The Victorian government has called for the current level of support to the auto sector to be maintained for the next 10 years.
AAP reports that the call was part of the government’s submission to the Productivity Commission’s public hearings into the sector, which are currently taking place in Adelaide.
Victorian Premier Denis Napthine told an Australian Industry Group lunch in Melbourne, “We have argued, and we think we have argued extremely cogently and well, that there does need to be ongoing support for the local manufacturing at current levels for the next 10 years.
“We know that we’ve got to address issues like labour costs, inflexible work practices, environmental standards, design rules, competition and constraints.”
The main purpose of the Productivity Commission’s review is to examine public funding to the car industry and decide whether it should be maintained at current levels. Without substantial funding, the industry would not be viable.
The Commission has received 60 submissions for consideration. From here, it will release an interim report on December 20 which will be followed by a full review on March 31.
Holden’s submission points out that that 19 of the G20 countries have car manufacturing industries which receive government assistance in the form of tariffs, subsidies, tax incentives, non-tariff barriers and financial grants.
According to Holden’s submission, Australia has an effective tariff of around three per cent (after FTAs are taken into account). This is low compared with other countries. The figure is 10 per cent in the EU/UK, 25 per cent in China, 100 per cent in India, and 25 per cent for pick-up trucks in the US.