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Coalition’s 11th-hour industry policy

Alternative policy: Shadow treasurer Andrew Robb and industry spokesperson Sophie Mirabella.

Car industry plans to be spelled out by Liberals four days before the election

General News logo17 Aug 2010

THE federal coalition has delayed the release of its industry policy – and its intentions towards the car industry – until tomorrow, in the final week of the election campaign.

However, shadow finance minister Andrew Robb has renewed the attack on the Gillard government’s Clean Car Rebate scheme, which he describes as “pink batts on wheels”.

Last weekend, Mr Robb said federal treasury estimated about 165,000 of the 200,000 vehicles to be subsidised under the scheme would be sold anyway, even if the buyers did not receive a $2000 grant.

“The subsidy to people who will buy cars regardless would cost at least $330 million on Labor’s shonky figures alone,” Mr Robb said.

“This is a wasteful and ill-conceived scheme that is open to rorting that will blow out in cost to $1 billion, as indicated by Kim Carr.”

The Gillard scrappage scheme will be available to people who trade-in a car made before January 1995 and which has been registered for the 24 months before the purchase of a new car.

They must buy a non-luxury car that has a Green Vehicle Guide rating of at least six stars (equivalent to 220g/km of CO2). The government has capped the scheme at 200,000 vehicles and costed it at $394 million.

The Gillard government’s second cut of $200 million from the GCIF means that a total of around $590 million now remains uncommitted for the rest of the program.

As GoAuto has reported, a Tony Abbott-led coalition government would cut GCIF spending by $278 million over the life of the program, with shadow industry minister Sophie Mirabella announcing the policy soon after the government made its first cut of $200 million in the 2010/11 budget.

A spokesman for Mrs Mirabella told GoAuto the $278 million figure was decided in a line-by-line review of specific programs under the policy.

Until the Opposition releases its industry policy, it will not be clear whether deeper cuts would be made under a coalition government.

The decision by the coalition to leave the unveiling of its industry policy until the last week of the campaign gives the car industry little time to digest any changes in policy settings and the potential impact on investment.

A spokesman for Mrs Mirabella this week repeated the coalition’s position that too much money had been put into the GCIF in the first place.

“Labor has itself made that admission when it cut the funds in the last budget,” the spokesman said.

“We have consistently said that some of the money that has been devoted to the fund could be used more sensibly.”

Ms Mirabella said in her post-budget press release that Labor had recognised the GCIF had flaws when it cut the first $200 million from the program.

“The Australian automotive industry has received bi-partisan support from governments over many decades – but the seemingly open-ended and poorly targeted spending that is currently at the heart of this program is unacceptable,” she said.

Projects funded under the GCIF so far include the Camry Hybrid ($35 million), Holden Cruze ($149 million) and a four-cylinder engine for Ford’s Falcon ($42 million).

Last week almost $1 million was advanced to Brisbane’s Century Yuasa to help the company bring a more environmentally friendly starter battery to market.

The GCIF is part of the government’s overarching policy for the car industry, which was based on the review of the industry by former Victorian premier Steve Bracks.

The 13-year New Car Plan for a Greener Future will provide up to $6.2 billion in local car industry investment.

It is not known if a coalition government would seek to curtail the overall plan, as well as the GCIF.

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