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Abbott aims to eliminate auto industry handouts
Big rig: Tony Abbott launches Coalition’s manufacturing policy at Volvo Group Australia’s Wacol truck assembly plant in Brisbane.
Coalition leader uses local truck factory as example of subsidy-free auto industry
23 August 2013
FEDERAL opposition leader Tony Abbott this week revealed
in no uncertain terms his desire for Australia’s automotive industry to operate
without government assistance.
Releasing the Coalition’s manufacturing policy at Volvo Group Australia’s
factory in Brisbane on Wednesday, Mr Abbott highlighted the trucking group’s
operations – which include building Mack and Volvo trucks at the Wacol assembly
plant – as proof that vehicle manufacturers could be profitable without
When asked whether he was prepared to let Holden and Toyota follow Ford in
closing down their car-making operations in Australia, Mr Abbott said he would
“cross those bridges if and when we get there”.
He added that he was happy to “talk through things” with Holden, whose
manufacturing future hinges on the outcome of negotiations with the winner of
the September 7 federal election, but declared he was only interested in having
“an adult discussion” based on the value the nation would receive in return for
more taxpayer funding.
“I’m very pleased to be here at Volvo today because this is proof that we can
make things, make sophisticated things in this country without a government
subsidy,” Mr Abbott said.
“We can make sophisticated things in this country without a government subsidy
and do so profitably and export from this plant.
“This plant proves that you do not need to write blank cheques for businesses
in order to have a strong and dynamic manufacturing sector in this country.
“If we get the economic fundamentals right, then we give our businesses
generally including our manufacturers the best opportunity to invest, to
employ, to compete, to innovate and to succeed.
“So that’s why at the core of our policy for manufacturing industry is to
abolish the carbon tax, abolish the mining tax, get the workplace relations
pendulum back to the sensible centre, to cut red tape and generally work with
the businesses of Australia rather than against them,” he said.
As previously reported, Mr Abbott has pledged to cut $500 million from the
Automotive Transformation Scheme if elected, and to “immediately proceed” with
a Productivity Commission review of the car industry “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
Asked specifically this week whether he would be prepared to let Holden and
Toyota close down their manufacturing operations in Australia, as Ford has
announced it will do from 2016, Mr Abbott said: “Let’s cross those bridges if
and when we get there, but this plan here is an example of a sophisticated plan
in the motor manufacturing industry that does not require government handouts.
“It is possible to do sophisticated motor manufacturing in this country without
a government handout. Volvo and Kenworth down in Melbourne prove that.
“Now, let’s talk about the car-making industry for a moment. I want to see
car-making survive in this country, not just survive but flourish. I want to do
what I can to make it flourish.
“We’ll get rid of the carbon tax obviously that will reduce the cost of
producing a car here in Australia by an estimated $400 a vehicle. We will make
various changes to the regulatory environment which will help as well, but we
will maintain a strong program of assistance to the car industry.
“What we aren’t going to do is what Mr Rudd has done over the last few weeks
and basically run down the road after Holden waiving a blank cheque at them.
Now, we’re just not going to do that because that’s not a sensible way for an
adult government to behave.
“We’re happy to sit down with them. If they want to sit down with us to talk
through things and from our point of view, we’ll say we need to get value for
taxpayers’ dollar and that means doing what you reasonably can to be as
competitive as you possibly can be and doing what you should to ensure that the
volumes of your plants move up and that means an export program.
Left: Opposition leader Tony Abbott addresses Volvo
“Toyota have got a strong export program. Holden have
certainly moved in that
direction. Unfortunately, Ford never really did and that’s one of the reasons
why Ford are now on the way out of manufacturing in this country.”
Holden is waiting until after the election to resume negotiations with the
federal government over its future as a car manufacturer in Australia.
Asked whether he was prepared to risk Holden’s future based on his comments
that “we’ll cross that bridge when we come to it”, Mr Abbott said “we want
Holden to survive”.
“We have a good record when it comes to working with the car manufacturers to
help them, not just to survive, but to flourish and we will act in that same
spirit in the future,” he said.
And responding to a question about the long-term ramifications for the nation
if companies like Holden and Toyota close their factories, Mr Abbott said:
“Obviously it would be a pity and we don’t want to see it – we really don’t
want to see it, but no adult prime minister in the heat of an election
campaign, in panic over polls, charges down the street waving a blank cheque
“You just don’t do that. So, if the motor manufacturers want to come to us
after the election, obviously they can and we will sit down and we will have an
adult discussion with them about trying to ensure that those industries have a
strong future, because that’s what all of us want.”
Shadow industry minister Sophie Mirabella added that “it’s not just about the
amount of money; it is about ensuring that the rules and benchmarks for funding
the car sector are sustainable and aimed at long-term viability of the sector”.
In his manufacturing policy released this week, Mr Abbott vowed to: appoint a
minister for trade and investment “whose central responsibility will be to
attract trade and increase inwards investment into Australia”; build Australia’
s manufacturing export base by progressively restoring funding to ‘Export
Market Development Grants’ starting with an initial $50 million boost;
establish a $50 million ‘Manufacturing Transition Fund’ designed “to provide
assistance to communities and industries as they transition to new areas of
manufacturing growth”; and implement industry-specific ‘Strategic Growth Action
Agendas’ that bring industry and government together “to develop strategic,
co-ordinated and long-term plans for growth and viability”.
Prime minister Kevin Rudd announced last weekend that the government would tip
an extra $500 million into Australia’s automotive industry if returned after
another election due in 2016, with commitments of $300 million a year from 2020.
Earlier this month, Labor pledged another $200 million in unspecified funding
to help boost sales of Australian-made vehicles.
This came after widespread criticism from the industry after the government
announced proposed changes to fringe benefits tax rules, which would remove the
20 per cent statutory formula method for salary-sacrificed and
This is designed to save taxpayers up to $1.8 billion, helping pay for the
government’s early move to an emissions trading scheme, but in recent weeks has
seen a large number of jobs axed in the industry and scores of vehicle orders
“The choice for anyone who cares about the future of the Australian-made car
and Australian manufacturing jobs is clear,” Mr Rudd said at the announcement
of Labor’s new policy on August 17, surrounded by Holden workers and union
members at the Salisbury North Community Club in Adelaide.
“Under Federal Labor’s ‘New Car Plan for the 2020s’, the automotive industry
will make a vital contribution to our economy after the China resources boom.
It will make 250,000 direct and indirect jobs more secure.
“Under the Coalition’s cuts, the Australian-made car will be relegated to the
history books and 250,000 Australian jobs will be at risk, with 50,000 certain
“The New Car Plan for the 2020s will be funded from within the existing funding
allocation and no new funds will be required for the program until 2018.”