Wednesday, June 11, 2008

Taxpayers To Fund Cars That Were Going To Be Built Anyway

It’s ironic and possibly even embarrassing to learn that the Toyota company was planning to build hybrid cars in Australia anyway, even before the Federal Government decided to give them any money. Nonetheless, the company will benefit to the tune of $35 million from the Federal Government’s Green Car Innovation Fund, along with a further $35 million from the Victorian state government. This will help to ensure that Australian workers keep their jobs, and expand the capabilities of Australian manufacturing. But if
Toyota was going to build the car anyway, is the taxpayer getting any value from the investment or is it a waste of funds?

Having made the investment in Toyota’s program, does this mean that other car manufacturers might be able to expect a similar investment if they also decide to build hybrid or other alternative energy cars in Australia? The Toyota plan involves using the existing hybrid drive system from the Prius in the mass produced Camry. Will this funding give Toyota an unfair advantage in selling vehicles using its existing hybrid technology as opposed to other manufacturers developing newer and more efficient technologies?

The opposition claims that this announcement is nothing more than an attempt to look as if it is addressing both environmental and petrol price issues, while doing nothing more than wasting money on existing technology in a product that would have been produced here anyway. In addition to that, if I was one of the Holden Engine Company employees in Melbourne about to lose my job I would be asking why some of that money isn’t being invested in assisting Holden to produce new engine technology and protecting Australian jobs that under threat right now.

Of course, the Green Car Innovation fund totals $500 million dollars and it remains to be seen how and where the rest of it will be invested as it becomes available. Australia’s automotive industry has already survived massive challenges, but the greatest challenge, that of new engine technology, is still ahead of us. If the government is going to meet that challenge then simply investing in existing technology is not going to be enough.

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