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Gillard defends car industry

Value: Public sector spending on the automotive sector - such as the recent $34 million injection into Ford's Broadmeadows plant - is modest by global standards, according to PM Julia Gillard.

Government reveals Australia’s “very small” level of local auto industry subsidies

Ford logo18 Jan 2012

PRIME Minister Julia Gillard yesterday defended the automotive industry, as government figures revealed for the first time comparative levels of support for car manufacturing around the world.

The PM said public funding for the industry – such as the $34 million granted to secure manufacturing at Ford’s Broadmeadows plant to 2016 – was a modest investment in a vital sector of the Australian economy.

Government figures indicate that Australian taxpayers contribute considerably less to its car industry than those in other developed countries, including Germany, France and the United Kingdom.

Manufacturing minister Kim Carr said local investment represents only $17.80 per taxpayer compared with $27 in the United Kingdom and some $264 in the United States.

He said every government around the world supports its local car industry and that in Australia it is “very small by international standards”.

After touring the Broadmeadows plant, the Prime Minister told journalists that 230,000 jobs depended on vehicle manufacturing – on top of the 46,000 people working directly in the car industry.

 center imageLeft: Prime minister Julia Gillard. Below: Manufacturing minister Kim Carr.

Ms Gillard said that, while the local economy is running strongly due to mining, she was determined that Australia should emerge from the resources boom with a diversified economy that includes manufacturing.

“We are optimistic about the future of manufacturing,” she said.

“That means we’ve got to make the right decisions now, and the right decisions to support the industry during this phase of economic change in our country.

“We’ve got the resources boom, we’ve got a high Aussie dollar, we’ve got competition for capital and for labour, and so we will be supporting Australian jobs during this period because I want us to come through this period of economic change with a diversified economy, with many sources of strength, including manufacturing.

“That means we need to work with companies to ensure that there is investment here, and there is a future here.

“The skills and capabilities that come out of manufacturing automobiles flow through to the rest of manufacturing, so a vibrant car industry is so important to the future of manufacturing generally.

“Because of the importance of the car industry, during the global financial crisis we worked hard to make sure that we would still have a car industry in this country and we do.

“Now, we are in a time of economic transformation and change in Australia, we are going through a spectacular resources boom. That brings great benefits, but it also means our Australian dollar is very high and (that) can put pressure on other industries, including manufacturing.

“I’m very determined as Prime Minister, as we go through this period of economic change, that we emerge with a diversified economy with many sources of strength, including manufacturing.

“I don’t want to see the resources boom hollow out other parts of the Australian economy.

“That is why we are working with the car industry to make sure we hold these jobs and these skills and capabilities in Australia.

“We continue to have discussions with Ford about the future of car manufacturing by Ford in Australia, and at the same time we are continuing to work with the rest of the car industry.”

Senator Carr said that one million Australians are employed in some form of manufacturing and that the automotive industry is the foundation stone of manufacturing.

He said that, at only $17.80 per taxpayer, the Australian government’s level of support for the car industry was very low compared with Canada ($96.39), France ($147.38), Germany ($90.37), Sweden ($334) and the UK ($27), let alone “the great home of free enterprise”, the US ($264).

“Nowhere in the world – nowhere – does the automotive industry survive without substantial co-investment by the governments,” said Senator Carr.

“The governments of these countries around the world value the investment, value the jobs, value the huge benefits that come from research and development, from exports, value the services that are generated.

“In Australia, though, our investment with the automotive industry is very small, very small by international standards, and the recent reports indicate that for Australia it’s less than the price of a football ticket.

“We have the capacity in this country to be able to be part of a great global industry and to remain part of it, but it requires investment, new investment.

“It needs constant attention. It’s not a set-and-forget policy area. It’s an area which we must work closely with everyone involved to maintain our international competitiveness.”

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