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Govt gives $6.2b to ailing automotive industry

The Rudd government has announced a $6.2 billion plan designed to boost the automotive industry in Australia, and make it more “economically and environmentally sustainable by 2020”.

Called the ‘Green Car Plan’, it will include a $1.3 billion ‘Green Car Innovation Fund’ which will be provided to Australian car manufacturers, with the opportunity to receive further funding if they design and sell environmentally-friendly cars.

The government will match industry investment in ‘green cars’ on a $1 to $3 basis over a ten-year period from 2009.

The plan is part of the government’s strategy to transform the local economy into a “low-carbon emission, internationally-competitive economy of the future”, according to a statement from the Prime Minister’s press office.

The new plan is designed for 13 years, and is based around manufacturing competitive, low-emission, fuel-efficient vehicles in Australia.

“It will create well-paid, highly-skilled green jobs for the future,” says the statement.

The plan is expected to generate $16 billion in investment in the Australian automotive industry over the 13 years.

The plan is also tipped to work in four key areas. It is designed to:

• Attract new investment in long-term, sustainable vehicle production;

• Green the industry — improving fuel efficiency and reducing carbon emissions;

• Strengthen the local supply chain and boost skills; and

• Link to international supply chains and improve market access for Australian manufacturers.

In addition, automotive tariffs will be cut to 5 per cent, giving Australia the third-lowest tariff regime among economies with a well-developed automotive industry.

Australia will also continue to pursue a free trade agenda.

“The $7.7 billion automotive industry is critical to Australia’s economic future because it employs over 60 000 Australians, and is critical to national R&D and exports,” says the statement.

“Automotive manufacturing sits at the core the nation’s manufacturing effort, because building a modern car involves almost every advanced technology we use, from microchips to light metals.

“Only 15 or so countries in the world can design, engineer and build a car from scratch and we are determined to maintain that capacity.”

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