Labor plans to subsidise car parts makers beyond 2017

A future Labor Government would seek to continue funding to car component makers even after 2017, when local car making has ended.

The Australian reports that Opposition industry spokesman Kim Carr will tell the Australian Automotive National Summit in Canberra today that Labor would modify the existing Automotive Transformation Scheme and continue to run it until 2021.

The changed scheme would provide funding to Australian-based component-makers and suppliers.

As it stands, the scheme will cease by the end of 2017 when Ford, Holden and Toyota have all stopped making cars in this country.

In his address today Senator Carr will say that component makers will need support if they are to innovate and survive.

 “That is what will attract new investment to the industry, and … if we can do that the industry has an assured future,” he will say. “If new investment can be attracted while existing capabilities are preserved, there is every reason that the industry should not only survive, but rebuild.”

AAP reports that in an address to the summit yesterday, Treasurer Joe Hockey said the three respective Free Trade Agreements Australia has with China, Japan, and South Korea will help Australia’s car component sector.

The FTA with South Korea has eliminated the eight per cent tax on Australia's auto part exports, while the FTA with China means the 10 per cent tax on car engines will be removed within four years and other tariffs of up to 25 per cent on other parts will also go.

And the FTA with Japan ensures duty-free access for auto parts will continue.