Productivity Commission report to question value of car subsidies

[BroadyFord]

Bye bye Toyota!

Productivity Commission report to question value of car subsidies

http://www.theage.com.au/federal-pol...131-31r9y.html

A Productivity Commission paper on government assistance to car makers will recommend the federal government reassess industry assistance and question the economic benefits of billions in subsidies.
Fairfax Media has learned the report, which will be released on Friday afternoon, will take a tough line on further funding requests in recommendations that will raise the stakes for Toyota's 2500 manufacturing workers.
The report will be a further blow to Victoria's struggling manufacturing sector, still reeling from the federal government's decision on Thursday to knock back a request for $25 million in assistance to fruit processor SPC Ardmona and from Holden's decision to announce in December last year it would quit manufacturing in 2017.
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Treasurer Joe Hockey engaged the Productivity Commission in November to examine the car industry's "productivity, investment, profitability, international competitiveness, exports, workforce structure and practices, skills levels and long-term sustainability".
The Victorian state government is believed to be already preparing for the worst, and is focusing on what assistance it can obtain for a much-needed restructure of the Victorian economy after recent blows to the manufacturing sector.
It's understood the report will find that $30 billion in funding has been provided to the car industry since 1997 and will question the argument, put by Labor and the union movement, that the multiplier effect of government co-investment in car makers outweighs the direct cost to government.
The report is expected to call for government subsidies to be reassessed and will argue that component makers would benefit from regulatory reform and increased labour market flexibility.
The Commission's final report on the automotive sector is not due to be handed down until the end of March, but the position paper gives a clear signal as to where the Commission's final report will land.
The report will increase pressure on Toyota, which is the last car maker in Australia and which will make a decision on whether to manufacture its next generation Camry in Australia later this year.