New scheme to breathe new life into automotive industry

By Senator Kim Carr
Minister for Innovation, Industry, Science and Research and Industry

The Automotive Transformation Scheme is the centrepiece of the Government’s New Car Plan for a Greener Future.

Worth $3.4 billion over 10 years, the ATS will revolutionise an industry that is critical to Australian employment, skills, innovation and exports.

Car-making is the cornerstone of Australian manufacturing. It directly employs 52,000 people.

Despite the effects of the global economic downturn, it is also one of Australia’s great international success stories, with exports worth $5.8 billion last year.

The new scheme will replace the Automotive Competitiveness and Investment Scheme from January 1, 2011.

It will promote the innovation needed to make the Australian automotive industry economically and environmentally sustainable by increasing support for strategic investment in research and development, plant and equipment, and the production of motor vehicles.

The industry must innovate if it is to improve its productivity, build competitive advantage and adapt to present and future challenges – including changing consumer preferences, climate change, and the radical reorganisation of the industry worldwide triggered by the global recession.

Participants in the ATS will be required to demonstrate their commitment to improving environmental outcomes – not least by developing vehicles with lower fuel consumption and lower greenhouse gas emissions.

Participants will also be required to demonstrate their commitment to boosting workforce skills and capabilities.

We cannot create a world-class automotive industry without skilled people – and that means everywhere, from the boardroom to the factory floor.

The Automotive Transformation Scheme Bill 2009 and the ACIS Administration Amendment Bill 2009 were introduced into the House of Representatives on 24 June.

The first establishes a framework for the ATS, with administrative detail to be set out in regulations and guidelines. The second provides for a smooth transition to the new scheme by repealing Stage 3 of the Automotive Competitiveness and Investment Scheme and increasing uncapped assistance for motor vehicle producers registered under ACIS in 2010.

‘The Council has been established to promote new ideas and continuous improvement’

Debate on the Bills has been deferred until Parliament resumes in spring.

In the meantime, other elements of A New Car Plan for a Greener Future are firmly in place.

The Government made a special call on the $1.3 billion Green Car Innovation Fund in 2008 to bring production of Toyota’s hybrid Camry and a new four-cylinder Holden to this country.

Since April 24 this year, the fund has been open for general applications from businesses and researchers looking to design and develop environmentally friendly vehicle technologies in Australia.

The Automotive Industry Innovation Council has been established to promote new ideas and continuous improvement.

It brings together car and component makers, unions, researchers and government agencies.

The council met for the first time in January, and it is now mapping out strategies to secure the local industry’s place in the new world automotive order.

That won’t happen unless we strengthen the supply chain – you cannot have a viable car industry without capable and innovative component makers and service providers.

The Automotive Supply Chain Development Program will improve capabilities and help firms gain entry to complex national and global supply chains. Guidelines for the program will be finalised soon.

The Automotive Industry Structural Adjustment Program is helping component companies achieve critical mass by merging and reorganising. It is also providing training and other assistance to displaced workers.

The acquisition of Geelong automotive glass maker CSR Viridian by MH Group and the reorganisation of ACL Bearings in Launceston were both facilitated by this program.

The Australian car industry has been reinventing itself at least since the 1980s, and the Australian Government is confident that it can do so again.

We are actively supporting the latest phase of transformation and renewal because we understand what the industry means to Australia. It provides critical production and innovation capacity.

It can help us make the transition to a low-carbon future. And it underpins the economic wellbeing of families and communities right around the country.