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Industry must be given a fighting chance

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Ian McLachlan Media

Industry must be given a fighting chance

Other large Australian industries could follow the Nissan closure, unless the Federal Government made the changes industry itself has demanded, the Shadow Minister for Industry and Commerce, Ian McLachlan said today.

'Two years ago the then Chief Executive of Nissan Ivan Deveson warned that government charges and taxes, poor industrial relations and red tape threatened to sideline the automotive industry. And they have,' Mr McLachlan observed.

'Nissan told the Government that taxes and other charges added $1500 to the cost of every car that rolled off Nissan's assembly lines. The industry contributed around fourteen per cent of the Victorian State Government's revenue and payroll tax and other labour on-costs such as Workcare added forty per cent to base pay.

'Sadly for Nissan's 2000 workers the Government ignored the warnings.' '

Mr McLachlan said that the vehicle industry believed it could adjust to tariff reductions provided these were accompanied by synchronised microeconomic reforms.

'Indeed it believes that in such circumstances Australia has the potential to become an attractive location for vehicle production - rivalling Germany and Japan - instead of languishing near the bottom of the list.

'Nissan's closure therefore cannot simply be written off as desirable industry rationalisation.

'There can be little doubt that if the Government had eliminated taxation of business inputs - the wholesale sales tax and payroll tax and fuel excise - implemented industrial relations reforms and addressed the myriad of structural impediments which make industry uncompetitive, Nissan would not he facing 'rationalisation'.

Mr McLachlan said that Nissan had worked hard and invested a great deal trying to make its operations internationally competitive but ultimately it was let down by Governments unwilling to expose their own activities to that crucial test.

'For example the wholesale sales tax imposes an effective 6% export tax on the car industry whilst overall it contributes as much as $2 billion in sales tax, an excessive share of the tax burden. Why hasn't this Government which continually exhorts the industry to export more removed this burden and others imposed by payroll tax and fuel excise?

'The race for Nissan is now over and unless these changes are made very quickly we will see many more closures. There is no other way.'

4 February 1992 (08) 237 7140

Shadow Minister for Industry and Commerce 11/92 J