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Fed funding increase for auto sectors 'modest but important'

30 April, 2014

An assistance fund enabling automotive industries in Victoria and South Australia steer their way through the planned mass exit of major car manufacturers has been increased to $155 million, a move which has been welcome by industry.

Announcing the funding increase on Wednesday (April 30) which was originally set at $100 million, Prime Minister Tony Abbott said it is to include matching $12 million contributions made by the Victorian and South Australian governments.

"This $155 million growth fund will include money for skills recognition, money for employment services, money to help businesses transition to new markets," Abbott told reporters.

"There will also be funding for businesses which are seeking to innovate and some limited funding for local infrastructure.

"The objective as always is to maximise prosperity, maximise employment, to build on the inherent creativity of businesses ... (and) it's about helping workers to go from good jobs to better jobs."

Australian Industry Group praised the federal funding initiative saying it had the potential to make a "real difference" to both business and employees in the sector, as well as their immediate supply chains, in a statement on Wednesday.

"Assisting these employees to find new jobs and undertake training to widen their opportunities will have positive social and economic impacts," Australian Industry Group Chief Executive, Innes Willox, said.

Opportunities for a smoother transition

Willox said while the measures while "relatively modest", were nevertheless important and proactive steps that will encourage businesses to find and develop new opportunities. These parts of the government's plan will also assist in providing the jobs that automotive employees can transition towards.  

"The job losses may be more widespread than government predictions. Based on feedback from our members and supported by ABS statistics, Ai Group's estimates that around 45,000 people are employed in motor vehicle and parts manufacturing. We hope the government will remain open to providing further transitionary support should it be required," he said.

"What is happening in the auto sector is in reality a microcosm of the broader issues facing the Australian manufacturing sector. While this sector has traditionally attracted government support, other parts of the economy can also benefit from a concerted effort to lift workforce skills, business capabilities and business innovation.

"The identification of potential economic growth sectors is welcome. The development and implementation of coherent and long term policy drivers at a federal and state level to promote this growth will be vital to their success."

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