A year on: Tony Abbott’s auto industry promise in tatters

One year ago today Tony Abbott made a solemn promise to Australia’s automotive manufacturers. 

I want to see car-making survive in this country, not just survive but flourish.


 What a difference a year makes.

As with so many other broken promises – no cuts to health, no cuts to education, no changes to pensions – this pre-election promise did not last the distance.

Far from helping the industry to flourish, in one short year the Abbott Government has managed to goad GM Holden to cease manufacturing in Australia, which has led to a devastating ripple effect throughout the automotive manufacturing supply chain that will be felt for generations to come.

Instead of keeping his promise to the 200,000 Australians who depend on the automotive industry, Tony Abbott and his Government embarked on a reckless and deliberate campaign to undermine the industry.

-          First, they played chicken with the automotive companies and tried to cover their inaction by announcing a Productivity Commission review in October 2013, when they knew full well car makers needed a commitment before Christmas to maintain their operations.

-          Second, they ripped $500 million from assistance for the automotive industry in the December 2013 MYEFO.

-          Then they refused to commit to Labor’s co-investment plan, which would have kept Holden in Australia until 2025 for less than $150 million in government co-investment per annum.

-          Next, they undertook an extraordinary backgrounding campaign in the media, attacking GM Holden, and goading the company to shut up shop in Australia.

-          In the May Budget, the Abbott Government ripped another $400 million from the Automotive Transformation Scheme, bringing total cuts to a staggering $900 million. On top of that, they cut $5.1 million from vital skills and training programs for auto workers.

So much for helping the auto industry to “not just survive but flourish”.

Now that the damage has been done, the Government’s response has been slow and grudging – contributing a paltry $100 million to its so-called Growth Fund, well short of what is needed to pick up the pieces.

Those miserly figures include the $20 million Automotive Diversification Program which opened this month, with no major announcement or consultation with the industry, and it is only open to supply chain firms to support spending on capital equipment. With such restricted eligibility one could be forgiven for thinking the Government simply did not want supply chain firms to apply.

By contrast, Labor’s $42 million Automotive New Markets Program was open to component suppliers to spend on any number of activities, including labour costs, education and training programs, payments to research organisations such as universities and CRCs, second-hand machinery, tooling, prototypes and IP protection.

Unlike the Abbott Government, Labor believes there is a future for manufacturing in Australia – and that the automotive industry is part of that future.


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