As reported earlier by GM Authority, the 2013 Australian federal election will likely have a significant impact on local automotive manufacturing and namely, Holden. We’ve known the current Prime Minister Kevin Rudd has pledged to provide A$700 million to the industry, and that opposition leader Tony Abbott vowed to cut funds by A$500 million. The election takes place September 7th in Australia.
Delving further into the numbers, it’s important to note that Mr. Abbott stated in a media release that the opposition is committed to the automotive industry. It appears as though Holden and Toyota Australia, plus their suppliers, may not have much to worry as it relates to funding under Abbott, as the plan to cut A$500 million in possible funding is dwarfed by the A$640 million saved through the removal of the carbon tax, which has raised the prices of Australian-built vehicles, thereby making it more challenging to compete with the already-cheap imports.
As well as stating the opposition’s commitment to the automotive industry, the media release went on to say:
“Under the [the last Coalition (current opposition) government], we helped to deliver the sector a 22% increase in employment, a lift in productivity of 21.9% and a rise in exports of 174.7%. By contrast, under Labor (Kevin Rudd’s party) exports have dropped by 27.3%; productivity has risen by less than 2%; and 20,000 automotive jobs directly and another 60,000 indirect jobs have been lost”
When it comes to the stance taken by automakers on the upcoming election, Toyota has kept very quiet. By contrast, Holden Managing Director Mike Devereux openly discussed the need to fund the industry and stated that the future of local Holden manufacturing will depend on what the next government has to offer. Considering the appeal of Holden to its fans as well as cultural ties that are largely based on the fact that it’s an Australian brand making Australian cars in Australia, the need for Holden to continue local production is significant.
As for Kevin Rudd, his commitment to the industry is exemplified by his party’s pledge to provide A$700 million to the industry. However, the A$700 million could be going to waste, as Mr. Rudd recently introduced changes to Australia’s Fringe Benefits Tax (FBT) that severely affects automotive sales and employment. A 10 percent decrease in new car sales has recently been reported as a result of changes to the FBT. It’s also worthy to note that Australia currently holds a A$300 billion of debt as a result of spending by Mr. Rudd’s party and his predecessor, Julia Gillard. In that regard, the opposition’s proposal to introduce budget cuts is understandable.
With less than 24 hours until the voting polls close across Australia, Tony Abbott is tipped to win the election comfortably. Polls close by 18:00 local time in Australia (6:00 am EDT) on September 7th.
Comments
Now tony has won, what will he do.
The Liberal party has always been a political party for the rich and looking after big business is their main goal and it is usually at the expense of the working class (labor voter)
So, when the manufacturing of cars on Australian soil is so important to Holden, why does it need subsidies?
Besides, the Abott campaign press statement quoted above hides an important fact when stating that “under Labor […] exports have dropped by 27.3%; productivity has risen by less than 2%; and 20,000 automotive jobs directly and another 60,000 indirect jobs have been lost”: Labor provided the government since 2007, and people will remember that a very heavy worldwide economic crisis began in 2008, the second year of the Labor government, and rather few countries and also the automobile industry have really recovered from this crisis. Except China, of course. And, I believe, that not even the USA has surpassed the pre-crisis production and sales numbers.
All governments provide subsidies to auto manufacturers regardless. Australia provides significantly less than Germany, USA and Sweden and more. Given that we have only 3 manufacturers here and probably less suppliers (less because there are only 3 but also because a lot if parts are made in house by the 3), we still don’t provide as much.
Providing GM looks at the 600 million they save instead of the 500 million they won’t be gifted, nothing will change for Holden.
I read that Holden is once of GM’s most expensive operations, and with the election of Abbott, they may use this for an excuse to close Holden manufacturing.
could squash the new ss coming out.
I say give the Australian people a dose of their own medicine and stop production! Make the cars in the us and send them to Australia!
That’s the worst thing GM could do!
Why?
Why should GM continue to invest in a country that doesn’t have the means to keep it’s auto industry?
Because it will be the best investment GM will ever make…
Is that because it benefits you and your people? The only thing GM is concerned is that Australia has cars to sell to it’s people! Where they come from is not important!