Government assistance for the automotive industry is about what sort of country Australia wants to be, South Australian Premier Jay Weatherill says.
Mr Weatherill has told a Productivity Commission inquiry into the future of automotive industry funding that a draft report must be handed down to clear the way so urgent decisions over the future of car producer Holden and the wider auto manufacturing sector can be made.
Without writing the industry a blank cheque, Mr Weatherill said support must continue if Australia was to have a diverse, balanced and resilient economy.
“It’s about what sort of nation you want,” Mr Weatherill told reporters after his appearance today.
“Do you want to be a nation that just digs things up and sticks it in containers?
“Or do you want to add value to it, because that’s the means by which we actually distribute income in this nation.
“It’s the way we all get to share in the prosperity that actually comes from our natural resources.”
The commission’s recommendations are expected to determine Holden’s future.
If it sides with continued government help, the commonwealth is likely to negotiate a new assistance package.
But if it recommends against ongoing funding, Holden is likely to follow Ford and close its assembly facilities.
The company is thought to need as much as $500 million in order to commit to the development and assembly of two new car models in Australia from 2016.
Mr Weatherill told the commission that having a car manufacturing industry in Australia was like having a training college for the economy where skills are transferred to other businesses and capabilities are shared across the whole of the economy.
“If you want that in your economy, the evidence is, across the world, that you have to pay for it,” he said.
Australian Manufacturing Workers Union state secretary John Camillo said the commission’s investigations were focused on the feasibility of continuing financial help.
“The one thing they have forgotten is workers, their families and the community at large in regards to what effect this will have if you have a closure,” he said.
The Australian Automotive Aftermarket Association has called for policy settings to encourage car component producers to diversify into the after-market industry and produce accessories that are used over the life of a vehicle.
Executive director Stuart Charity said government assistance should be restructured to cover the entire auto manufacturing sector, including after-market producers and suppliers.
The Productivity Commission will next take its public hearings to Melbourne to hear submissions from Toyota and Holden.
It is scheduled to release its preliminary findings on December 20, ahead of a final report by March 31.
