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Macfarlane releases car industry terms of ref -

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TONY EASTLEY: Employment is at the heart of concern over the future of the Australian car industry. The Federal Government will today release the terms of reference for the Productivity Commission review into the industry.

Included in the terms of reference is the examination of car manufacturing assistance around the world and the potential for Australian made cars to be exported. The commission will release an interim report before Christmas.

The Federal Industry Minister will discuss the details of the inquiry with Toyota executives in Tokyo later today.

As he was about to fly out, Ian Macfarlane spoke to our reporter in Canberra, Samantha Hawley.

IAN MACFARLANE: Well broadly, we're keen to ensure that Toyota understand how important it is to Australia that we maintain a car manufacturing industry in the country and that they play a critical role in that. We'll be having a fairly broad range discussion.

SAMANTHA HAWLEY: And what will be your response if they ask you for further financial assistance?

IAN MACFARLANE: Well I made it clear that the process at the moment is one of releasing the Productivity Commission review, which will, terms of reference will be released and I'll be handing them out to Toyota when I'm there.

I've also been making it clear that in terms of a response we won't be in a position to respond in terms of any long-term position until the early to mid part of 2014, so that's an important part of making sure that we're all on the same page. At this stage, certainly no earlier than late April or early May.

SAMANTHA HAWLEY: But that's a problem isn't it for Holden? I mean Holden has warned that it could stop manufacturing in Australia if it doesn't have an answer by Christmas.

IAN MACFARLANE: Well I made it clear to Holden right from the start that we're not in a position to give them an answer before Christmas. They may not accept that readily but that's the reality. I'm not going to put in place long-term car plans without seeing a full assessment of the situation, not only by the PC but by everyone who wants to have an input into this.

This is the process and it has to take time. We can't just throw out a heap of money and hope we can fix it because that will inevitably lead to the failure of the car industry.

SAMANTHA HAWLEY: So do you disagree with them that they need this answer before Christmas?

IAN MACFARLANE: Well that may be their position but I can't, if that is their position then I can't help them. They've known that now for the best part of two months.

SAMANTHA HAWLEY: Alright, well the terms of reference says the industry will look into the changing international automotive environment and the type and level of support being provided to overseas manufacturers. What levels of support are we seeing there and, in your view, has the Australian Government been too generous in the past?

IAN MACFARLANE: Well every other country in the world subsidises its car manufacturers, in most cases far more extensively than Australia. So we want to get all those facts on the table so we can have a comparative position in terms of the expectation that the car industry has of Australian taxpayers supporting them into the future.

SAMANTHA HAWLEY: So it could be an argument that in fact Australia needs to increase the amount of assistance it's given the industry?

IAN MACFARLANE: Well look, I'm not ruling anything in or out, and this is the whole reason you have a defined process which is sure and sound instead of just rushing out and tossing money here and there or turning your back. We need to know exactly what everyone else is doing.

TONY EASTLEY: The Federal Industry Minister Ian Macfarlane speaking to Samantha Hawley as he was boarding a plane bound for Tokyo.