SA is central to plans to produce locally made vehicles that are easier on the wallet and the planet, writes KIM CARR.
There are not many industries more important to South Australia than car-making, and there has never been a plan more important to car-making than the one Kevin Rudd and I announced last week. A New Car Plan for a Greener Future wasn't drawn up in response to the global economic meltdown, but it couldn't be more timely. If we want to beat this crisis, we have to maintain confidence, investment and jobs. The car plan will do all three.
It will drive innovation, increase productivity and make us more internationally competitive. It will get Australia developing and manufacturing fuel-efficient, low-emission cars and vehicle technologies. This is the future of motoring, and we are determined to ensure that our industry is part of that future.
Above all, the plan will create high-quality, high-skill, high-wage jobs. About 25,000 South Australians owe their livelihood to the automotive industry, including the 8000 it employs directly. When you create green cars, you create green jobs - jobs that will be sustainable in a low-carbon economy.
Climate-change solutions will be big business worldwide for decades, so the faster we can provide those solutions, the more green investment and green jobs we will capture. That's what the Carbon Pollution Reduction Scheme is about, that's what our clean coal and renewable energy programs are about and that's what the car plan is about.
SA produces one-third of the cars made in Australia and a third of our vehicle exports. If the Pontiac G8 you see in the U.S. or the Chevrolet Lumina you see in the Middle East look familiar, that's because they're variants of the Holden Commodore built at Elizabeth.
They are proof positive of the SA industry's global potential. The new car plan will build on this foundation. One priority will be to strengthen the components sector, which includes about 120 companies in SA. Only about 10 per cent of the state's automotive exports are components; the other 90 per cent are vehicles. Nationally, the split is 40 per cent components and 60 per cent vehicles, so there is scope to lift the local component export performance.
With the global economy in turmoil, we need to focus on today's challenges - without losing sight of tomorrow's opportunities.
The two biggest items in the car plan are the $3.4 billion Automotive Transformation Scheme and the $1.3 billion Green Car Innovation Fund. These are designed to bring about the long-term changes needed to prepare the industry for the future.
More than $1 billion from the transformation scheme is earmarked for component makers and other suppliers. The balance is set aside for Holden and the other two vehicle makers. Everyone in the industry will be eligible to apply for grants from the innovation fund. So will SA researchers in universities and similar institutions. Other elements of the plan are designed to tackle problems facing the industry right now. We have allocated $142 million to ease pressures and kick-start renewal in the components sector, where many firms are under stress. That includes $116 million to restructure companies and retrain workers, $20 million to strengthen suppliers and $6 million to help them break into overseas markets.
The plan also extends immediate assistance to Australian motorists. Our overriding aim is to get Australia producing a wider range of greener models, but that doesn't mean throwing the baby out with the bathwater. SA makes one of the best six-cylinder family sedans in the world. The Holden Commodore is on track to be Australia's top-selling car for the 13th year running. Many families need a larger car, and it is essential that they continue to have green, affordable, Australian-made options to choose from. The LPG Vehicle Scheme doubles the grant for new LPG vehicles to $2000.
A New Car Plan for a Greener Future is worth $6.2 billion - a huge investment by the Australian people. We expect significant investment from industry in return - at least $16 billion over the life of the plan. The industry gets nothing unless it contributes its share. But there is more to this than dollars.
This is a plan for the many thousands of South Australians who earn a living from this industry. It's a plan for their families and the communities that depend on them.
It is a plan for every South Australian who wants to buy a car that is both easier on the wallet and easier on the planet.
Senator Kim Carr is Minister for Innovation, Industry, Science and Research.
First published in The Advertiser, Opinion Section, page 19; Wednesday, 19 November 2008.