02-February-2012
Portfolio Media Releases
Topics: manufacturing industry policy, carbon tax, Labor’s record budget deficits, exchange rate.
E&OE
MARIUS BENSON:
Andrew Robb the Shadow Ministry is looking at industry policy today and today also Holden is expected to be announcing hundreds of job losses, does that make you review your decision to stand by the policy which will cut half a billion dollars in assistance to the car industry?
ANDREW ROBB:
No it doesn’t, I mean our decision has been to maintain total consistency. We are going to contribute something in the order of $1 billion which is a very serious amount of support and we will I think focus on many of the other areas that will assist manufacturing and the car industry in particular to stay competitive.
It’s of course Labor who’s cut $1.4 billion after all the talk they’re the ones who have cut the money and any ad-hoc assistance that Labor will give if it does give any more will be whipped out of course by the carbon tax.
MARIUS BENSON:
Are you saying that Labor has cut assistance to manufacturing industry that you believe is a mistake?
ANDREW ROBB:
Labor cut last year $1.4 billion from the car industry, not just manufacturing specifically from the car industry …
MARIUS BENSON:
And is that $1.4 billion the intention of the Opposition to restore that assistance?
ANDREW ROBB:
No, our commitment was to stay true to the agreement which the Howard government reached with the car industry, much of which has already been spent, but there is still a remaining $1 billion through to 2015, now that is a huge amount of assistance and it is a serious and necessary commitment.
MARIUS BENSON:
The Opposition stresses the impact of the carbon tax but the industry itself, the motor industry itself says it is the high Australian dollar which is causing these job losses now not the carbon tax.
ANDREW ROBB:
Well the carbon tax is not in yet but what the government is foreshadowing is that in the middle of this year it is going to add another $400 per car to the cost of every car.
MARIUS BENSON:
You stressed the carbon tax but I was just speaking to Ian Chalmers the chief executive of the car industry body and he agrees with your figure that it will add $400 per vehicle but he says that’s not going to put the industry our of business, it’s not going to make a dramatic difference, the real issue is the high Australian dollar.
ANDREW ROBB:
What I am saying to you is the government can impact on the high Australian dollar, if the government started to reduce its spending, bear in mind that we are in the middle of this year the fourth largest deficit in the country’s history, budget deficit, after three other years, in four consecutive years are the four largest deficits in our history.
If the government was serious about reducing expenditure that would put a lot less pressure on interest rates, they wouldn’t be in the market every day for $100 million and that would in turn reduce the exchange rate, lower interest rates, less attraction for money to come into Australia, lower exchange rates.
Therefore the government can do something about the exchange rate but at the same time $400 per vehicle is a serious hit to the competitive position of our car industry.
That will save or that will cost, this carbon tax is going to cost thousands of jobs, tens of thousands of jobs across manufacturing and for Labor it’s incomprehensible, incomprehensible that Labor would at this point in time with all of this pressure coming to bear on manufacturing would seek to introduce a carbon tax which is not introduced anywhere else in the world, it’s madness.
MARIUS BENSON:
How much blame do you put on the government for the higher Australian dollar, how many cents in that more than parity dollar do you blame the government for?
ANDREW ROBB:
It’s difficult to assess, Access Economics made a calculation last year that for every $14 billion in excess of budget parity that it could affect interest rates by up to a per cent, now that in turn would affect the exchange rate quite significantly.
So the government having run up now $167 billion of budget deficits in four years and a debt of $136 billion clearly has put Australia’s interest rates amongst the highest in the world and must take some blame for the level of the exchange rate at this point in time.
MARIUS BENSON:
Andrew Robb, thank you very much.