Government Senators' Dissenting Report
As announced on 10 March 2015, and reiterated in Government Senators'
dissenting comments in the interim report released on 19 August 2015, the
Government will not make changes to the current Automotive Transformation
Scheme (ATS) legislation.
The ATS programme will conclude at the end of 2017 when Holden and
Toyota end their Australian manufacturing (following Ford in 2016). The
Government's decision gives component makers certainty to transition their
businesses to cope with the decline in production as a result of the
independent decisions of the car makers to leave Australia. This means that the
original $300 million legislated cap on funding for each of the years from 2015
to 2017 remains in place.
The industry has indicated that it is likely to draw down $175 million
of the $500 million that has been restored to the legislated cap for the period
The Government will continue to support component makers in
transitioning their businesses to cope with the decline in production as a
result of the independent decisions of the car makers to end manufacturing in
While the Committee's report makes a number of recommendations to assist
the automotive sector transition to other industries, the report largely
ignores the steps the Government is already taking to address this.
The Government is supporting Australian industry through a range of
specific programs targeted at manufacturing industries.
The $20 million Automotive Diversification Programme will help
automotive supply chain firms enter new markets. To date, there have been two
completed grant rounds with 21 successful applicants awarded $12.4 million,
leveraging a total investment of $33.6 million. A third round of applications
closed on 17 September 2015 and is currently being assessed by an independent
The $60 million Next Generation Manufacturing Investment Programme will
accelerate private sector investment in high value non-automotive manufacturing
sectors in Victoria and South Australia. On 13 November the Government
announced the successful Victorian tenders. This resulted in eleven Victorian
companies sharing in $27.4 million of support, which is expected to leverage a
total of $75 million in investment. On 3 August 2015, South Australian Minister
Kyam Maher and Hon Ian Macfarlane MP announced the results of the South
Australian Round awarding $28.3 million to 15 businesses creating over 430
new jobs. Complementary investment by each business will take the total
investment in new manufacturing capability to over $72.5 million.
As an open economy, Australia needs to engage with the complex task of
economic reform and restructuring, particularly addressing underlying issues of
efficiency and productivity. In this regard, support to Australian industry,
including automotive component manufacturers, is provided through the
successful completion of the Trans Pacific Partnership, the Free Trade
Agreements with China and with Japan and with South Korea. These agreements are
opening up supply chains for Australian businesses who previously had suffered
disadvantages in accessing overseas markets.
We endorse the comments in the majority report about the impressive
record of Australia’s truck manufacturing sector and the fact that it has
developed into a robust and sustainable industry without government assistance.
We do not, however, support the proposal to deny fuel tax credits to on-highway
truck operators who operate trucks manufactured before 1996 (recommendation
18). This would be a costly and economically damaging way of reducing carbon
emissions relative to the Emissions Reduction Fund, the centrepiece of the
Australian Government’s policy suite to reduce carbon emissions.
On-highway truck operators who operate trucks manufactured before 1996
represent almost one third of the truck fleet. Many of these are sole
operators. To push up costs, and reduce the profitability and employment
prospects of these businesses in this way would be harmful to a vital element
of Australia’s transportation sector. This policy is inconsistent with the
Coalition Government’s commitment to ensuring that Australian small businesses
are both supported and not subjected to unnecessary regulatory and cost
imposts. Further, the policy would have adverse impacts on the wider Australian
economy though the adverse impacts on transportation costs that would flow
through to other sectors.
Coalition Senators note that the Committee has also made recommendations
in relation to the Franchising Code of Conduct (recommendation 9), the service
and smash repairs industries (recommendations 11–12), training and
re-employment (recommendations 13–15), specialist and enthusiast vehicles
(recommendation 19) and regulatory arrangements for aftermarket modifications
(recommendation 20). The Government should consider the merits of these
recommendations in its response.
Edwards Senator Matthew Canavan
Deputy Chair Senator
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