When Kim Carr gets around to releasing the report of the Bracks Inquiry into the Australian automotive sector handed to the Government last week, let’s hope the quality media give it the attention it deserves.
Meaning, they should be ripping into it. It’s high time we stopped treating the Australian automotive industry as a special case and saw it as the costly rort it is. Malcolm Farr made a good start yesterday on Insiders, explaining just what sort of economies of scale are needed to be seriously competitive in car manufacturing — and why Australia is wasting its time propping up its industry.
Car policy is Labor at its worst. The reflexive instinct to engage in meddlesome industry policy, the ready imposition of costs on consumers and taxpayers, the desire to placate unions and multinationals. Not to mention how it contradicts the Government’s professed intent to get serious about carbon mitigation. Australian built vehicles are significantly less fuel-efficient than European, US or even Chinese cars.
Labor was eager in 2003 to damn the Howard Government for protecting big donor Manildra from ethanol imports. The protection of the car industry is no different — except that it’s vastly more expensive.
According to the Productivity Commission, as car buyers and taxpayers we handed out nearly $1.13b to the car industry in 2006-07. One top of this, the Government is intent on handing out $100 million a year over five years as part of its Green Car fund.
This is for an industry that employs only 48,000 people directly and another 20,000 indirectly. This is barely 6% of employment in the manufacturing sector — only a third of the number who work in food, drink and tobacco manufacturing, less than those working in printing and publishing — even less than those in wood and paper manufacturing. More Australians work in arts and recreation services or media and telecommunications.
It is, on the other hand, very significant in Victoria, where it dominates manufacturing and is a major employer. There are car plants in the safe Labor seats of Gellibrand (Nicola Roxon), Calwell (Maria Vamvakinou), Corio (Richard Marles) and Melbourne Ports (Michael Danby). The key car union, the Australian Manufacturing Workers’ Union, gave more than $166,000 to the Victorian ALP in 2006-07 alone, as well as over $63,000 to the South Australian ALP.
Like other unions, the AMWU is facing hard times trying to retain and increase its membership. But it has the added difficulty of trying to do so in an industry that is going backwards. Manufacturing in Australia has lost over 100,000 jobs since 1996.
For the AMWU, car industry assistance isn’t just industry policy, it’s a life support mechanism. That’s why the union’s Ian Jones called the Productivity Commission “retarded” when its submission to the Bracks Inquiry showed the benefits that would flow from removing the current 10% automobile tariff.
Other manufacturing sectors — apart from TCF — don’t get the sort of assistance the automobile sector gets, even if they employ far more people or produce significantly more elaborate and high-skill products. Despite talk of a recession, other sectors would give their eye-teeth to tap into 68,000 skilled or semi-skilled workers, and they wouldn’t need a $24,000 subsidy per worker either.
Kevin Rudd declared last week that Labor was instinctively pro-free trade. We’ll let’s see him live up to that when Kim Carr takes a Bracks-inspired submission for more car industry protectionism to Cabinet.
There is a strategic reason for having a motor vehicle industry in this country. It is one of the last’ heavy” manufacturing industries we have. The skill bases and plant required for engine and drive train manufacture, body panel pressing, even tyre manufacture are all convertible to other uses in the event of a meltdown in international trade, hostilities blocking our trade routes or other international problem which leaves us isolated. These skills and facilities take years to establish and once lost are almost impossible to regain. Unfortunately the “Beancounter” mentality cannot see beyond their chequebooks and spreadsheets and view every situation from only the financial perspective. Take notice, those decrying the car industry are the same ones who had convinced themselves the stock market would never fall and that interest rates would never rise. This is a situation where you have to look beyond the end of the financial year, something which is almost impossible for a Beancounter to do….. Think of the car industry as the industrial equivalent of the Army Reserve
thanks for the story..like the future fund.with70billion dollars.of our money..instead of starting the bank of australia,we buy $35billion worth of bank money.wich means they can keep ripping us off..the author stated ,the tax payers gave$1.1 billion to the couple of car makers last year..still one company closed…with tthat sort of money..what cars we could design and built…but sorry ,,globilastion is all about ,not us [ but money]..i say step in now .if they cant preduce the right vehicles i am sure australians can
“And while we’re at it, do the same with the equally non-essential cotton and rice growers who are still being helped to destroy our Murray River system”………..Mark, you are displaying your ingnorance on a grand scale. Certainly these industries are not very environmentally friendly but “non-essential” ?
I suggest you do do some serious research and find out just how much they have contributed to the economies of country towns and to the Australian economy generally. Our balance of payment figures would be much worse without them.
Completely agree with Bernard Keane. The car “industry” is one of the great rip-offs of all time. John Button masterminded a pretty gentle weaning process, and these comedians want to undermine even that. They need to move from the world they want to the world we have. There is no reason why we Australians should keep paying to indulge their fantasies. Let’s put that labour into some genuinely productive areas. (And while we’re at it, do the same with the equally non-essential cotton and rice growers who are still being helped to destroy our Murray River system)
just a quick comment to erick….wake up…we keep throwing our money to these companys,,,then if they can get it done cheaper elswere…get stuffed australia…