Holden managing director and President of the Federal Chamber of Automotive Industries, Mike Devereux, says the carbon tax is a ‘heavy and unfair cost’ for local automotive players, and policy consistency is needed to secure the sector’s future.
“For the industry, we estimate that between 30 to 50 million dollars a year in increased costs will have to flow into the local industry,” said Devereux at the National Press Club this week.
“Whether or not we are able to recoup what is really a tax on just the locally-made vehicles. Because, if you think about it, the 85% of the vehicles that are imported (to Australia), they don’t have any carbon tax associated with them – a carbon tax will add cost which is a different path I think for Australia.”
According to a press release from shadow innovation and industry minister, Sophie Mirabella, it is crucial that manufacturers – including those in the automotive sector – enjoy policy consistency and reliability.
“Industry needs policy certainty and consistency and a genuine understanding of the factors that affect investment,” she said.
“It’s clear the car industry has not received this from the Gillard Government with its series of sudden back flips and broken promises. And now its desire to impose a carbon tax will only add to already intense competitive pressures.”
For Devereux, the carbon tax adds to wider uncertainty about Australia’s manufacturing future, which is a big problem for companies wanting to invest.
“It was a blow when the Green Car Fund was taken away. What happened is a long-term plan was changed and in our industry, our cycles for investment and product development if I’m looking five or six years out, I have to make decisions now about what to build and where to build it,” he said.
“You need that consistency and certainty over time, no matter what the policies are. In the past, Australia has had very contemporary intelligent policies in terms of support to the auto industry.”
Devereux is a member of the Prime Minister’s Manufacturing Taskforce, which held its first meeting in Canberra on 30 November.
The Taskforce was setup to find solutions to support manufacturing jobs and investment in the future.