Dolly Shorten is banging on about this point – every other country with a car industry provides subsidies and our subsidies are the lowest of them all. A figure of $US 17 per capita is trotted out for Australia compared with $US 264 in the US (which would amount to about $23,000 per car in Australia).
As you all know, I am firmly in the “if it looks wrong, it is wrong” school and so I went to the PC position paper on automotive manufacturing to find out the truth (the PC is really good at this sort of thing).
Here is the PC’s caution:
In the Commission’s view, care should be taken when comparing assistance arrangements across countries. As has been evident from the Commission’s research for this inquiry (and its previous work), and from analyses undertaken by
others (box 2.7), the feasibility of robustly quantifying and comparing assistance levels across countries is doubtful.
But go to page 61 of the position paper and you will find out where the $17 and the $264 figure come from. For starters, a crazy year was selected – 2009 during the GFC. And then the authors simply add up all sorts of different types of assistance (loan guarantees, cash grants, general industry assistance) to get the final figures. And why use per capita as the basis of the comparison – per vehicle makes much more sense.
When the figures were reworked on a more sensible basis, the comparison of government assistance rates across countries is completely reversed.
Australia has the highest rate of budgetary assistance to the automotive industry at $US 1885 per vehicle, with the next closest Sweden at $297 per vehicle. In point of fact, the figure for the US came in at only $166 per vehicle and Germany at $206 per vehicle.
Dolly may need to actually read something on this topic before he sounds off anymore.