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Parts-makers face long wait for final PC report

Part of the problem: Parts-maker Palm Products says Holden's decision to pull-out of Australia will effect more than just the automotive industry.

Government has until August to release final car industry support report

31 Mar 2014

UPDATED: 01/04/2014CAR-PARTS makers could face months of wait before they learn the fate of billions of dollars of taxpayer support for their ailing industry.

The Productivity Commission today submitted its final report into the automotive industry to the federal government, which will now weigh up the report’s findings ahead of releasing it for public scrutiny.

However, parliament now has up to 25 (non-consecutive) sitting days to go over the details contained in the report before releasing it, meaning that the parts makers could need to wait until August 26 before seeing which way support for their businesses will skew.

The PC inquiry into taxpayer support for automotive manufacturing was launched shortly after the Abbott government took power in September last year, after Ford had announced it would quit making cars buy the end of 2016, and before Holden and Toyota announced they would quit by 2017.

In the wake of Holden and Toyota’s announcement, federal industry minister Ian Macfarlane asked the PC last month to refocus its report on the parts supply sector to keep as much of the industry afloat as possible in the wake of the car-makers’ decisions.

The Department of Industry today confirmed that it had received the PC’s final report, but refused to be drawn on when it expected the government would release the report publicly.

"The government is considering the findings and recommendations of the report and will release the report when it has finalised its response," it said.

Over the course of the last five months, the commissioners heading the inquiry have accepted 284 submissions from interested parties as diverse as car enthusiasts to the heads of multinational companies with business interests in Australia.

It has also held five separate public hearings in Melbourne and Adelaide, with former Holden managing director Mike Devereux placed under the spotlight at one of them to reveal whether a decision had been made about the car-maker’s long-term future here.

Just hours after Mr Devereux appeared before the commission, Holden’s US parent General Motors announced it was no longer viable to build cars in Australia.

Car-parts makers have had access to taxpayer-supported funding schemes such as the $3 billion Automotive Transformation Scheme, established in 2011 and designed to help car-makers and their support industries remain viable until 2020.

A question mark now hangs over the long-term support for the scheme, and some car-parts makers have warned they will struggle to remain viable if they stick to the car-makers’ timelines for quitting the industry.

Car-makers complained bitterly after the Gillard government pulled out of the $1.3 billion Green Car Innovation Fund in 2011 halfway through its decade-long term to help pay for flood damage in Queensland and Victoria.

In its pitch to the federal government to talk up its need for taxpayer support, Holden revealed that it had received about $2.1 billion in public funding since 2001.

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