Government delivers little comfort for the industry

The Abbott government is not interested in assisting a car industry that just scrapes by with taxpayer support, the parts industry was told today.

“That is not something we should be aiming for,” said Bob Baldwin, the Parliamentary Secretary assisting the Minister for Industry.

In what appeared to be a warning, if not a cold shower, for the car parts industry, Mr Baldwin stressed that the government was aiming to create a sustainable industry with a strong export element.

“We are committed and enthusiastic about a sustainable car industry and we want to give it every chance of success,” Mr Baldwin told the annual conference of the Federation of Automotive Products Manufacturers (FAPM).

“We need an industry that can successfully export and compete in international markets.”But he said it will have to stand on its own two feet.

“I will be absolutely frank with you. An industry that just scrapes by because of government support is not something that we should accept or be aiming for.”He said the industry was at the crossroads.

“It has been a part of our economy for the best part of a century, and we want it to be a part of our future.

“We appreciate its value to Australian manufacturing and the role it plays in innovation and the development and application of new technologies.

“But no matter how much support is offered, it will be wasted if the industry does not have all its own settings right.”Mr Baldwin referred to the last plan introduced by the Coalition, in 2003, when it pledged to provide $4.2billon in assistance over 10 years to 2015.

“During the development of that plan, General Motors agreed that this was a transition plan towards industry sustainability that would not require further ongoing funding beyond the 10 years, that the industry would be self sustaining.”Mr Baldwin made no comment on the significant changes to business conditions after the 2008 Global Financial Crisis, in particular the 30 per cent rise in the value of the Australian dollar.

He said the government recognised that other governments around the world offered assistance to their domestic car industries, but stressed that this alone would not guarantee a successful industry.

“Government support may well be an important factor, and we know that industries around the world are supported by their governments, but government investment should not be seen as the be-all and end-all.

“For the industry to succeed in the future, it needs to meet the demands of the market and be dynamic, innovative and drive change from within.”He said the industry had been adversely affected by some decisions by the previous government and said the Abbott government was aiming to find policies that would hold the industry in good stead for decades ahead.

“The industry has seen enough of big promises being made and later rescinded,” Mr Baldwin said.

“Think of the Green Car Innovation Fund, think removal of FBT changes.

“So we are determined to make a responsible, reasoned, decision, a decision that is based on the best advice, information and analysis possible.

“We want to arrive at the best possible policies to secure the future of the industry, not just for the next few years, but for decades to come.

“We want to make sure that any support for the industry is accountable, transparent and targeted.”And he indicated that state governments may be required to step up their involvement in the industry in future.

“There are no easy answers, but there is a genuine commitment and an enormous amount of goodwill between all parties.

“It means the Commonwealth and the states working together, hand in hand with the industry and unions. Together I know that we can find a way that is best for all Australians.”Mr Baldwin addressed the conference in place of Industry Minister Ian Macfarlane, who was unable to attend for personal reasons.