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Australia parliament passes car tariff legislation

CANBERRA, Sept 16 (Reuters) - The Australian parliament passed legislation on Tuesday to slash tariffs on imported cars and auto components to five percent in 2010 and provide S$4.2 billion ($2.4 billion) to manufacturers to soften the blow.

The plan, first announced by the conservative government in December, extends the Automotive Competitiveness and Investment Scheme until 2015 -- it was due to expire in 2005 -- to provide the extra subsidies for the industry.

Australia's import tariffs will first fall to 10 percent from 15 percent in 2005, mirroring tariff cuts around the world. The Productivity Commission, the government's principal review body on microeconomic policy, will review the tariff cuts in 2008.

"The Australian government is determined to see the local car industry reach its potential on the international stage," Industry Minister Ian Macfarlane said in a statement.

In 2001 the Australian car industry produced 349,940 vehicles and it estimates that by 2010 it will produce 500,000 vehicles a year and export A$10 billion worth of automotive products.

The auto industry, with a turnover of more than A$17 billion a year, is one of the most protected industries in Australia, with national budget aid of about A$730 million in the year ended June 2001. ($1=A$1.52)