The paper "The Automotive Manufacturing in Australia " is a great example of a business case study. Motor vehicles in Australia provide mobility and independence to families and society in the whole country. Therefore, this paper will explain the government-business relationship in the Australian car manufacturing industry. It will also answer the question if the government made the right decision by not supporting the struggling industry financially. The car industry is central to the economy and the Australian way of life. The motor industry turns Australia’ s aluminium and steel into valuable goods that are sold all over the world.
The industry is the leading contributor to the country’ s economy and the community. The motor industry is the highest employer, and it is also the leader in innovation with magnificent investment in research and development. The Australian automobile industry invented advanced safety technologies like electronic stability control. The industry is considered as the highest employment contributor in the whole country since over 4,000 people are employed directly and indirectly in manufacturing, servicing, repair, logistics and retail (Federal Chamber of Automotive Industries, 2010). The level of government assistance in many manufacturing industries differs in many countries especially in developing countries, but most share some common factors like declining government support like trade barriers, but they still maintain some extent of industrial support.
In the year 2,004 to 2,005, the government provided 6.9 billion dollars as manufacturing support which is equivalent to 7.2 percent of the total contribution to the country’ s GDP (Bracks, 2008). The Australian government is moving more towards the non-financial assistance and leaning more on the market is driven support, though there are some discrete industrial assistance programs that have been created to help the manufacturing industry (Mackay, 1993). The government protected the automotive industry through tariff and non-tariff barriers and as tariffs progressively reduced.
The industry received assistance through co-investment measures, production subsidies, and grants. Assistance is also rendered through taxation arrangements which favored luxury car productions and also through government purchasing policies. Like other automotive producing nations, the Australian government has assisted the industry in recognizing the spillover benefits it delivers in manufacturing and technological know-how and its importance to the regional economies.
The industry was also able to enjoy accessible skills and employment programs for its employees, support for investment in research and export facilitation (Productivity Commission, 2002). The automotive manufacturers in Australia announced that they intended to stop production of cars in the year 2017. These companies are Ford, Toyota, and Holden. The automotive business is known to have a long history of government support. However, as the tariff assistance declined in the car industry since 1984, some specific budgetary actions to assist the industry in making some adjustments were taken into consideration.
The productivity commission in a statement said that the ongoing support to the automotive manufacturing industries was not warranted (Productive commission, 2014). Among the programs which were assisting the Australian Automotive industry for the year 2008-2014 is the Automotive Transformation Scheme (ATS). ATS main agenda was inspired by reasonable and competitive investment and innovation. In the 2014 to 2015 budget, the government made a decision to dismiss ATS at the beginning of the year 2018. Termination of the program will save the state millions of shillings by not proceeding with the funding, of Holden’ s next future generations projects as well as Ford Australia- assistance to workers program.
The government announced that they would open a grown Fund in support of new jobs and investment programs to employees after the closure of automobile manufacturing facilities (Productive commission, 2014).
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