Aussie Car Industry Review Released: Supports Tariff Reduction & Industry Assistance

[JoeT]

Bracks Industry Review Finally Revealed

Marton Pettendy
15 August 2008
www.goauto.com.au

Bracks review supports tariff reduction and new car industry assistance scheme.

The continuation of scheduled import tariff reductions and a new federal government assistance scheme are the key recommendations of the widely-anticipated Review of Australia’s Automotive Industry released today in Melbourne by the Rudd government.

GM Holden was today expected to welcome the 190-page review headed by former Victorian premier Steve Bracks, which was finalised on July 22 and handed to government on July 31.

But opposition industry spokesman Eric Abetz criticised the timing of the review’s presentation – two weeks later during the Beijing Olympic Games - by Mr Bracks and the federal minister for innovation, industry, science and research, senator Kim Carr, who commissioned the report on February 14.

“Everything is determined by the news cycle,” he said.

“And with the Bracks review, clearly there are elements in it that they must be concerned about, because there's no reason for not having released it immediately, and now to release it in the middle of the Olympics, they're trying to bury this report from the public's sight as much as possible.”

The Bracks review’s chief recommendation is the replacement of the federal government’s current Automotive Competitiveness and Investment Scheme (ACIS) with a new “retargeted” Global Automotive Transition Scheme (GATS), designed to support research, development, design and export.

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Holden Response to Automotive Review Recommendations

GM Holden
16 August 2008
www.holden.com.au

GM Holden today welcomed the release of the Federal Government’s Review of the Australian Automotive Industry but questioned whether proposed initiatives could offset the impact of further tariff reductions.

GM Holden Chairman and Managing Director, Mark Reuss, said the comprehensive report appeared to offer possibilities to actively encourage innovation and investment by manufacturers and suppliers to grow their operations in Australia.

Mr Reuss said there was concern within GM Holden, and parent company General Motors, that reducing the tariff from 10% to 5% in 2010 would outweigh the benefits of new programs suggested in the Review.

“This is a well considered report and we will need time to determine the impact of these recommendations, should they be adopted by the Federal Government,” Mr Reuss said.

“Holden is developing and adopting more fuel and environmental technologies than at any other time. It is an exciting transition for our business and the industry, as we push for more Australian cars using Australian energy rather than foreign oil.

“To achieve that transition, it is vital that the Government creates a framework making further investment in Australia attractive to our parent company which in turn increases our ability to build capacity and capability.

“We applaud the panel in recommending longer term transitional arrangements, but cutting tariffs would fundamentally erode our ability to compete against other nations for future investment.

“Australia currently has one of the lowest tariffs of any automotive producing country so the playing field is already not level.

“We certainly welcome the thoroughness of the report, which has some innovative ideas to ensure Australia continues to have an automotive industry.”



Car Makers, Unions Slam Review

Michelle Draper
15 August 2008
www.drive.com.au

Unions and car manufacturers have slammed a review of Australia's car industry for risking the nation's ability to compete with global imports.

The automotive review recommended a reduction in car tariffs from 10 per cent to five per cent by 2010, in defiance of widespread opposition from the industry and state governments.

The report, by former Victorian premier Steve Bracks, also recommends the production of more environmentally-friendly vehicles, calling for the federal government's $500 million green car innovation fund to be brought forward to 2009.

If successful, the scheme should be doubled to $1 billion and extended beyond its initial five years, the report suggests.

A Global Automotive Transition Scheme, funded by $2.5 billion from 2010 to 2020, would support research, development and design.

The scheme should include a $60 million to $80 million industry restructure fund to improve supply chain economies of scale, the report recommended.

Prime Minister Kevin Rudd said the review would be examined in detail before the government made any decisions.

"We take the future of our automobile industry seriously, we take the future of manufacturing industry seriously," he said.

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Economists Say Bracks Tariff Modelling Is Wrong

Terry Martin
20 August 2008
www.goauto.com.au

Industry body claims the data that underpins the Bracks Report is incorrect.

Joining car manufacturers, unions and others in criticising the recommendation that tariffs should continue to fall in Australia, the Federation of Automotive Products Manufacturers (FAPM) has this week argued that there was a major technical error in the Productivity Commission’s modelling on industry assistance which the Bracks review used to reach its conclusions.

