Automotive Industry Assistance Should Be Tied To Outcomes


The Australian Automobile Association has welcomed the general thrust of the Government’s response to the Productivity Commission report on the Auto Industry, but at the same time warned that continued assistance should be conditional.


The Executive Director of the AAA, Lauchlan McIntosh, said the decision to further reduce the tariff on passenger vehicles to 10% in 2005 and 5% in 2010 would mean more affordable vehicles in Australia, which would be welcomed by motorists.


"It is disappointing however, that very few conditions have been placed on the 'more-than-generous' $4.2 billion in taxpayer funded assistance that will be provided to the industry over the decade from 2005," Mr. McIntosh said.


"In our submission to the Productivity Commission, AAA argued that future industry assistance should be conditional on improved safety and environmental outcomes from locally produced vehicles.


"The package does include research and development money to encourage manufacturers to invest in new and innovative technologies. This is welcome but the government needs to spell out priority outcomes in this area," he said.


"It is common sense that if our domestic automotive industry is to eventually stand on its own feet, it has to become more competitive with vehicles manufactured overseas.


"European vehicles are currently leading the way in safety and environmental technology. European manufacturers are the only ones to have produced vehicles achieving 5-star NCAP crash testing results and they are leading the way in clean fuel technology.


"The Government has a rare but powerful opportunity to accelerate improvements in the Australian vehicle fleet by tying future industry assistance to specific outcomes that reduce the road toll and the impact of vehicles on the environment," Mr. McIntosh said.

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