Extra $200m for Australian car industry: ALP

THE ALP today commenced its election campaign by pledging $200 million in additional funding to the Australian car industry.

The new policy, tabled this morning by minister for innovation and industry Kim Carr, would also require Commonwealth fleets to buy 100 per cent Australian-made vehicles.

According to government figures, if all levels of government were to purchase only Australian-made vehicles for their fleets, annual volume would increase by 18,000 vehicles, or eight per cent.

Despite the existence of policies that require government fleet buyers to purchase locally made passenger cars where appropriate, the figure for some local and state governments is understood to be as low as 25 per cent.

“The automotive industry is vital to Australia’s economic future and we are determined to increase sales of locally made cars,” Senator Carr said.

Under the revised plan, exemptions for non-Australian cars would extend only to special fit-for-purpose vehicles, rather than general use vehicles.

Australian-made cars currently available include the Holden Cruze small-car, Holden Commodore/Caprice and Ford Falcon large-cars (the latter until 2016, when Ford closes its local factories), the Toyota Camry (including a hybrid version) and Toyota Aurion.

Also included are utility versions of both the Falcon and Commodore, plus the Ford Territory SUV.

The announcement comes weeks after the ALP caused friction with the car industry by announcing its plans to crack down on fringe benefits for novated lease and salary-packaged car buyers.

Early anecdotal evidence from dealers suggests the change to FBT laws has had a noticeable impact on new car purchases.

The Federal Chamber of Automotive Industries, meanwhile, estimates the proposed changes to the tax could impact Australian-made car sales – already at near record lows – by as much as 20 per cent.

“The motor vehicle manufacturing industry in this country provides thousands of jobs, billions of dollars in export income and investment and benefits in research and development,” Senator Carr said today.

“Our actions will provide crucial ongoing support for an industry that has been under considerable pressure with a high Australian dollar over an extended period and an increasingly competitive global market.” Senator Carr has not yet said exactly how or where the funding would be spent. More details and reaction from industry to follow later today.