Monday, November 10, 2008

Australia bets on cars

If you had $6.2 billion to throw at an industry sector  over the next 13 years, would you choose cars?


Prime Minister Kevin Rudd today announced a $6.2 billion plan to make the automotive industry more economically and environmentally sustainable by 2020.

The Green Car Plan will feature an expanded $1.3 billion Green Car Innovation Fund which will provide Australian car companies with the opportunity to receive Government funding to design and sell environmentally friendly cars.

The Innovation Fund will see the Australian Government match industry investment in green cars on a $1 dollar to $3 dollar basis over a ten year period from 2009.

This is another chapter in the Rudd Government’s green investment strategy to transform Australia’s economy into a low-carbon emission, internationally-competitive economy of the future...

This is decisive and strong action to protect the Australian economy during the global financial crisis.

The 13-year New Car Plan for a Greener Future is about manufacturing competitive, low-emission, fuel-efficient vehicles in Australia. It will create well-paid, highly-skilled green jobs for the future.

The plan is expected to generate $16 billion in investment in the Australian automotive industry over the life of the plan.

Further the overall Green Car Plan will provide:

· A better-targeted, greener, $3.4 billion assistance program, the Automotive Transformation Scheme (ATS), running from 2011 to 2020;

· Changes to the Automotive Competitiveness and Investment Scheme in 2010, consistent with the Bracks review proposals, to smooth the transition to the ATS ($79.6 million);

· $116.3 million to promote structural adjustment through consolidation in the components sector and to facilitate labour market adjustment;

· $20 million from 2009–10 to help suppliers improve their capabilities and their integration in complex national and global supply chains;

· $6.3 million from 2009–10 for an enhanced market access program;

· A new Automotive Industry Innovation Council, bringing key decision makers together to drive innovation and reform; and

· A $10.5 million expansion of the LPG vehicle scheme, to start immediately, that doubles payments to purchasers of new vehicles using LPG technology.

The plan implements the recommendations of the Review of the automotive industry, including a reformed Automotive Transformation Scheme, an expanded Green Car Innovation Fund, and measures to promote industry competitiveness.

Automotive tariffs will be cut to 5 per cent, giving Australia the third-lowest tariff regime among economies with a well-developed automotive industry.

Australia will continue to pursue a free trade agenda because the future of the industry lies in innovation and global integration, not industry protection with old fashioned quotas and tariffs.

The $7.7 billion automotive industry is critical to Australia’s economic future because it employs over 60 000 Australians, and is critical to national R&D and exports.

Automotive manufacturing sits at the core the nation's manufacturing effort, because building a modern car involves almost every advanced technology we use, from microchips to light metals.

Only 15 or so countries in the world can design, engineer and build a car from scratch and we are determined to maintain that capacity.

The plan has a high level of support at the beginning to accelerate reform and renewal, eventually tapering down to zero.

The plan works in four key areas. It will:

· Attract new investment in long-term, sustainable vehicle production;

· Green the industry – improving fuel efficiency and reducing carbon emissions;

· Strengthen the local supply chain and boost skills; and

· Link to international supply chains and improve market access for Australian manufacturers.

A New Car Plan for a Greener Future provides the investment certainty the industry needs as it adjusts to significant new challenges.

The plan demonstrates the government's commitment to modern manufacturing and to providing high-skill, high-wage jobs for Australians.

For more information on A New Car Plan for a Greener Future, including the full government response to the Review of Australia’s Automotive Industry, visit