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Government's entry into car manufacturing



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THE LIBERAL PARTY OF AUSTRALIA FEDERAL SECRETARIAT

STATEMENT BY HON. A.A. STREET, M.P., SHADOW MINISTER FOR LABOUR

The Labor Government has declared war on the two major domestic car markets. This is the only conclusion that can be drawn from the announcement that the Government is to join Chrysler and Japanese firms to produce a small car in South Australia.

The result could be disastrous for Ford and General Motors-Holden1s , already in trouble because of earlier Government decisions. Having seriously threatened existing employment, let alone expansion in these two firms, the latest Government move could be the last straw.

There is no doubt that the Government supported small car will reduce the proportion of the market now held by the existing local makers, thus further aggravating the problems caused by the lack of economies of scale in local production.

The report by the Industries Assistance Commission stressed that there were too many manufacturers making too many different models in Australia already. Yet here we have the Government deliberately setting out to make the position worse. Not only that; since Government finance will be on terms not available to ordinary commercial borrowers, they are going to subsidise Japanese manufacturers in the process.

It will be interesting to see the reaction of Labor Members representing areas with Ford and General Motors-Holden1s plants to this latest scheme. The economic fortunes and employment opportunities of Dandenong and Geelong, for example, are closely allied to the demand for locally made

cars. In the case of Geelong it is the greatest single influence on local employment. The Member concerned, Mr Scholes, will find himself in a very difficult situation. He will either have to come Out strongly against his Government's policy, or suffer a serious loss of support in his own electorate.

CANBERRA 4 MAY 1975

BLACKALL & MACQUARIE STS., BARTON, A.C.T. G.P.O. BOX 13, CANBERRA, A.C.T. 2600. TEL. 73 2564. TELEX AA 62630