PC Findings |
Government Response |
Impact of Automotive Assistance
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Analysis noted. |
Considerations Bearing on Future Assistance Arrangements
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Analysis noted. |
Post 2005 Tariff and ACIS Options
Of these options, the Commission's preference is for option 2.
A. Up to $2 billion in funding allocated equally across two separate capped pools - one for vehicle producers and one for their suppliers - provided over five years, ceasing in 2010. B. Funding with an equivalent net present value to option A, allocated in the same way provided over 10 years at a uniform rate, ceasing in 2015. C. Funding with an equivalent net present value to option A, allocated in the same way, provided over 10 years ceasing in 2015, with funding for the second five-year period set at half that for the first five-year period. All of these options would involve continuation of the vehicle producers' uncapped production credits until 2015, at which time an assessment could be made about whether such payments should be terminated and the industry afforded access to the Tariff Concession System (if still relevant). Also, the overall cap on funding to individual firms (5 per cent of sales) that applies under the current regime would be retained. Of these options, the Commission's preference is for option A funded at $2 billion (excluding vehicle producers' uncapped production credits).
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Tariffs are being reduced from 15 to 10 per cent in 2005. The Government will reduce PMV tariffs from 10 to 5 per cent in 2010. The Government will provide a ten year program of budgetary assistance of about $4.2 billion comprising uncapped ACIS duty credits estimated at $1.2 billion, along with capped ACIS assistance of $2 billion to be spread evenly over the period 2006 to 2010, with phase-out arrangements for this capped assistance of $1.0 billion over the period 2011-15. The Government will establish from the vehicle producers' portion of the ACIS budget a Research and Development fund of $150 million over 2006-8 to support key technologies put forward by vehicle producers that warrant specific encouragement. The Productivity Commission will undertake a further inquiry in 2008 to determine whether changes are warranted to the legislated tariff reductions in view of conditions in the international trade environment. |
Other Assistance Matters
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The Government will retain the $12,000 tariff on second hand vehicles. The Government agrees in principle with the removal of the 3 per cent revenue duty imposed under the Tariff Concession System and will remove it as soon as appropriate, having regard to the fiscal strategy and competing priorities. The Government will not implement a successor to the Automotive Market Access and Development Strategy. Information on the Commonwealth Government's support for the automotive industry can be found on the website of the Department of Industry, Tourism and Resources at: www.industry.gov.au. The Commonwealth Government agrees that protocols to limit State Government `bidding wars' would be desirable, noting that this is a matter for State Governments. |
Adjustment Issues
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Analysis noted. |
Workplace Arrangements and Industrial Relations
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Analysis noted. The Government agrees that there is scope to improve productivity through greater co-operation and implementation of more productive workplace relations arrangements in the automotive industry. The Government notes that the industry has committed to create an Industrial Relations committee that will provide managerial and mentoring support in conjunction with legal and financial assistance in the event of illegal industrial action. |
Skilling and Training
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In the VET sector, the Commonwealth is determined to ensure that Training Package content and development timeframes are consistent with Industry requirements. The Australian National Training Authority (ANTA), through its National Training Quality Council (NTQC), is regularly examining ways in which the development process can be accelerated, consistent with maintenance of quality standards and the need for adequate consultation. Proposals for the continuous improvement of Training Packages are being developed for consideration by the NTQC at its December 2002 meeting. The Australian National Training Authority (ANTA) is undertaking a comprehensive review of industry advisory arrangements for the VET sector. ANTA has employed the Allen Consulting Group to seek views of industry stakeholders and to develop options for future industry advisory arrangements. DEST is participating in this review. |
Taxation
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Not accepted. The Government considers the current luxury car tax threshold and indexation mechanism are appropriate. Payroll tax and stamp duty on vehicle sales and transfers are State taxes. Any changes to these taxes are a matter for the States. |
The Supply of Infrastructure Services
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The Government, in consultation with the States and Territories, will respond to the recommendations of the COAG Energy Market Review in due course. |
R&D Support Measures
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A high level committee comprising the Prime Minister, the Minister for Industry, Tourism and Resources, the Minister for Communications, Information Technology and the Arts, the Minister for Education, Science and Training, and the Minister for Finance and Administration is overseeing the implementation of Backing Australia's Ability. An annual progress report is being provided in the Innovation Report. Regular review mechanisms are also in place for key programs such as the Australian Research Council, R&D Start, the Cooperative Research Centres program and the R&D tax concession. The Government will consider the need for a broader independent review once the programs in Backing Australia's Ability have been in place over a longer period. |
Vehicle and Related Standards
Fuel Consumption Targets
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The Government will consult industry as part of any environmental policy processes materially affecting them. The Government does not consider it appropriate to respond on these important issues in the context of a response to the passenger motor vehicle inquiry. Policies relating to motor vehicles and the environment will be determined as part of broader environmental policy processes. In the context of its response to the recommendations of the Chemicals and Plastics Action Agenda, the Government has committed to continuing to work with industry to ensure the most efficient regulatory system is in place for industrial chemicals, that is, a system that does not inhibit the introduction of new and safer chemicals. |
Market Access
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The Government will continue to pursue reductions in market barriers for Australian businesses, including automotive manufacturers, utilising bilateral, WTO and APEC processes. |