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AAA Calls on Bracks Review to Make Cars Green

4.6.2008

Australia’s peak motoring body, the Australian Automobile Association (AAA), today told the Bracks Review of the Automotive Industry that Australian manufacturers should be moving more quickly to produce cleaner, greener vehicles.

AAA said this push for greener vehicles should not provide a reason to extend or maintain tariff support and protection for the industry.

Appearing before the Review hearing in Melbourne today, AAA’s Director of Policy & Research, John Metcalfe, said the Australian automotive industry needed to be a part of the global push towards cleaner vehicles.

“The world is now moving towards lowering greenhouse gas emissions, and the automotive industry has a major part to play in this as well,” Mr Metcalfe said.

“The AAA motoring clubs and their 6.5 million motoring members support the FIA Foundation’s global Make Cars Green declaration, which sets out clear non-mandatory fuel economy targets of 140 gCO2/km for all passenger cars.

“Many green cars are already available now.  In fact, a recent study has shown that if everyone purchased the ‘best in class’ vehicles, emissions would reduce by an average of 25 per cent.

“While we welcome the announcement of the Green Car Challenge, in which the Federal Government has promised to buy ‘green cars’ if local manufacturers produce them, we believe this should not be limited to Australian made cars only.

“Australia needs a strong automotive industry, but one free of current high levels of protection and operating in a world marketplace, producing efficient, environmentally-friendly vehicles.

“Assistance to the local industry, including the Budget decision to increase the Luxury Car Tax from 25 per cent to 33 per cent, will work against the promotion of cleaner and safer vehicles.  The anomaly of tariffs on 4WDs at 5 per cent, compared to tariffs of 10 per cent on imported passenger vehicles, has not helped either.

Mr Metcalfe also told the Inquiry hearing that tariffs on imported vehicles and industry assistance through the Government’s Australian Competitiveness Investment Scheme (ACIS) should be reduced, as originally planned, in order to provide cheaper cars for Australian drivers and their families.

”Higher tariffs on imported vehicles increase the price of new cars and indirectly used cars, and disadvantage Australian motorists,” Mr Metcalfe said.

“This assistance works against AAA’s objectives of promoting responsible, affordable and safe motoring and safeguarding and protecting the interests of Australian motorists.”

AAA’s submission to the Review of the Automotive Industry can be downloaded at www.aaa.asn.au.   AAA’s recommendations to the Review follow.

 

AAA Recommendations to the Review of the Automotive Industry

 Recommendation 1      AAA recommends that the tariff reduction program announced in 2002 should continue, with tariffs on passenger motor vehicles and components being reduced to 5 per cent in 2010.

Recommendation 2      AAA recommends that the Luxury Car Tax be abolished.

Recommendation 3      It is recommended that:

  • The Government continue its planned gradual reduction in Australian Competitiveness Investment Scheme (ACIS) funding once tariffs are reduced to 5 per cent.
  • If it is deemed desirable that ACIS (or other grant funding) should be continued beyond 2015, the Review should report on the relative merits of alternative arrangements such as providing the industry, or individual firms, with a direct grant which is more transparent.
  • ACIS funding (or other grant funding) should be tied to specific safety and environmental outcomes. Reports showing performance against targeted objectives should be produced on an annual basis.

Recommendation 4      AAA recommends that consideration be given to mandating the labelling of the ANCAP star ratings on vehicles (locally manufactured and imports) sold in Australia. Where ANCAP tests have not been conducted for certain vehicles, this fact should be recorded on the label.

Recommendation 5      AAA recommends that the Government consider establishing a Safe Car Innovation Fund to promote safety in new vehicles and assist with funding of ANCAP.

Recommendation 6      AAA recommends that the Federal Government negotiate with industry a new target of national average carbon emissions for all new locally made light vehicles. The target should be ambitious and consistent with the Government’s targets for reductions in greenhouse gas emissions.

Recommendation 7      AAA recommends the adoption of a non-mandatory fuel economy target of 140 gCO2/km for all passenger cars, which is consistent with the FIA’s Make Cars Green declaration.

Recommendation 8      AAA recommends that:

  • The Government’s Green Car Challenge of purchasing value-for-money environmentally friendly vehicles for the Commonwealth car fleet should not be restricted to vehicles manufactured in Australia.
  • The Government should immediately set a revised and challenging target for its Commonwealth car fleet based on the Green Vehicles Guide and ensure that performance against target is reported annually.

Recommendation 9      AAA recommends that:

  • The Government should not dictate the type of low emission vehicles (such as hybrids, flexible fuel and diesel) eligible for funding from the Green Car Innovation Fund (GCIF).
  • Local manufacturers receiving funding from the GCIF should be required to report on the development of green car technology and production plans in an Annual Report.
  • Continued GCIF funding should be conditional on the achievement of solid commercial and environmental outcomes.

 

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