News

Future Assistance To Motor Industry Should Be Conditional

28.5.2002

In a submission to the Productivity Commission Inquiry into the Automotive Manufacturing Sector Post 2005, the Australian Automobile Association has recommended that any future assistance to the industry be conditional on improved safety and environmental outcomes.

 

And according to the AAA, if future Government assistance is to be provided, it should be through a direct grant to the industry or specific firms (rather than a tariff), as this could be better targeted and should be more transparent.

 

AAA Executive Director, Lauchlan, McIntosh, said that the thrust of the AAA submission was that lower tariffs as well as lower taxes and charges would result in reduced car prices and that would stimulate the sales of newer vehicles. He said the AAA submission concentrated on addressing options the Commission should consider in the Inquiry.

 

"Assistance to the industry, tariffs, taxes and charges, stamp duty and the luxury car tax are all disincentives to the purchase of newer, safer and more environmentally friendly vehicles. The automotive industry in Australia remains one of our most highly assisted industries and the effective rate of assistance for passenger motor vehicles will still be double the manufacturing average when tariffs are schedule to fall to 10% in 2005," Mr. McIntosh said.

 

Other recommendations contained in the AAA Submission include:

 

  • The Productivity Commission reporting on the role parent companies of local manufacturers have in determining export market access,
  • The use of incentives to accelerate the introduction of cleaner Euro 3 and Euro 4 compatible fuels and vehicles,
  • Vehicle manufacturers being required to make emission test results public, and the Commission should consider whether labeling of NCAP crash test results on new vehicles should be mandated (similar to fuel consumption label requirements).

 

The AAA has also called for the Productivity Commission to report on:

 

  • progress in setting fuel consumption targets,
  • the desirability of preferential tariff treatment for hybrid vehicles,
  • all Government grants to local manufacturers since the last review with a comparison of that assistance with assistance provided by tariffs, and
  • the extent to which additional taxes and charges, including the GST, add to the cost of a new car and the distortions arising from the application of stamp duty.
  • progress in setting fuel consumption targets,
  • the desirability of preferential tariff treatment for hybrid vehicles,
  • all Government grants to local manufacturers since the last review with a comparison of that assistance with assistance provided by tariffs, and
  • the extent to which additional taxes and charges, including the GST, add to the cost of a new car and the distortions arising from the application of stamp duty.

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