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Productivity Commission Position Paper Undermines Auto Manufacturing

The Federal Chamber of Automotive Industries is disappointed with today’s Productivity Commission position paper into Australia’s Automotive Manufacturing Industry. While the FCAI will review the Paper in full, including its recommendations, it is unsurprising to note that the PC again runs the same argument it always runs: that the world would be a better place if only the Australian Government didn’t support the automotive industry.

Today’s release, along with recent statements by parts of the Government on industry assistance, reinforces the need for the Government to ask itself what type of economy the Government wants for Australia. The Government should be careful in weighing the input provided by the PC as it considers this important question.

This is particularly relevant given that the Productivity Commission did not address the industry assistance provided by other countries. This is despite the fact that the Terms of Reference state explicitly that the PC is to take into account the assistance provided to the automotive industry “by major and emerging automotive-producing countries”.

It is extremely disappointing that the PC considered this was “not feasible for this inquiry”, despite the 19 pages at appendix B on international assistance arrangements that shows the extensive levels of assistance used by governments around the world to support their local industries.

Why does almost every other G20 country think their automotive industry is an important part of their economy and their future?

Equally, the PC downplays the very real benefits provided by the automotive industry provided to the broader economy in the form of spill-overs. The FCAI and several other submissions provided extensive coverage of the nature and extent of those spill-overs. 

As the Australian Government commits to reducing Automotive Transformation Scheme funding by $500 million, putting at very real risk the entirety of the Australian automotive industry, including thousands of jobs, this sort of selective analysis by the Productivity Commission is extremely disturbing. 

For further information contact:
Sheena Ireland, Communications Manager
P: 02 6229 8221
M: 0458 038 555