The government should set up a venture capital fund and offer soft loans to assist the struggling manufacturing sector, according to the Australian Industry Group (AIG).
The Australian reports that the idea follows Toyota’s decision to follow the lead of Ford and Holden, and cease manufacturing cars in Australia in 2017.
The idea is contained in AIG’s submission to. The submission has been seen by The Australian.
According to the plan, soft loans would be given to companies with strong business plans and it would be hoped that the fund would develop into a self-sustaining venture capital market which would facilitate research and development.
Peter Burn, AIG's director of public policy told the Australian that similar venture capital funds operate elsewhere in the world.
"A lot of people are looking at Israel and what they do and saying 'That could work here'," he said.
The review of manufacturing in Victoria and South Australia was set up by Industry Minister Ian Macfarlane. It was set up in response to the decisions of Ford and Holden to end their local manufacturing operations in the near future and it is looking into the best ways to best spend $100 million in federal assistance.
Commenting on Toyota’s decision, AIG Chief Executive, Innes Willox said in a statement, "In relation to the impact on the broader manufacturing sector, the automotive assembly companies have long held key roles in the development and diffusion of technological, process and design-led innovation in Australia...”
He added, "Ai Group will continue to participate actively in the development of a constructive and forward-looking policy response to reinvigorate Australia's industrial base for the long term."