Prime minister Tony Abbott has announced strategic reviews of the South Australian and Victorian economies and $100 million in support for workers in response to Holden’s decision to end its Australian manufacturing operations in 2017.
Abbott announced the $100 million in assistance for sacked workers, made up of $60 million in federal money, $12 million from Victoria, a similar amount from SA and, he hoped, $20 million from Holden.
SA and Victoria would, starting immediately, have their economies reviewed to assess where local capabilities lay. Both reviews would be chaired by industry minister Ian Macfarlane and include MPs and local industry leaders.
The “state-specific” findings of the reviews would be presented to the federal government in February 2014.
“To support the reviews, the Federal Government’s response will include the development of a $100 million growth fund to support economically responsible initiatives in regions facing pressure in their manufacturing sectors,” said Abbott in a joint statement with Macfarlane.
The $100 million would be administered by the Department of Industry, beginning in 2014/15.
Opposition leader Bill Shorten called the plan “woefully inadequate,” News Corp reports.
"It shows a Prime Minister who continues to treat workers and businesses in the automotive sector with absolute contempt," he said.
"Holden is leaving Australia after 65 years and the responsibility for this sits squarely with Tony Abbott and his government."
Also part of today’s announcement was the development of a National Investment and Competition Agenda, covering areas such as regulation and energy costs, commercialisation, infrastructure, and encouraging SME growth. The announcement can be read here.
As The Australian Financial Review and others note, the announcement made it clear that generous subsidies were not a part of the federal government’s agenda.
“The Government understands that the best thing we can do for business in Australia is to reduce costs and lower taxes,” said Abbott.
“No country has ever taxed its way to prosperity. Similarly, no country has ever subsidised its way to prosperity.”
The Australian Industry Group approved of announcement, calling it a “forward looking” response to the end of manufacturing in 2017 for Holden, the year after Ford will close its Australian factories.
“Ai Group has been arguing for some time that the primary emphasis of industry policy must be on building opportunities for new industrial directions and ensuring we develop the capabilities to take advantage of these opportunities,” said CEO Innes Willox in a statement.
Willox also said one of the important considerations that needed to be addressed was linking researchers to business effectively.
“A key part of the forward-looking agenda must be to forge closer and more effective two-way links between Australia’s research and business communities,” he said.
“We have tremendous capabilities in scientific research and in our business schools that are currently not interwoven with the commercial world. Addressing this shortcoming will build new sources of competitive advantage.
Image: Australian Financial Review