The federal government-appointed commission advised the Bracks panel on the economy-wide effects of future assistance options for the automotive industry and found that proceeding with the planned tariff cuts – due to fall from 10 per cent to five per cent in 2010 – and scaling back of the current Automotive Competitiveness and Investment Scheme (ACIS) to the point where it is removed altogether in 2015 would have positive economic outcomes of around $500 million per annum.

Backed by leading economist Peter Dixon, who was one of the architects of the economic modelling in question, FAPM is adamant that these outcomes are incorrect and “massively overstate the investment effect that lies at the heart of the commission’s optimism over cutting tariffs further”.

The chief executive of the peak representative body for the car components sector, Anna Greco, has told GoAuto that maintaining tariffs and ACIS assistance at current levels would have a negligible impact on the economy and that the federal government must now re-evaluate the tariff issue before making its anticipated policy response, which will be to proceed with the cuts if it acts on the Bracks review’s recommendations.

“What Professor Dixon, who developed the model that they (the Productivity Commission) used, has found is that they calculated things wrongly … and that by having the assistance, and by keeping tariffs at the same level, there is no real cost to the economy when you take into account all of its various benefits – it isn’t a drag on the economy,” Ms Greco said.

“In making any decisions on tariffs, the government really does need to re-look at the modelling in making a decision. Otherwise you can end up with the wrong decision based on the wrong data.”

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New Car Manufacturing Plan For Australia On The Way

[mikmak]

I was really expecting the worst from the ex-emperor of Victoria. Considering they have some of the harshest driving infringement fines, I just assumed that he hated cars.

I'm pleasantly surprised at the breadth of "his" recommendations. He has obviously seen the benefit of maintaining the industry, regardless of the current social brow beating it is receiving from every which way.

[Slick_Holden]

I got no complaints, I didn't get a fine..
I live 2 kicks away from the home of the speed camera's, The ring road, They are all over that, I pass them all the time, No need to worry when your not speeding.


Bracks is a good decent man, As far as you can go with pollys, And if he sees something is needed, He will recommend it.
He's sell his grandmother to keep it in order. He might have actually.

So anyway what is the short version of this, I'm not going to read that many pages, I got a sore enough head as it is..

Is this better for Australian car makers, Or is it better for overseas imports?, Not that I'm against giving overseas guys a chop out, I just wouldn't want to do it at the expense of our car makers right now.

[Rick_VT]

Not sure if i agree about dropping the tariff to 5%, i think they should keep it at 10% for a while longer, i dont think they would like another manufacturer to close its doors here, Mitsubishi was only small compared to the main 3 here, i would like to know what benefit they see in lowering the tariff to 5%, lowering it to 10% over the years has certainly made the Australian Motor industry a hell of a lot better than it was before, but why should they lower our tariffs if other countries are much higher than the 10% we currently have.

[mikmak]

One of the outlined points, Rick VT, was to chase more FTAs to ensure that our exports get a better look in at external markets. Of course the problem with a recommendation like that is that it still needs to be approved by a 3rd party.

Another outcome was a "team Australia" approach to the automotive supply chain. From what I can gather, they are referring to auto parts export deals being marketed by our trade minister when he's lazing (read: negotiating) by the pool in Guatemala.

Of course, the big one is 1 Billion dollars to be invested for a green car development fund. It's my understanding that Holden is already lobbying the federal government for this green fund to reduce the economic impact of building a new carbon fibre chassied W427.

[mikmak]

I just realised! I can finally build my PelEton!
rofl rofl rofl

[JoeT]

Holden Response to Automotive Review Recommendations

GM Holden
16 August 2008
www.holden.com.au

GM Holden today welcomed the release of the Federal Government’s Review of the Australian Automotive Industry but questioned whether proposed initiatives could offset the impact of further tariff reductions.

GM Holden Chairman and Managing Director, Mark Reuss, said the comprehensive report appeared to offer possibilities to actively encourage innovation and investment by manufacturers and suppliers to grow their operations in Australia.

Mr Reuss said there was concern within GM Holden, and parent company General Motors, that reducing the tariff from 10% to 5% in 2010 would outweigh the benefits of new programs suggested in the Review.

