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Automotive scheme still attracting investment

Questions please: Senator Kim Carr has questioned a senate estimates hearing by the Economic Legislation Committee about three new proposals for funding under the Automotive Transformation Scheme.

Three new expressions of interest despite $500 million cut from support scheme

31 Oct 2014

THE federal government has received three new expressions of interest from entities looking to join the Australian automotive industry, after the government introduced legislation to cancel the Automotive Transformation Scheme (ATS).

There is still more than $1 billion available under the ATS, despite the Abbott government’s decision to cut $500 million from the scheme between 2015 and 2017 in a bid to balance its budget.

The news that three new expressions of interest had been received was revealed during questioning by former industry minister Kim Carr in a senate estimates hearing by the Economic Legislation Committee.

“I am aware of at least three bodies that have some interest in exploring options,” said Mark Durrant, general manager of the advanced manufacturing policy branch in the department of industry.

“Those proposals – I wouldn’t even say they were proposals – are concepts at this stage,” Mr Durrant said.

Senator Carr’s questioning revealed that the concepts would not be able to obtain assistance under the Act for any feasibility study that might be required.

“Is there room to assist with feasibility studies within the current funding envelopes?” Senator Carr asked.

“I am not aware of any Government programs that go to feasibility studies,” Mr Durant said.

He confirmed that the Government would have to make a deliberate decision to support a request for help with a feasibility study.

Mr Durrant confirmed there had been a sharp drop in the number of companies registered to participate in the Automotive Transformation Scheme.

He said there had been 150 companies registered in April 2013, before Ford announced it would cease manufacturing in October 2016.

There are now 128, he told the committee.

Mr Durrant said many of the companies no longer registered with the ATS were still making automotive components, while more than half had diversified into other sectors.

“If we look at those 22 that we identified as no longer registered for the scheme, four of those have merged and are still doing automotive.

“Five of them have closed, but the remainder have continued to manufacture – maybe with a small amount of automotive – but have diversified into other areas,” Mr Durrant told the committee.

“That is 13 that I know of that have diversified,” he said.

In answer to Senator Carr, Mr Durrant said the department had formed a view as to how many parts makers were likely to survive to 2018.

However, he was unable to divulge that information as it was advice to the minister, Ian Macfarlane.

Mr Durrant, however, was confident that the three car-makers, Ford, GM Holden and Toyota would continue to produce until the announced dates for closure of their operations.

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