Oz Politicians Ratchet Up Rhetoric on Auto Sector Aid

With Australia’s next scheduled general election still more than a year away, the future of the country’s auto industry is becoming a political football.

And while the politicians play games in an effort to win votes, the country’s three domestic auto makers must be wondering what the future holds for them.

The latest spat began when what started as an attack by federal opposition treasury spokesman Joe Hockey on the government backfired.

It involved the continuing political fallout from Ford Australia’s announcement of 440 layoffs and a production cut after receiving A$103 million ($105.6 million) in federal and state government assistance in January, a move Prime Minister Julia Gillard said at the time would create 300 jobs.

Hockey is challenging the government to justify its multimillion-dollar bailouts to the local car industry, saying on Network Seven TV it is clear Australians are voting with their feet by buying imported vehicles.

“Writing out a check with no conditions to Ford or General Motors is wrong,” he says.

The Australian newspaper quotes Hockey as saying: “You know, Australian-made vehicles are roughly 70% of sales of what they were previously. And therefore Australian consumers are deciding not to support Australian-made cars, because in a number of cases like the (Ford) Falcon, (it) just does not add up for Australian households.

“So, let's put it in the hands of the Australian people. They're making their decisions.”

The Australian Associated Press quotes Hockey as later telling reporters:

“I don't like handing out taxpayer money to industries, because ultimately it's someone else's increased taxes. The car sector should survive in Australia without taxpayer subsidies.”

The Australian newspaper reports Coalition communications spokesman Malcolm Turnbull as throwing fuel on the fire, calling for a tougher approach to industry aid and saying governments should allow struggling companies to shut down.

It was an opening the beleaguered Labor government with its 30% popularity rating could not resist. Industry Minister Greg Combet says in a statement the opposition’s true intentions for the auto industry now are clear.

“Joe Hockey has revealed that a Coalition government would abandon the Australian automotive industry entirely, effectively killing off the industry, endangering the quarter of a million jobs that rely on it and the broader manufacturing sector.”

Combet says Hockey not only reaffirmed the Coalition's long-standing plan to cut A$1.5 billion ($1.53 billion) from the auto industry, but also declared it is not in Australia's interests to continue manufacturing Australian cars, and that the entire A$5.4 billion ($5.5 billion) New Car Plan is “wrong.”

“It is clear that Mr. Hockey wants to axe a key component of support for the Australian manufacturing sector to create a slush fund for (Opposition leader) Tony Abbott's reckless promises and to walk away from the million workers who rely on manufacturing to put food on their tables.”

Combet says the Labor government is encouraging auto makers to innovate and invest to ensure the local industry has a sustainable future.

“We recognize the importance of skills and innovation within the auto industry,” he says. “We want well-paid, high-skilled manufacturing jobs to be around for future generations. Mr. Hockey should remember if he's giving up on cars, then he's giving up on Australian manufacturing.”

The Coalition counters in a statement that Combet is missing the obvious: Labor is in government while “thousands” of auto-industry jobs are being lost.

“No government which has the best interest of the Australian car industry and its workers at heart would have broken A$1.4 billion ($1.43 billion) promises to the industry as Labor has done,” the statement says.

Without denying what Hockey is reported to have said, the statement criticizes the government for providing A$249 million ($255.4 million) in special deals to auto makers in the space of a few months without extracting any serious commitments or guarantees in return.

“Mr. Combet would do the nation a service by concentrating on the destructive havoc his own policies have created for auto jobs, rather than desperately lashing out at others with pitiable, overblown lies,” the statement concludes.