees the Business Expectations Index rising by 31% over the previous year.
    Business confidence has... Read More
  3. Australian manufacturing
    by      In
    The inexorable rise of the Australian Performance of Manufacturing Index during 2107 has continued into the new year with production leading the way. The AI Group’s Australian PMI has come in at 58.7 in January 2018, showing an increased level of growth, and the production subindex jumped to 62.7,... Read More
  4. Belgian cement works
    by      In
    Australian technology company, Calix, has secured EUR3.4 million in working capital from Efic to build the CO2 capture facility for the Low Emissions Intensity Lime and Cement (LEILAC) project in Belgium.
    Efic, the Australian Government’s export credit agency, is a specialist financier that... Read More