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Government supports automotive industry transition

26 August 2014

The Australian Government is continuing to work with the automotive sector on a transition plan to help workers and components suppliers to capitalise on new opportunities in a diverse range of industries and will continue to support domestic manufacturing through fleet procurement through until the end of local car production.

Minister for Industry Ian Macfarlane today released the Australian Government’s response to the Productivity Commission’s Report on the Automotive Manufacturing Industry, which has been tabled in Parliament.

“The Government is focussed on ensuring Australian automotive workers, component makers and small businesses in the manufacturing supply chain have the opportunity and support to take advantage of new jobs and new markets where Australia has an international competitive edge,” Mr Macfarlane said.

“The Government’s focus is squarely on ensuring support during the transition process is targeted and effective and that workers have the skills, training and information to help them move into new jobs.”

The Productivity Commission’s report includes a full assessment of the factors that have impacted on car manufacturing in Australia and includes nine recommendations. The Government supports, or supports in principle, the majority of the Commission’s recommendations.

“The Government will continue to support domestic car manufacturing through procurement policies, through until the closure of the last local car manufacturer at the end of 2017,” Mr Macfarlane said.

“The Government is also supporting the transition in the automotive industry with a range of measures, including the $155 million Growth Fund which is made up of five elements that are designed specifically to assist workers, businesses and local communities impacted by the decision from GM Holden and Toyota to end local manufacturing by 2017.

“The $20 million Automotive Diversification Programme is open for applications to assist suppliers to diversify into other sectors. Automotive workers will receive personalised skills assessment and assistance to identify new jobs under the $30 million Skills and Training Programme and the $60 million Next Generation Manufacturing Investment Programme is being finalised.

“The Growth Fund also includes a $15 million boost to the Automotive Industry Structural Adjustment Programme and a $30 million Regional Infrastructure Programme.

“The Australian Government is also preparing a National Industry Investment and Competitiveness Agenda, to focus on long-term issues relating to competitiveness, productivity and job opportunities in the industries of the future.”

The Automotive Transformation Scheme will continue until the end of 2017 at the level of funding set out in the Mid-Year Economic and Fiscal Outlook. This will help secure local manufacturing and give automotive businesses and workers time to adapt in the lead up to the closure of manufacturing by Ford, Holden and Toyota.

The Government notes the Productivity Commission’s recommendation to progressively relax the restriction on the importation of second hand passenger and light commercial vehicles.  This issue will be considered in detail as part of the Government’s review of the Motor Vehicle Standards Act 1989, mindful of the need to maintain the highest safeguards for consumers and the impact of any changes on the domestic car retail market.

No decision has been taken by the Australian Government to reduce these restrictions and the Government has no intention of allowing Australia to become the dumping ground for other countries’ old second hand vehicles.

Other Productivity Commission recommendations will be considered in the Australian Government’s Tax Reform White Paper.

The Commission’s comprehensive report was based on input from over 280 submissions, public hearings and individual meetings across Australia.

The Productivity Commission’s Report on the Automotive Manufacturing Industry http://www.pc.gov.au/projects/inquiry/automotive and the Government’s response http://www.industry.gov.au/Industry/Automotive/Pages/default.aspx are available online.

Media contacts: Mr Macfarlane's office 02 6277 7070