PM Julia Gillard rejects calls to raise import tariffs as car industry struggles for survival after Ford closure

Updated

Prime Minister Julia Gillard has stared down backbench calls for an increase in tariffs on imported cars in the wake of Ford's decision to shut down its Australian plants.

Labor backbenchers Darren Cheeseman, Nick Champion and Doug Cameron say an emergency increase is needed to save the domestic car industry.

Key points Gillard rejects calls for higher tariffs on imported cars

ACTU says emergency talks needed to save industry

Focus on keeping Holden, Toyota in Australia

Holden boss flags call for more government cash

Australia currently has a 5 per cent tariff on imported cars and Ms Gillard says it will not be going any higher.

"I would rule that out. I don’t think that that's going to assist our manufacturers in the long term," she said.

"I don't believe that imposing tariffs and getting in the way of us being able to be an exporting nation by potentially sparking trade reprisals is the right strategy for Australia."

Mr Champion wrote a weekend opinion piece advocating for the tariff to go as high as 10 per cent for as long as the dollar remains above 94 US cents.

Senator Cameron said he knew the prospect of increasing tariffs would "shock and horrify" some of his Labor colleagues, but added: "There comes a time where you've got to put the national interest before your economic ideology."

"There's a real need for a bit of economic nationalism in this country," he added.

Mr Cheeseman, who represents many Ford workers, is demanding the company makes a big contribution to the $39 million structural adjustment fund set up by the Commonwealth and Victorian governments.

"Ford should contribute between $10 and $15 million to the immediate crisis that we face in recognition of the hardship and the suffering that will be created for Ford workers as a consequence of their decision," he said.

Ms Gillard also expects Ford to contribute to the fund.

"To the best of my advice, Ford has made no announcement as yet about a payment into that fund and I would once again say to Ford, I think Ford has an obligation to these communities to contribute and to contribute generously to this fund," she said.

ACTU calls for emergency talks to save industry

Ms Gillard has agreed to meet the Australia Council of Trade Union's (ACTU) request to set up talks between Government, industry and unions to discuss the future of the industry.

She says the meeting will be convened around her taskforce on manufacturing.

The Government says Trade Minister Craig Emerson, who is acting as Industry Minister, will talk to stakeholders to draft an agenda.

The focus is now on making sure Holden and Toyota do not also end up as car importers.

The ACTU is warning the 1,200 job losses at Ford could jeopardise up to 10,000 manufacturing jobs.

Ford should have exported cars says Trade Minister Emerson

While acknowledging the effect of a strong dollar, Dr Emerson said Ford had made a serious mistake by focusing on the domestic market.

"Any company that does not have exporting as part of its business model is in trouble," he said.

Sorry, this video has expired Video: Craig Emerson speaks to ABC News Breakfast (ABC News)

"Ford has not sought any further Government assistance. No matter which way Ford looked at it, any Government assistance was not going to get it across the line beyond 2016."

Former prime minister Kevin Rudd has told Channel 7 the Ford decision marked a black day for Australian manufacturing.

"It's part of who we are as Australia: we make cars; we manufacture things," he said.

"And I'm pretty disappointed in Ford's decision given all the support from all sides of politics over many decades."

There is no shortage of ideas on how to rev up the industry. Independent MP Bob Katter wants the state and federal governments to buy Australian-made cars.

But Dr Emerson says that would still not "achieve the sorts of economies of scale that Ford would need to do if it was to able to compete successfully against the imports and on international markets."

Opposition says tariff increase would be backwards step

Opposition industry spokeswoman Sophie Mirabella says a tariff increase would be a retrograde step and invite retaliation.

"We are a trading nation, we need to be able to export our goods," she said.

Opposition Leader Tony Abbott has told Triple M low tariffs ensure choice.

"The reason why people buy foreign cars is because we like variety," he said.

"There's four or five locally made models but there's 370 odd models on sale, so the public want the variety that motor imports give them," he said.

Opposition frontbencher Malcolm Turnbull has told Channel Nine the Government has made Australia less competitive through new taxes and less flexible workplace laws.

But he also says the Coalition's car industry plan is essentially the same as Labor's.

"We've committed $500 million less - that is the difference. But I don't think anyone imagines that's going to make the difference between success or failure," he said.

Holden flags approach for more government money

Holden's managing director Mike Devereux has flagged another approach to government for assistance after news that Ford will close its plants.

Holden recently announced it would cut 400 jobs at its Elizabeth production plant in northern Adelaide, despite receiving a $215 million support package from the Federal Government.

Mr Devereaux says Australia's input costs, including wages and other costs such as electricity and land costs, are too high.

"High costs, low tariffs makes for a tough equation," he told ABC local radio.

"Electricity costs more in this country. A can of coke costs more in this country. A piece of dirt to put a coffee shop (on) costs more in this country than it does in many other places.

"Input costs across the equation in Australia are much higher than other places, particularly if you look at input costs on raw materials."

Shocked but not surprised Ford workers say the announcement the company will close local manufacturing plants is a sad day for Australia. Ford Australia to close Ford confirms plans to cease local manufacturing operations by 2016, with 1,200 jobs becoming redundant. 'Communities will be gutted' The AMWU says Ford's 2016 cessation of manufacturing at its Broadmeadows and Geelong plants will cause "serious problems" for working families in the area. Ford's focus questioned Phillip Lasker discusses Ford's decision to shut down its Australian manufacturing operations. Ford communities fund PM announces fund for Geelong and Broadmeadows communities that will be hit by the Ford closure. 'Black day for manufacturing' Opposition Leader Tony Abbott says Ford's decision to end local manufacturing in 2016 is devastating.

Topics: manufacturing, industry, business-economics-and-finance, automotive, trade, government-and-politics, elections, federal-government, broadmeadows-3047, australia, vic, melbourne-3000, elizabeth-5112, sa, geelong-3220

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