Media Release

The Coalition is committed to the car industry

Media reports today suggesting there has been a change to the Coalition’s position on assistance to the automotive industry are not correct.  Our position is clear, and has been consistent since February 2011.

The Coalition is committed to supporting a viable automotive sector in Australia for the long term. We have always worked closely with the car industry and will continue to do so.

We have consistently argued that funding to the car industry must be more accountable and sustainable – and better targeted – than it is under Labor.  As part of this approach, we would make a $500 million reduction to the Automotive Transformation Scheme. That means funding of $1 billion would remain in that scheme to 2015, and another $1 billion in the scheme from the start of 2016. 

The media assertions put to the Coalition yesterday that our two-and-a-half year old policy to reduce the ATS fund would force Holden's manufacturing out of Australia represented the first time such assertions have been made to us, and they contradict the advice we have received from the industry about that policy.

It should also be remembered – as was confirmed at a Senate Estimates hearing last week – that the level of our proposed reduction is dwarfed by the more than $640 million benefit that the industry would derive as a result of the removal of Labor’s carbon tax.

Julia Gillard and Labor have also broken another $1.4 billion worth of promises to the industry, chopped and changed policy and created enormous confusion, all whilst also dishonestly scaremongering about Coalition policies in order to deflect from their own dismal failures.  Their approach of ad-hoc bailouts has failed, with domestic production declining by one-third since the start of 2008.

This policy mess and the level of the broken promises have been so bad that they even prompted Holden’s Mike Devereux to say:

We cut a deal with the Prime Minister (back in 2008) and then midway through ... the rules of the game changed … it certainly worries a multinational parent when sovereign risk begins to be something that is bandied about in terms of doing business with Australia.[1]

The Coalition believes it is fundamentally important to ensure that taxpayers’ dollars are targeted at the long term sustainability of the car industry and used in a transparent way.

We have a long track record of working successfully with the car companies.  Under the Howard Government, we helped to deliver the sector a 22% increase in employment, a lift in productivity of 21.9% and a rise in exports of 174.7%. By contrast, under Labor, exports have dropped by 27.3%; productivity has risen by less than 2%; and 20,000 automotive jobs directly and another 60,000 indirect jobs have been lost.

If elected to office, an Abbott Government would immediately proceed with the abandoned 2008 Productivity Commission review of the industry (a review that was supported by each of the local manufacturers at the time it was announced) in order to ensure there is again a sensible, evidence-based approach to taxpayer funded subsidies as well as better funding benchmarks aimed at the long term viability of the industry.



[1] F.Anderson: ‘Holden warns on future’, Australian Financial Review, 27 June 2011, p.1.