Debate needed on car industry: opposition

There needs to be a national debate on whether Australia can sustain a car industry, federal Liberal frontbencher Ian Macfarlane says.

As sales of larger locally made cars plummet, the federal opposition is grappling with whether there should be government subsidies for the industry.

Economists have challenged the efficiency of car industry subsidies, while West Australian Liberal MP Mal Washer has described government handouts as “bloody stupid”.

On Thursday opposition resources commentator Mr Macfarlane said the coalition would conduct a separate review of industry assistance, to help it make a final decision on its policy.

“There is no doubt the car industry in Australia is at a crossroads,” Mr Macfarlane told ABC radio on Thursday.

He called on “economic rationalists” to bear in mind that car manufacturing in Australia supported 50,000 jobs, and the industry could completely collapse if all government investment was withdrawn.

“The real issue is there needs to be a debate about whether or not we have a car industry in Australia,” he said.

Liberal MP Bruce Bilson appeared to support funding for the industry.

“It’s a highly competitive area and car industries represent employment opportunities and sophisticated manufacturing,” he told Sky News on Thursday.

“I think we need to be in that place. It’s an area where we have had some strength in the past.

Opposition industry commentator Sophie Mirabella and Mr Macfarlane finalised a review of manufacturing policy for coalition leader Tony Abbott late last year.

It recommended the coalition review its plan to cut $500 million from the Automotive Transformation Scheme, a program to help car makers to retool their plants during the coming decade.

The shift in the coalition’s policy comes after Manufacturing Minister Kim Carr met auto industry bosses in Detroit and announced $34 million in funding for Ford Australia to secure a $103 million investment and a pledge to keep operations in Australia until 2016.

Sales of the Ford Falcon fell by more than a third last year, while the imported Mazda3 became the nation’s top-selling car, ending the Holden Commodore’s unbroken 15-year reign.

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