Rudd’s Car Rescue Plan
KEVIN Rudd will forge ahead with a multi-billion-dollar car industry assistance package today, amid fears of further job losses and a downturn in the market, but he will warn manufacturers not to expect a blank cheque.
Focusing on fuel-efficient cars, the new stimulus package is expected to go beyond the $2.5 billion in extra funding previously flagged, significantly boosting the Government’s proposed green car innovation fund.
The Government will also confirm today it has accepted a reduction in car tariffs from 10 per cent to 5 per cent in 2010, under a new 10-year plan for the industry.
The move follows a push among carmakers to secure an additional $800 million in compensation for the tariff plan, on top of the $2.5 billion suggested by former Victorian premier Steve Bracks.
Deeply concerned about the impact of the global financial crisis on the future of the domestic industry, the Prime Minister has sought private assurances from carmakers’ chief executives that promised new investments in Australia will proceed despite the economic slowdown.
Mr Rudd has rejected Coalition warnings that the Government should hold fire until it is known whether US car giants will merge or even collapse and what the details of president-elect Barack Obama’s mooted bailout for US car makers are.
Today’s announcement by the Rudd Government is expected to include a $60 million-plus fund to help car-parts suppliers to restructure and fast-track mergers. It follows warnings that, without action, up to 7000 carmaking jobs could be lost by the end of next year.
A separate plan to encourage the big banks to extend credit to car dealers to boost sales, and improve manufacturers’ ability to obtain finance, is being worked through by Treasury officials.
The Coalition has urged caution in light of the fallout of the global financial crisis.
