NO.103

Government Announces Auto Industry Review

The Treasurer, Peter Costello, and the Minister for Industry, Tourism and Resources,

Ian Macfarlane, today announced an inquiry into the automotive industry to inform

government decision-making on policy arrangements to apply after 2005.

During the election, the Government promised to initiate as soon as possible

a major inquiry into post-2005 assistance measures for the Automotive industry.

This announcement fulfils the commitment.

“The Government will be referring the inquiry to the Productivity Commission

to make findings about the automotive industry and its prospects and to set

out options the Government might consider for the future ” Mr Costello

said. “We appreciate the industry has long lead times for investment and

is seeking certainty about future arrangements. The Government remains committed

to lowering automotive tariffs in 2005. The terms of reference for the inquiry

will refer to Australia’s APEC commitments and its obligations under the WTO.”

An Associate Commissioner, selected on the basis of business experience, will

be appointed to the inquiry.

The Government also announced the formation of an Automotive Council by restructuring

and expanding the focus of the present Automotive Trade Council. The new Council

will comprise major automotive industry participants and will report on pertinent

issues concurrent with the inquiry. The Automotive Trade Council presently advises

the Government on matters affecting trade for the industry and will continue

to do so in its new expanded role. The Council will be co-chaired by the Minister

for Industry, Tourism and Resources and the Minister for Trade.

“I will be looking to the Automotive Council to provide an industry perspective

on the issues. The automotive sector is a major Australian industry, employing

about 50,000 people and generating about $4.6 billion in exports. The Government

is committed to developing an internationally competitive automotive sector

in Australia. ” Mr Macfarlane said.

The Productivity Commission will commence the inquiry in January 2002. The

terms of reference and the membership of the inquiry will be released at that

time. The Commission will be required to report its findings and recommendations

to the Treasurer within six months.

Media contact: Malcolm Roberts, Mr Macfarlane’s office, 0417 667 416

David Alexander, Mr Costello’s office, 0418 210 601