Abbott, Hockey et al would have you believe that GM have made a decision to cease manufacturing in Australia. Kim Carr and Jay Weatherall have been saying that GM were willing to continue and had specified exactly what was required. My recall is that Weatherall said they wanted the Government to chip in $130 million. Carr told Waleed Aly that the price was significantly less than $150 million. Carr said further that the hectoring and bullying by Hockey, Abbott and others clearly let GM know they were not wanted.
I think Carr is right. The Government wanted to make the decision look as though it was made by GM alone and to a degree they have succeeded.
Tim Colebatch, in a column written before the decision was announced (sadly, his last) was clear that the decision was made by Abbott. He thinks it could precipitate a recession. And:
car programs cost $400 million a year, nothing like the $3 billion a year for diesel fuel rebates to mining companies, or the $5 billion to subsidise negative gearing. The budgetary cost of losing this industry will dwarf the cost of keeping it.
There is a bit of a meme around that the MSM are giving the LNP Coalition a free ride in government. On Friday the Australia Financial Review did its bit to buck the trend by asking the above question in an editorial.
When federal Industry Minister Ian Macfarlane spoke about a “final” assistance package for GM Holden last week, The Australian Financial Review took it as a sign that someone was finally standing up to the car makers’ protection racket. But Mr Macfarlane’s latest comments indicate a more protectionist mind-set. He agreed that Australia “needs” a car industry. He wants to reverse Ford’s decision to cease manufacturing cars in Australia after 2016. He wants an Australian industry to make cars that are driven “all over the world”. And he flags the option of an Australian car industry that is “supported by the government long term”. “I’m going to do everything I can to work with the companies to make sure that car workers’ jobs are protected, so we can have an industry long-term, so that Australia can be proud of its industry base,” he said on Thursday.
Has this normally sensible minister gone mad? It’s one thing to politically show you are doing everything you reasonably can to keep an industry going. But it’s another to use the language of the mendicants and rent seekers…
The AFR says that putting uncompetitive industries on permanent subsidy mocks Tony Abbott’s vow to make Australia open for business. It says that Joe Hockey and company should stand up to this lunacy.
At stake is whether the Abbott government has the wit and gumption to tackle the serious task of reviving Australia’s stalled productivity growth. Mr Macfarlane should be the first person to recognise this.