Home > Stop subsidising car makers, says FMG chief

Stop subsidising car makers, says FMG chief

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Fortescue Metals Group’s CEO Nev Power has told a business event that subsidies to car makers should end, recommending that Australia stop pandering to special interest groups or risk ending up like Greece.

Power, the keynote speaker at the Committee for Economic Development of Australia (CEDA) event titled “Resource Investment – Where to from here?”, urged the government to stare down the auto industry and unions.

"Beware of special interest groups that come looking for subsidies or protection; that will tear our economy down," he said, according to The Australian.

Power, formerly an executive at Smorgon Steel, made his comments as the federal government awaits a Productivity Commission report on subsidies the car makers. Holden has requested further assistance, and some have interpreted the recent refusal of the regional head of General Motors (Holden’s parent company) to meet the federal government as a sign it plans to cease manufacturing in Australia.

"If we start living in an environment where we expect entitlement, then we'll end up looking like Greece eventually."

Power claimed that passenger vehicles made up only a tiny part of the total auto industry.

"Why is the car industry different to any other industry?" he asked.

It has not been reported that Power made any comparisons to his own industry, which, according to a report by left-leaning think tank The Australia Institute received over $4.5 billion in subsidies in 2012, up by $492 million from the previous year.

Power also said wage expectations for mining jobs needed to be lower

"There is this expectation all around Australia, and perhaps the world, that if you come to Western Australia you can get $100,000 to drive a truck," he said.

"We need productive labour, we need efficient labour, we need labour that can add true value."

Image: http://saysomething.org.au

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