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Cars and Fightback!



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Shadow Minister for Industry and Commerc

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CARS AND FIGHTBACK!

The automotive industry will be significantly better off under Fightback! than under the second Button car plan according to an independent ACIL Australia report, *Cars and Fightback!', released today by the Shadow Minister for Industry and Commerce, Ian McLachlan.

'Under Fightback! cars will be more affordable - they will be cheaper to buy, cheaper to run, as the Coalition will abolish fuel excise, and consumers will be paying less income tax, hence will have higher disposable incomes,' Mr McLachlan told the Mar tec Automotive Seminar at the Regent Hotel in Sydney.

'The study found th at in 1995 the net benefits of the Coalition’s Fightback! package to the Australian car companies will amount to $425 per car. By the year 2000 and thereafter the net benefits will still be $190 per car.

'Therefore, in today's money the benefits will average $220 per car per year, or a total of $1,650 over the seven years 1994-2000.

'Under Fightback!, the car industry will:

' - produce about 350,000 more Australian cars by the year 2000 than

under the Button car plan; β - through greater competitiveness, maintain a higher share of the Australian market vis a vis imports;

- export more cars, again because of greater competitiveness; and

- employ more people than at present, who would have more secure jobs at better levels of remuneration.

'The fact th at cars will be cheaper for consumers to purchase will trigger a substantial demand for new cars and cause the average age of cars in Australia to

'Higher sales of domestically produced cars mean th at fixed costs for car makers will fall - they gain big advantages from economies of scale.

fall.

'As well, they will benefit from micro-economic reform and industrial relations reform. ^

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'If these benefits are to be achieved ACIL said concerted action will be required on two fronts:

- a Coalition Government will need to fully and effectively implement its Fightback! program; and

- the industry will need to seize the opportunities to make the necessary and achievable productivity improvements so as to secure an internationally competitive future.

'Our Fightback! policies will reduce business costs and thus help the industry, but ultimately the future will be determined by the industry itself. In order to succeed, it must w ant to succeed.

'The ACIL report concludes th at in every year from 1994 to 2000, and beyond, car manufacturers will be better off under Fightback! and car dealers will be better off.

'The reason is that cheaper cars, cheaper running costs, and higher after-tax incomes will encourage consumers to completely change the stagnant purchasing patterns of the past 15 years, reverting to those in other developed countries,' Mr McLachlan concluded.

F urther information:

06 277 2039 23 October 1992