UNIONS and car manufacturers have slammed a review of Australia’s car industry, saying it compromises the ability for local companies to compete with global imports.
The review, by former Victorian premier Steve Bracks, recommends a reduction in car tariffs from 10 per cent to five per cent by 2010, in defiance of widespread opposition from the industry and state governments.
It also recommends the production of more environmentally-friendly vehicles, calling for the federal government’s $500 million green car innovation fund to be brought forward to 2009.
Commenting on the Brack’s review, AMWU national secretary Dave Oliver said it made no sense and if tarrifs were reduced, this could lead to “serious trade implications”.
“The lack of tariff protection is a blow to the industry, as it puts Australia out on a limb ahead of the rest of the world,” Oliver said.
Ford Australia president Bill Osborne echoed this sentiment, saying a reduction to five per cent was a concern for the industry’s ability to compete globally.
According to Holden MD Mark Reuss, industry was already competing with manufacturers from Brazil and China whose tariffs were as high as 35 per cent.
“Australia at 10 per cent makes it tougher for local manufacturers in competing and drawing innovation and new technology to Australia,” Reuss said.
However Bracks defended the proposal, saying a key submission to the review had put a robust case for reducing tariffs.
He said modelling by the Productivity Commission showed “there was a less distorting impact on the Australian economy of transitional grants, than there was in fact in maintaining a high tariff level”.
Industry Minister Kim Carr also defended the stance saying tariffs were an “old-fashioned idea”.
Prime Minister Kevin Rudd said the review would be examined in detail before the government made any decisions.
“We take the future of our automobile industry seriously, we take the future of manufacturing industry seriously,” he said.
The report comes amid a turbulent time for Australia’s automotive industry, with more than 1100 jobs axed by Holden in Melbourne and Adelaide, 600 by Ford in Geelong and another 100 cut at Mitsubishi in Adelaide.