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Conomos calls for federal policy consistency

Left: Bill Malkoutzis, president of the SAE-A: Right: John Conomos, Australian Automotive Envoy.

Industry expert urges both sides of federal politics not to tamper with auto policy

4 Jun 2013

AUSTRALIAN automotive industry heavyweight John Conomos has warned both sides of politics that federal car industry policy must remain consistent until at least the end of the decade to ensure ongoing investment from Australia’s remaining car-makers.

In an exclusive interview with GoAuto, the former Toyota Australia executive chairman and current Australian auto industry ambassador said the overseas head offices of Toyota and Holden were watching the policy scene in Australia “carefully”.

Mr Conomos said it was essential to retain a sense of certainty in the policy framework, meaning no post-election changes in 2014 that could damage current plans for new-generation models from both car-makers toward the end of this decade.

The current Automotive Transformation Scheme (ATS) is set to run until 2020.

“What overseas companies do not like is substantive changes midway through a term,” said Mr Conomos.

“It’s my belief the car industry needs a 10-year certainty period. Every 10 years there should be policy guidelines established and adhered to.” Speaking to us after addressing the annual networking dinner of the Society of Automotive Engineers – Australasia last week, Mr Conomos voiced concern over federal opposition leader Tony Abbott’s promise to cut $500 million from the ATS in the period to 2015 should the Coalition win government at the September general election.

Furthermore, Mr Abbott has vowed, if elected, to commission a new review of the car industry by the Productivity Commission.

Mr Conomos also highlighted the Gillard government’s decision in 2011 to dump the Green Car Innovation Fund, with Labor siphoning off $429 million earmarked for the car industry to pay for Queensland flood recovery.

He said that while the floods were devastating, the decision was an example of letting external factors influence industry policy.

“Frankly speaking, if you are an overseas operator and you saw floods in Queensland, you would ask why should rains in Queensland alter an automotive policy?” he said.

“The point about that is that the government chose to do that, in their wisdom, and I’m not criticising that, but I am thinking from an overseas manufacturer’s point of view.

“They don’t understand how floods in Queensland can change manufacturing policy in Australia.

“These things need to be understood in Canberra. Therefore, any future government needs to understand: make a policy in a consensus formed manner and stick to it for 10 years.

“Do not change it.” Mr Conomos said any new policy formulated by an Abbott government, if elected, should be consistent with current policy and that any significant changes should be carefully analysed before implementation.

He said policies should be drawn up after consultation with all the stakeholders: unions, investors and parent companies, and should take into account the long-term views and global master plans of the car-makers involved.

“The shouldn’t take an Australian view only – they should take a perspective of Australia becoming increasingly more a significant player in the global sense,” he said. “Therefore, we should find a way, through the Productivity Commission, to improve Australia’s productivity as a niche player, stabilise the local industry and then support it to a point where it becomes substantially self-sustaining.

“The next model changes, of both Holden and Toyota, will be a pointer to that outcome, so we shouldn’t make any significant changes which will damage those plans, which are well cemented for those important platform changes around 2017.” His underlying message: “Don’t change the policy in 2014.” According to Mr Conomos, federal policy consistency was the big breakthrough achieved when the late Senator John Button established the Button Plan in the 1980s, resulting in policies being put in place for protracted periods.

Before that, governments had changed their car industry plans on an erratic basis.

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