General Motors Holden has revealed that it has received $2.2 billion in federal government assistance over the last 12 years, which the company claims represents good value for money.
The figure was disclosed by Holden following its dispute with the Australian Financial Review . Holden took the newspaper to court last year to keep details related to government assistance – which the industry department accidentally released – from being published.
“For the $150 million a year you get $2.7 billion of economic activity generated by having Holden make things in this country. It is 18 times the investment,” Holden’s chairman Mike Devereux told the AFR, releasing a detailed financial review to promote transparency.
“Then the country just has to decide whether it can afford to, or want to, invest in this individual industry in a distinct way or whether it wants to let the industry not make cars here,” said Devereux, who pointed to the economic gains promoted by the assistance.
“Without an industry . . . you would lose around $2 billion to $3 billion a year, times whatever Ford and Toyota also do. But I can’t speak for what their numbers are.”
Free market advocates and the opposition have been critical of subsidies to auto manufacturers.
Last November, opposition treasurer Joe Hockey used redundancies at Ford, which also receives federal assistance, to claim that protectionism has been a failure.
Simon Cowan, a research fellow at the Centre for Independent Studies, told the AFR that government had no business protecting industry.
“The role of government is not to create work and support particular businesses,” said Cowan.
“[It is] to provide essential services to the community.”
Elsewhere, Holden director of government affairs Matt Hobbs defended the assistance.
"We've received $1.8 billion worth of incentives – both duty reductions and cash – over the last 12 years, and that's allowed us to undertake automotive manufacturing in Australia and spend over $32.7 billion, and $21 billion of that in the supply of those," he told ABC’s AM.