Herald Sun - Motoring - - Special Report -

grants to the need to pro­duce more en­vi­ron­men­tally friendly large pas­sen­ger cars.

The key is­sues in­clude: CUT­TING tar­iff pro­tec­tion from 10 per cent to 5 per cent from 2010 or freez­ing it at 10 per cent THE fu­ture of spe­cial au­to­mo­tive sub­si­dies THE thresh­old for the lux­ury tax on cars THE ef­fec­tive­ness and ap­pro­pri­ate­ness of the Au­to­mo­tive Com­pet­i­tive­ness and In­vest­ment Scheme TOUGHER car­bon emis­sion stan­dards

The re­view group is now tak­ing sub­mis­sions from the car in­dus­try and will is­sue its fi­nal re­port by July 31.

The re­view is also be­ing used to help roll out the Gov­ern­ment’s $500 mil­lion Green Car In­no­va­tion Fund. This is de­signed to at­tract in­vest­ment to build en­vi­ron­men­tally friendly cars.

It calls for a one-to-three con­tri­bu­tion from car­mak­ers to the $500 mil­lion gov­ern­ment pack­age.

Car com­pa­nies have their own agenda and want the re­view to look out­side Aus­tralia so it can as­sess a range of com­pet­i­tive pres­sures.

Th­ese in­clude the push for free­trade agree­ments with key trad­ing part­ners against a back­ground of non­tar­iff bar­ri­ers in some coun­tries.

Ford Aus­tralia’s new chair­man, Bill Os­borne, says some ASEAN coun­tries are re­duc­ing di­rect trade bar­ri­ers but are slow to re­act on non-trade bar­ri­ers.

He cites Malaysia, which still has an in­di­rect tax that hits im­ports with en­gines larger than a 2-litre ca­pac­ity.

Not sur­pris­ingly, unions want tar­iffs to stay.

Aus­tralian Man­u­fac­tur­ing Work­ers’ Union na­tional sec­re­tary Dave Oliver says if com­peti­tors are lift­ing tar­iffs, then ‘‘we shouldn’t lower tar­iffs’’.

‘‘The idea of pure free trade is a fur­phy. To re­alise that, you just need to look at what coun­tries in our re­gion are do­ing.

‘‘Malaysia has a 150 per cent tar­iff, In­dia 60 per cent and China 40 per cent,’’ he says.

‘‘What we have to be look­ing at in any kind of trade ne­go­ti­a­tions is re­mov­ing other coun­tries’ tar­iffs and mak­ing it a truly level play­ing field.’’

Sev­eral car­mak­ers be­lieve that any gains from a 5 per cent tar­iff re­duc­tion in 2010 have been wiped out by the ram­pag­ing Aus­tralian dol­lar.

Con­cerns about free-trade agree­ments and non-trade bar­ri­ers are raised by Fed­eral Cham­ber of Au­to­mo­tive In­dus­tries pres­i­dent and Toy­ota Aus­tralia and chair­man emer­i­tus John Conomos.

He wel­comes the Fed­eral Gov­ern­ment’s green-car ini­tia­tive.

‘‘It is im­pos­si­ble to un­der­state the po­ten­tial pos­i­tive im­pact this can de­liver,’’ he says.

‘‘But equally we be­lieve this new gov­ern­ment must be more de­mand­ing in its ne­go­ti­a­tion of free-trade agree­ments. The at­tain­ment of gen­uine re­cip­ro­cal sales ac­cess is paramount to our suc­cess in ex­port mar­kets.

‘‘To con­sider fur­ther cut­ting tar­iffs with­out agreed rec­i­proc­ity can only ad­versely af­fect our global mar­ket po­si­tion.

‘‘The pur­suit of that goal de­sir­ably should ex­tend also to non-tar­iff trade bar­ri­ers, not only in FTA ne­go­ti­a­tions but be­tween other coun­tries as well.’’

Fed­eral cham­ber chief ex­ec­u­tive Andrew McKel­lar says Bracks’ midterm re­view will al­low the Gov­ern­ment and the mo­tor in­dus­try to take stock of car­mak­ing’s con­tri­bu­tion to the econ­omy.

The Aus­tralian au­to­mo­tive in­dus­try is a key source of in­no­va­tion and de­sign ca­pa­bil­ity, in­vest­ing $700 mil­lion on re­search and de­vel­op­ment ev­ery year.

‘‘The re­al­ity is, Aus­tralian car­mak­ers are de­sign­ing and pro­duc­ing ve­hi­cles at world stan­dard, not just for the lo­cal mar­ket but also for ex­port,’’ McKel­lar says.

‘‘Last year Aus­tralia ex­ported more than 140,000 cars and we have an op­por­tu­nity to build on that suc­cess.

‘‘It is es­sen­tial that the out­come of the re­view pro­vides the cer­tainty and sta­bil­ity in pol­icy set­tings nec­es­sary to se­cure con­tin­u­ing in­vest­ment in model de­vel­op­ment and pro­duc­tion here.’’

The Bracks re­view and the end of Mit­subishi’s lo­cal man­u­fac­tur­ing have con­cen­trated at­ten­tion on the fu­ture of our car in­dus­try, write NEIL McDON­ALD and PAUL GOVER

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