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Wednesday, 26 November 1986
Page: 2781

Senator WATSON(3.12) —The 1985-86 annual report of the Automotive Industry Authority covers the Authority's first full year of activity. The Authority actually has a number of responsibilities, one of which is to monitor the performance of the industry in order to determine progress towards the attainment of industry goals, as set by government policy. Of course, another function of the Authority is to encourage the export of Australian produced vehicles and components. The Authority has a fairly heavy level of expenditure. In fact, in 1985-86 expenditure totalled $21.5m.

I must say it is heartening to see that the Government is at last doing something positive for the Australian car industry. In the recent past it has actually attacked the industry from a variety of sides. The fringe benefits tax, the depreciation of the Australian dollar, which substantially hiked up the price of essential imported parts, increases in sales tax and the introduction of lead-free petrol, are all examples of government policies which have severely damaged the industry. In fact, total car registrations in the new car area in the 10 months to October were 22 per cent less then the figures at this time last year. As the Leader of the Opposition (Senator Chaney) stated, it is the lowest level of registrations in Australia in more than 10 years. It is predicted that, by the end of 1986, the industry will have gone through its worst year, unfortunately, since 1972. That was the year, of course, in which the economy suffered a credit squeeze. Unfortunately, this trend is expected to continue throughout the whole of next year and it will place tremendous pressure on an already struggling automotive industry which is heavily burdened with the costs of high reinvestment programs.

In light of all the difficulties which are being faced by the industry, the establishment of the Automotive Industry Authority is something of an hypocrisy. It displays the fact that one area of government is out of step with another. While one of the Government's aims is commendable-that is, the establishment of the Authority-many other policies of government are actually jeopardising the very industry that, for example, the Minister for Industry, Technology and Commerce (Senator Button) is trying to foster. The Australian Auto Mobile Dealers Association estimates that 4,000 jobs have been lost so far in the industry, and there are more to be lost. Manufacturers have been laying off workers. Unfortunately, many dealerships have already gone into liquidation.

The greatest torpedo that the Government has launched against this industry has been in the form of the fringe benefits tax. The Hawke Government failed to carry out a cost benefit analysis of the fringe benefits tax on the automobile industry. This failure is now being shown as a glaring mistake because the tax is hitting the whole spectrum of the industry. In particular, it is hitting Mr and Mrs Average-Mr and Mrs John Citizen-because the worst affected area of the industry is the medium sized and small car market. The industry already employs about 69,000 people and accounts for 17 per cent of all retail sales. No amount of support by one government authority will be able to save an industry which is so integral to our economy, while the Government pursues such detrimental policies in other areas.