The Minister for Innovation, Industry, Science and Research, Senator Kim Carr, today announced a comprehensive review of Australia's automotive industry to be conducted by Mr Steve Bracks.
The establishment of the review recognises the importance of the industry and reflects the Government's determination to ensure its long term viability and sustainability.
"The automotive industry is strategically vital to Australia in terms of employment, exports and innovation," Senator Carr said.
"The environment our vehicle and component makers operate in has changed dramatically over the last ten years, but the previous government was asleep at the wheel.
"What is now needed is a full, open and frank assessment of the challenges currently facing the sector.
"This review will be about working with the industry to overcome barriers to success and to identify and take advantage of new opportunities," Senator Carr said.
"The review will particularly consider the impact of global concern about climate change on the industry and the impact of changing consumer vehicle preferences. This will help to inform the implementation of the Government's $500 million Green Car Innovation Fund.
"The future of the industry is dependent on attracting investment, building up skills, encouraging research and development and ensuring that government programs are effective and efficient. The Automotive Competitiveness and Investment Scheme is an important element of government policy. The review will assist laying down a new set of principles to make the industry sustainable into the future," Senator Carr said.
Mr Bracks will be supported by an expert panel comprising:
- Mr Tim Harcourt (Chief Economist, Australian Trade Commission);
- Mr Peter Upton (former CEO, Federation of Automotive Products Manufacturers);
- Dr Elizabeth Webster (Principal Research Fellow, Melbourne Institute of Applied Economic and Social Research); and
- Mr Nixon Apple (Industry and Investment Policy Adviser, ACTU).
Sitting fees for panel members will be set according to standard Remuneration Tribunal scales.
Senator Carr said Mr Bracks had established an enviable track record as Premier of Victoria, where he provided strong leadership on innovation issues and worked tirelessly to encourage research excellence and to facilitate closer ties between the scientific and research communities.
"Steve Bracks' extensive international experience means he is ideally suited to sort the wheat from the chaff in this very complex area.
"The Australian Government is pleased to secure the services of such a well respected figure who is so knowledgeable and passionate about innovation policy," Senator Carr said.
The review will consult widely with stakeholders and will be calling for public submissions. It will provide an interim report to the Government by 31 March 2008, with a final report to be completed by 31 July 2008.
The automotive review will take place concurrently with the recently announced review of Australia's national innovation system and will have regard to the issues raised in that review.
The Government will separately request the Productivity Commission to undertake modelling on economy-wide effects of future assistance options. The Commission's modelling will be released publicly to inform the panel's examination of the industry, public debate, and the Government's deliberations in this area.
Terms of Reference for the review are below.
For more information on review, visit the Department of Innovation, Industry, Science and Research's Automotive Review page.
Media Contact: Catriona Jackson, Minister's Office, 0417 142 238
TERMS OF REFERENCE FOR THE REVIEW OF THE AUSTRALIAN AUTOMOTIVE INDUSTRY
1. The Australian automotive industry plays an important role in employment, exports and innovation in the Australian economy. In particular, innovation in the automotive industry results in significant spillover effects across the economy, and particularly the manufacturing sector. In this context, the Australian Government has commissioned a high level review panel to conduct a review of the automotive sector, in consultation with a broad range of industry stakeholders. This review is to take place concurrently with a wide-ranging review of Australia’s national innovation system and should have regard to the issues raised in that review.
2. The review will bear in mind the Government’s desire:
a. for an internationally competitive and globally integrated automotive manufacturing sector; and
b. to optimise the overall economic performance of the Australian economy, including limiting price impacts on Australian
consumers and businesses.
3. The review is to report on key outcomes of the current policy settings for the automotive manufacturing sector, including:
a. an evaluation of the key outcomes of the Automotive Competitiveness and Investment Scheme (including an assessment of the impacts on each of the four categories of participants in the Scheme);
b. an assessment of the legislated passenger motor vehicle tariff reductions, taking into account the global automotive sector and general trade environment; and
c. an assessment of current and prospective trade obligations arising from Australia's multilateral, regional and bilateral commitments.
4. The review will evaluate the appropriateness of the Automotive Competitiveness and Investment Scheme (ACIS) in the
current competitive environment in relation to:
a. the possible retargeting of assistance within ACIS; and
b. investigating, identifying and evaluating possible alternative assistance mechanisms, consistent with Australia’s international trade obligations.
5. The review will also make an assessment of the challenges and opportunities currently facing the sector, including
how those challenges and opportunities might impact on the long-term viability and sustainability of the sector.
In making this assessment, the review should take account of factors such as:
a. the strengths and weaknesses of the sector;
b. recent developments and expected future developments and conditions in the global automotive sector, including:
i. opportunities for, and barriers to, enhanced global integration;
ii. competition for investment in the global sector; and
iii. progress on trade liberalisation (including free trade agreements) in the automotive sector in both existing and prospective export markets for Australia.
c. the impact of climate change and changing consumer preferences towards low emissions and fuel efficient
vehicles; and
d. other possible hindrances to the viability of the sector on both the demand and supply sides, such as exchange
rates, petrol prices, skill shortages and other environmental issues.
6. The review will make recommendations on any of the issues identified, including:
a. measures to boost innovation in the sector and to take advantage of the highly innovative nature of the automotive
industry;
b. measures to ensure that suitably skilled people are available and that fair working practices are guaranteed;
c. the impact of climate change policy on the automotive industry;
d. the delivery of the Australian Government’s Green Car Innovation Fund from 2011;
e. facilitating leadership among Australian automotive producers and component suppliers in developing and adapting
fuel efficient technologies and know-how in the production of motor vehicles in Australia; and
f. improving Australian companies’ access to global supply chains and export markets.
7. The review is to provide an interim report to the Government by 31 March 2008 and a final report by 31 July 2008.