Politicians miss point on true cost of carbon tax

TOYOTA has reaffirmed that the extra cost the carbon tax places on its Australian manufacturing operations is around $115 per car, debunking ongoing assertions from both sides of federal politics that put the impost as low as $50 a car from Labor’s point of view and more than $400 a car from the Coalition camp.

Federal minister for climate change, industry and innovation, Greg Combet, accused opposition leader Tony Abbott in parliament this week of “deliberately misleading the Australian public and the auto manufacturing workforce” by quoting the $400 figure, when “the fact is that the carbon price impact on car manufacturers is about $50 a car”.

The $50 figure is drawn from figures released late last month by federal climate change officials, based on direct emissions.

In response, shadow industry minister Sophie Mirabella said Labor’s “desperate attempts to hide the impact of the carbon tax on producing Australian-made cars” had been discredited in a Senate Estimates hearing in Canberra this week, arguing that the $50 calculation only includes “direct costs that the automotive manufacturers pay and does not include the carbon tax cost on the supply chain”.

Yet Toyota Australia has this week confirmed to GoAuto that its previously stated figure of approximately $115 per car still applied.

The company’s media and external affairs manager Beck Angel said: “Currently the carbon tax adds approximately $115 to the cost of each locally built vehicle.” This is consistent with its calculations in 2011 that found the carbon tax would add $112 to the cost of each locally built Camry or Aurion.

Ford and Holden have not specified figures, but Toyota’s calculation was $38 below the estimate of the peak industry body, the Federal Chamber of Automotive Industries (FCAI), which set the burden at $150 a vehicle, for a total $30 million bill across the local auto manufacturing industry.

Significantly, the federal Coalition is relying on an earlier report by PricewaterhouseCoopers Australia – which was commissioned by the FCAI and the Federation of Automotive Products Manufacturers (FAPM) – that placed the figure at between $220 and $412 per vehicle, based on a carbon price of $20-$30 a tonne.

“Toyota Australia supports action on climate change,” Ms Angel said.

“We are always looking at new ways to reduce our carbon footprint, lower our overall costs and encourage our supplier base to do the same.

“Both the government and opposition have stated that they are supportive of local automotive manufacturing. We would oppose any change to automotive industry policy settings or funding without an appropriate review first being urgently undertaken.

“We will continue to work constructively with government to develop globally competitive, long-term and consistent policies to ensure we continue building cars in Australia.” Mr Combet accused Mr Abbott in parliament this week of “blaming everything on carbon pricing” – including Ford’s decision to cease manufacturing in 2016.

“It is important to rely upon accurate information when considering the challenges facing industries like manufacturing, otherwise policy responses will not have a proper foundation,” he said.

“If you took the approach of the Opposition leader to policy development, you would be in all sorts of trouble because he blames everything on carbon pricing. It is responsible for every problem in the country. Over the weekend he once again blamed carbon pricing for Ford's decision to cease manufacturing in 2016 and he once again wrongly and falsely claimed that carbon pricing added $400 to the cost of a car.

“That is a totally false and mendacious claim that has been disproven on numerous occasions. It relies upon speculation from early in 2011 before the government even announced the carbon price policy. It assumes a carbon price significantly higher than the actual price that is in the market.

“It assumes there is no assistance to industries like steel and glass, that there is no assistance to industries, and all of his assumptions, of course, are wrong. The opposition leader knows it.

“The fact is that the carbon price impact on car manufacturers is about $50 a car, not $400 a car as he falsely claimed.

“If you compare it to the appreciation in the Australian dollar of just one cent, 1c appreciation equates to about a $250 impact on the competitiveness of an Australian car. So every time the opposition leader repeats this $400 figure he is deliberately misleading the Australian public and the auto manufacturing workforce.” In turn, Ms Mirabella said the federal government’s $50-per-car carbon tax claims “were designed to undermine the PricewaterhouseCoopers analysis relied up on by the Coalition”.

“There is no direct carbon tax assistance for car and vehicle component manufacturers in Australia – a point that destroys the main plank of the government’s efforts to discredit the PwC analysis,” she said.

“And the government has simply made its own back-of-the-envelope calculations and has not relied upon, or sought any, external analysis to verify its figures at any time.” Ford Australia public affairs director Sinead Phipps said the car-maker did not discuss how much the carbon tax was costing it.

“We don’t talk about that side of thing publicly,” she said. “We normally don't go into that level of detail about our business.” Holden is yet to respond to GoAuto’s request for figures on the additional cost per vehicle as a result of the carbon tax.