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>> 13/July/2011 - Carbon Tax Impact On Car Industry Competitiveness

Andrew McKellar

FCAI Chief Executive Andrew McKellar

The Federal Chamber of Automotive Industries (FCAI), has warned that the proposed carbon price will add to industry costs and undermine competitiveness.

"Our analysis indicates that the initial carbon price of $23 a tonne will result in increased costs to local automotive manufacturers of more than $30 million a year," FCAI chief executive Andrew McKellar said.  

"A cost increase of this magnitude will further undermine the competitive position of local manufacturing making it harder to secure future investment.

"We are also concerned the future costs to the automotive industry will be even higher when proposed arrangements for the treatment of air conditioning gases are taken into account and if the economy moves to a fully-traded scheme too quickly," he said.  

Mr McKellar said the carbon price came on top of other factors, like the high Australian dollar, and would put additional competitive drag on the industry.

"We support the objective of reducing carbon emissions reductions but we are disappointed the Government has failed to ensure trade-exposed industries like automotive manufacturing are adequately compensated for increased costs," he said.

"If Australia wants to maintain a diverse economy with a high-tech automotive industry we need to secure ongoing investment in future automotive design, engineering and production programs.

"Australia needs to take an internationally competitive approach to policy that supports industry and government co-investment and not penalise companies that invest in automotive capability in this country.

"We urge the Government to re-think its approach and to work with industry to ensure these concerns can be addressed before legislation is finalised," said Mr McKellar.

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