There have been a number of green car strategies introduced around the world, but according to a commentator in Australia its plan will not be a success.
Tim Wilson, a director of the Free Trade Unit at the Institute of Public Affairs, wrote in the Herald Sun that the Australian car industry is in ‘terminal decline’ and it’s time that Prime Minister Kevin Rudd and his government admitted it.
Mr Wilson wrote of his frustration that automotive industry assistance was expanded to $6.2billion in 2008 – the equivalent of nearly $100,000 per worker and in addition to tariff protection. He claims that the tariffs and subsidies simply make the industry unresponsive to consumer demand.
He points to the fact that Australia has traditionally produced large passenger vehicles but that demand is no longer present. Only 171,432 of the 1,012,432 cars sold were made locally last year – that’s less than 20 per cent. Meanwhile, demand for small and medium sized cars predominantly imported into the country accounts for more than 50 per cent of the market.
In addition, Mr Wilson points to failings in the $1.3billion green car fund aimed at encouraging the research and development of lower emission vehicles. He estimates that State and Federal Government taxes and tariffs add some $7,000 to the cost of a Toyota Prius and it would be the removal of these taxes and tariffs that would be most likely to increase sales.
He also believes the idea that people will buy green cars during a global economic downturn is flawed. Green cars are generally more expensive – with only around 5,000 Toyota Prius models estimated to be sold this year. Consumers it seems simply want cheaper cars.
The 1,200 new jobs created by Holden’s development of a four-wheel drive model he suggests is built on false foundations and no worker can have faith about the sustainability of their job. He thinks young workers should be stopped from entering a ‘dead end industry’.
What do you think about Tim Wilson’s comments on the Australian automotive industry? Does he have a point – is the green car fund doomed to fail? Or should the government do it all it can to assist the industry? Leave a comment with your thoughts.
