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Government must secure minimum 6-month extension from GMAC, GE to ease car dealer crisis.

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- MEDIA RELEASE - SENATOR THE HON. ERIC ABETZ Deputy Leader of the Opposition in the Senate Shadow Minister for Innovation, Industry, Science and Research

Media enquiries: Brad Stansfield 0419 884 666 1

A08109 20 th November 2008

Government must secure minimum 6-month extension from GMAC, GE to ease car dealer crisis

The Rudd Government needs to act immediately to address the credit crisis in car dealerships right around the country, which has been exacerbated by their bungled unlimited bank deposit guarantee.

The withdrawal of GMAC and GE Money from the wholesale car dealer finance market has left a $2b. black hole in Australia’s automotive industry.

If this hole is not filled by 1st January, not only will dozens of car dealers and thousands of jobs be lost - particularly in regional areas - but the flow on effect to Australia’s already suffering car manufacturers will be catastrophic.

If people aren’t able to sell cars, then people aren’t able to buy them, and therefore there is no need to make them.

After extensive consultation with the sector, the Coalition urges the Government to immediately secure an extension of a minimum six months from both GMAC and GE Money before they cease their Australian wholesaling car dealer financing operations, in order to ensure an orderly transition to new financiers.

Given the complexities of the sector, this is the clearest and most sensible way to ease the crisis.

It is up to the Government to determine exactly what measures are necessary to secure this outcome.

Subject to a full briefing, and the measures being grounded in solid advice, the Coalition will be pre-disposed to supporting these measures in a bipartisan way.

It has been almost a month since GMAC and GE announced they would withdraw from the wholesale car credit finance market.

Confidence has been lost and thousands of workers are in limbo.

The Government caused this crisis. It is time the Government acted to fix it.