“This is a well considered report and we will need time to determine the impact of these recommendations, should they be adopted by the Federal Government,” Mr Reuss said.

“Holden is developing and adopting more fuel and environmental technologies than at any other time. It is an exciting transition for our business and the industry, as we push for more Australian cars using Australian energy rather than foreign oil.

“To achieve that transition, it is vital that the Government creates a framework making further investment in Australia attractive to our parent company which in turn increases our ability to build capacity and capability.

“We applaud the panel in recommending longer term transitional arrangements, but cutting tariffs would fundamentally erode our ability to compete against other nations for future investment.

“Australia currently has one of the lowest tariffs of any automotive producing country so the playing field is already not level.

“We certainly welcome the thoroughness of the report, which has some innovative ideas to ensure Australia continues to have an automotive industry.”



Car Makers, Unions Slam Review

Michelle Draper
15 August 2008
www.drive.com.au

Unions and car manufacturers have slammed a review of Australia's car industry for risking the nation's ability to compete with global imports.

The automotive review recommended a reduction in car tariffs from 10 per cent to five per cent by 2010, in defiance of widespread opposition from the industry and state governments.

The report, by former Victorian premier Steve Bracks, also recommends the production of more environmentally-friendly vehicles, calling for the federal government's $500 million green car innovation fund to be brought forward to 2009.

If successful, the scheme should be doubled to $1 billion and extended beyond its initial five years, the report suggests.

A Global Automotive Transition Scheme, funded by $2.5 billion from 2010 to 2020, would support research, development and design.

The scheme should include a $60 million to $80 million industry restructure fund to improve supply chain economies of scale, the report recommended.

Prime Minister Kevin Rudd said the review would be examined in detail before the government made any decisions.

"We take the future of our automobile industry seriously, we take the future of manufacturing industry seriously," he said.

Click here to continue article

[JoeT]

Economists Say Bracks Tariff Modelling Is Wrong

Terry Martin
20 August 2008
www.goauto.com.au

Industry body claims the data that underpins the Bracks Report is incorrect.

Joining car manufacturers, unions and others in criticising the recommendation that tariffs should continue to fall in Australia, the Federation of Automotive Products Manufacturers (FAPM) has this week argued that there was a major technical error in the Productivity Commission’s modelling on industry assistance which the Bracks review used to reach its conclusions.

The federal government-appointed commission advised the Bracks panel on the economy-wide effects of future assistance options for the automotive industry and found that proceeding with the planned tariff cuts – due to fall from 10 per cent to five per cent in 2010 – and scaling back of the current Automotive Competitiveness and Investment Scheme (ACIS) to the point where it is removed altogether in 2015 would have positive economic outcomes of around $500 million per annum.

Backed by leading economist Peter Dixon, who was one of the architects of the economic modelling in question, FAPM is adamant that these outcomes are incorrect and “massively overstate the investment effect that lies at the heart of the commission’s optimism over cutting tariffs further”.

The chief executive of the peak representative body for the car components sector, Anna Greco, has told GoAuto that maintaining tariffs and ACIS assistance at current levels would have a negligible impact on the economy and that the federal government must now re-evaluate the tariff issue before making its anticipated policy response, which will be to proceed with the cuts if it acts on the Bracks review’s recommendations.

“What Professor Dixon, who developed the model that they (the Productivity Commission) used, has found is that they calculated things wrongly … and that by having the assistance, and by keeping tariffs at the same level, there is no real cost to the economy when you take into account all of its various benefits – it isn’t a drag on the economy,” Ms Greco said.

“In making any decisions on tariffs, the government really does need to re-look at the modelling in making a decision. Otherwise you can end up with the wrong decision based on the wrong data.”

Click here to continue article

[nota]

Apparently Bracks is not alone ...

Federal Industry Minister Kim Carr told the ABC that the expected tariff cuts weren’t the industry’s only problems.

"What we've seen in recent times is that the price of the Australian sedans has increased by about $8500 as a result of currency movements ... whereas the tariff is worth about $600," he said.

[Slick_Holden]

Any chance a new FG VE will come down in price with this review?.