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Government funding boost for Australia's ailing car industry Government funding boost for Australia's ailing car industry
(about 1 hour later)
The Australian government is to restore hundreds of millions of dollars of funding to the ailing autos sector.The Australian government is to restore hundreds of millions of dollars of funding to the ailing autos sector.
Industry Minister Ian Macfarlane said that A$500m ($384m; £254m) of the taxpayer assistance which was cut in last year's budget would be renewed.Industry Minister Ian Macfarlane said that A$500m ($384m; £254m) of the taxpayer assistance which was cut in last year's budget would be renewed.
Mr Macfarlane said the move would ensure the components sector would survive until at least 2017.Mr Macfarlane said the move would ensure the components sector would survive until at least 2017.
Australia's car industry has been in decline for decades, with only three manufacturers left in the country.Australia's car industry has been in decline for decades, with only three manufacturers left in the country.
In recent years, Ford, General Motors' Holden unit and Toyota all said they would stop manufacturing cars in Australia by 2017, effectively marking the end of the country's car production industry.In recent years, Ford, General Motors' Holden unit and Toyota all said they would stop manufacturing cars in Australia by 2017, effectively marking the end of the country's car production industry.
Job lossesJob losses
Under the previous Labor government, A$900m had been earmarked for the components industry under the Automotive Transformation Scheme (ATS). Under the previous Labor government, A$900m had been earmarked for the car and car components industry under the Automotive Transformation Scheme (ATS).
Tony Abbott's Coalition government slashed the ATS funding in last year's budget, to meet an election commitment.Tony Abbott's Coalition government slashed the ATS funding in last year's budget, to meet an election commitment.
But the cut prompted widespread fears, including in the coalition, about thousands of jobs losses and a danger that car makers would pull out of Australia before 2017.But the cut prompted widespread fears, including in the coalition, about thousands of jobs losses and a danger that car makers would pull out of Australia before 2017.
"The government will withdraw legislation that would take A$500m out of the ATS between now and 2017," said Mr Macfarlane."The government will withdraw legislation that would take A$500m out of the ATS between now and 2017," said Mr Macfarlane.
"We need the components industry to be there right till the end," he said."We need the components industry to be there right till the end," he said.
Analysis: Phil Mercer, Sydney
It's been a seismic year for Australia's once-flourishing car industry.
Last May, Ford said it would stop manufacturing in Australia, and in December, General Motors' Holden announced that it, too, would be closing down. Now Toyota has decided to close its assembly lines by the end of 2017, prompting warnings that the slow death of car manufacturing in Australia could push parts of the country into recession.
Toyota said its move to end production in the southern state of Victoria was "heartbreaking", blaming a strong Australian dollar that has eroded international competitiveness and rising costs, which have eaten away at profits.
Some 2,500 Toyota workers will lose their jobs, but the economic ripples will spread much further, threatening large-scale unemployment in the automotive component supply sector and beyond.
The slow death of Australia's car industry
The decision is the latest of a series of policy reversals by the government, including dumping a plan to charge patients extra fees for visiting their local doctor, and abandoning Mr Abbott's signature paid parental leave scheme.The decision is the latest of a series of policy reversals by the government, including dumping a plan to charge patients extra fees for visiting their local doctor, and abandoning Mr Abbott's signature paid parental leave scheme.
Australia's car industry has traditionally received billions of dollars in subsidies from the government.Australia's car industry has traditionally received billions of dollars in subsidies from the government.
However, a national commission recommended the financial support be dropped and that car companies instead cut costs to survive.However, a national commission recommended the financial support be dropped and that car companies instead cut costs to survive.