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by Tim Beissmann

Prime Minister Kevin Rudd has pledged half a billion dollars for Australia’s automotive manufacturing industry in an attempt to give investment certainty to local car makers and shore up their future beyond 2020.

Under the ‘New Car Plan for the 2020s’, the Federal Labor Government – if re-elected – will increase funding to $300 million per year between 2016 and 2020, equating to an additional $500 million for the industry by the end of the decade.

Rudd says additional support will be ongoing past 2020 and will be reviewed every five years, and insists the plan will be locked in by legislation to give confidence to Australia’s local car makers and their parent companies.

The New Car Plan will see the government provide support to motor vehicle producers and the automotive supply chain, including component producers and service providers; devise co-investment programs for automotive production, plant and equipment, tooling, innovation and design, and engineering services; and have the specific legislative objective of integrating the automotive supply chain into local and global non-automotive markets.

2012 Toyota Camry Atara S

Rudd says Australia is entering tougher economic times as the China resources boom comes to an end, which he believes means manufacturing is now “more important than ever”.

“We must diversify our economy beyond the mining sector so we don’t have all our eggs in one basket,” Rudd said.

“A successful automotive industry creates skilled jobs, drives high-level research and development, and supports other technologically sophisticated industries.

“Australia’s car industry directly employs around 50,000 people, makes the largest research and development investment in the manufacturing sector and supports an extensive supply chain of component producers.”

Rudd says the New Car Plan for the 2020s will be funded from within the existing funding allocation and no new funds will be required until 2018.

The funding comes on top of another $200 million promised by the government to the industry announced earlier this month, which is intended to ease the pain of its proposed changes to fringe benefits tax (FBT) rules.

If elected, the Coalition plans to cut $500 million in support for the automotive industry to 2015, and will hold a productivity commission review to decide its funding strategy for the future. Tony Abbott says a Coalition Government would not make any changes to the current FBT system.

Holden chairman and managing director Mike Devereux says the company will wait for the September 7 election result before announcing its manufacturing plans.

Holden workers recently agreed to revised employment conditions including a three-year pay freeze designed to help protect its local car making future.




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