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Industry welcomes 'long-awaited' automotive funding decision

10 March, 2015

The Australian Industry Group has welcomed the "sensible decision" by the Federal Government to maintain $500 million in vital funding to the automotive industry to 2017 through the Automotive Transformation Scheme, as the component suppliers transition towards new opportunities.

"The decision will help ensure the supply chain across the automotive industry can remain intact. Without continued funding, there was a very real risk that all automotive assembly in Australia would have ended well before the final dates announced by Ford Australia, GM Holden and Toyota," said  Ai Group Chief Executive, Innes Willox.

"Over the past 18 months, the Australian Industry Group has expressed its strong concerns to the Government, the Opposition and Senate crossbenchers around the Government's proposed withdrawal of $500 million allocated to facilitate the transition of Australia's automotive sector and the automotive supply chains.  

"As a matter of principle government funding approvals and commitments that have already been made must be honored in the interests of promoting trust and certainty in government policy.

"Honoring such funding commitments are especially important in the auto sector where component suppliers in the automotive industry need the time and opportunity to reorient towards new markets and products before the planned closure by the car assemblers in 2017.

"The businesses and the employees in automotive supply chains are a valuable part of Australia's industrial ecosystem. They have important roles to play in the restructuring of the Australian economy as we build a stronger and more resilient foundation that is less reliant on the investment in mining and energy projects and the high commodity prices that have featured so prominently in the last decade.

"However, the challenges within the industry mean there is a need for substantial reorientation of the design of the Automotive Transformation Scheme to ensure those businesses who can continue to operate can do so. Ai Group believes this reorientation of the ATS must be finalised as a matter of urgency especially given the weakening economic conditions in Australia," Willox said.

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