The peak body representing the Australian automotive industry has urged the Federal Government to re-think its carbon tax plan and to work closer with the industry to develop revised legislation.
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The Federal Chamber of Automotive Industries (FCAI) says the initial carbon price of $23 per tonne will lead to increased costs to local automotive manufacturers of more than $30 million per year.

FCAI CEO Andrew McKellar said the Chamber supported the reduction of carbon emissions but was disappointed the government failed to ensure trade-exposed industries like automotive manufacturing were adequately compensated for increased costs.

“A cost increase of this magnitude will further undermine the competitive position of local manufacturing making it harder to secure future investment,” Mr McKellar said.“We are also concerned the future costs to the automotive industry will be even higher when proposed arrangements for the treatment of air conditioning gases are taken into account and if the economy moves to a fully traded scheme too quickly.”

He said if Australia was to maintain a diverse economy with a high-tech automotive industry, it needed to secure ongoing investment in future design, engineering and production programs.

“Australia needs to take an internationally competitive approach to policy that supports industry and government co-investment and not penalise companies that invest in automotive capability in this country,” Mr McKellar said.“We urge the Government to re-think its approach and to work with industry to ensure these concerns can be addressed before legislation is finalised.”

Earlier this week, we reported on Holden’s initial reaction to the carbon tax.

For more information about the carbon tax and its impact on Australian motorists, have a read of our editorial.