News about General Motors exiting manufacturing with it’s Holden brand comes as little shock to the bulk of the Australian automotive component sector, who have known about the brittle state of the industry overall ever since Ford announced it was pulling down it’s shutters in May. Cost pressures brought about by the high local currency and a relentless input cost vs. wages discrepancy have made Australian-made cars uncompetitive both in Australia and export markets. Now, Toyota remains the only marque that is manufactured in this country.
The process of making cars is straightforward. It is also quite technical. It requires the sorts of skilled people that Australia is professing a desire to nurture and maintain. By letting the market decide the outcome of Australia’s one million manufacturing workers, the federal government’s laissez faire approach could be used to decide the outcomes of several other highly-contentious issues.
What else do Australian taxpayers subsidise?
- Fuel for miners and farmers (aimed at keeping the fleet new) $5 billion
- Multiple home ownership $30 billion
- Private health insurance
- Pharmaceuticals
Why do we choose to subsidise some things over others?
In deciding why some co-investment is necessary to facilitate business (such as in the food industry), governments have the ability to decide where capital can be best placed for the types of industries we want. It would appear that it doesn’t include the automotive manufacturing (and components) sector.
