Carbon tax will kill automotive manufacturing in Australia

Australia’s manufacturing industry will not survive Gillard’s carbon tax, and companies will move offshore to countries where they don’t have to pay it.

Since Gillard announced she planned to instate a carbon tax by July 2012, the manufacturing industry has been up in arms — especially the automotive manufacturing sector which is already frought with worries.

The Government recognises our automotive market is in trouble, which is why it began grants for greener, smaller cars last year. However facing devastated Queensland and far north New South Wales after the recent floods, the authorities decided to scrap the Green Car Fund because they could no longer afford it, stealing $429 million of grants promised to automotive manufacturers in Australia.

There is no doubt about it: a carbon tax will cripple our already disabled automotive market.

An opinion piece from The Herald Sun said that Holden’s pride at the roll-out of the Cruze last week – Australia’s only locally-made small car which was manufactured off the back of a $180 million cheque from the Government – will be short-lived, with the carbon tax forcing manufacturers to relocate to cheaper-labour countries whose Governments don’t force them to pay a price simply for taking up a large footprint.

“Four days after announcing a tax that will finish off what is left of manufacturing in Australia, the PM goes to the very heart of the iconic industry that is teetering on the cliff edge,” the article’s author.

“Not to commiserate or to explain her mea culpa for its coming demise when she personally gives it that ‘push’.

“But to gloat at a new project, which has only got off the ground thanks to $180 million of taxpayer money and cannot possibly survive her tax.”

According to the article, Australia’s automotive industry was already in trouble before the tax was announced, and automotive manufacturing will not survive if Gillard’s plans go ahead.

“The only way any domestic manufacturing is — was — going to survive is to put all the makers together in one production line,” said the article.

“And that was before a carbon tax. After it? Fuggetaboutit.”

Manufacturers’ Monthly reported earlier in the week that despite vowing before she won last year’s election that there would be no carbon tax, Prime Minister Julia Gillard has now decided that a tax, kicking-off in June 2012, will be instated over three to five years, after which an emissions trading scheme (ETS) will be instated.

Gillard told Channel 9 that her change of heart was due to ‘changing circumstances’. One wonders if these changing circumstances are to do with her now being in bed with The Greens, having joined forces with them to form a minority government after a hung parliament.

Image courtesy of The Herald Sun, shows Holden CEO Mike Deveraux.

What is the carbon tax going to do to your business? Comment below, on on Twitter @manmonthly.


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