A NEW CAR PLAN FOR A GREENER FUTURE doc

A NEW CAR PLAN
FOR A GREENER FUTURE

A NEW CAR PLAN
FOR A GREENER FUTURE
© Commonwealth of Australia 2008
ISBN 978-0-642-72554-7
This work is copyright. Apart from any use as permitted under the
Copyright Act 1968
, no part may be reproduced by any process
without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be
addressed to the Commonwealth Copyright Administration, Attorney General’s Department, Robert Garran Ofces, National Circuit,
Canberra ACT 2600 or posted at />PRIME MINISTER’S FOREWORD 1
MINISTER’S FOREWORD 3
EXECUTIVE SUMMARY 5
WHY A NEW CAR PLAN? 7
THE DETAILS 9
THE GOVERNMENT’S RESPONSE TO THE REVIEW OF 13
AUSTRALIA’S AUTOMOTIVE INDUSTRY

CONTENTS

| 1
Our rst car took to the road as early as 1897, when David Shearer demonstrated his steam-driven horseless
carriage in South Australia. Yet it would be two generations before the rst 48-215 Holden came off the line in
1948, and motor vehicle production began in earnest.
That’s a measure of how hard it is to establish an automotive industry, and a reminder of why Australian
governments have dedicated themselves to ensuring that we remain a car-making country.
In the past, governments have tried to protect the industry with tariffs and quotas. The Button Plan of the
1980s showed there was a better way. If we want the Australian car industry to prosper, we have to make it
stronger — more innovative, more productive, more

competitive and more export-focused. That’s what
A
New Car Plan for a Greener Future
aims to do.
Australia is one of only about fteen nations in the
world today that can create a car from scratch —
taking it from the drawing board to the showroom
oor. And because the modern car integrates just
about every advanced technology we use, from
microchips to composite materials, being able
to build cars means being able to build lots of other things as well. That’s why the automotive sector is a
cornerstone of Australian manufacturing.
A New Car Plan for a Greener Future
is a plan for reinventing the Australian car industry. It is about preparing
the industry for a low-carbon future and making it indispensable to global markets and supply chains. It will
ensure that car-making goes on contributing to Australia’s prosperity.
PRIME MINISTER’S FOREWORD
The Hon Kevin Rudd MP
Prime Minister of Australia
The automotive sector is a
cornerstone of Australian
manufacturing.
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A New Car Plan for a Greener Future
is the most comprehensive plan ever devised for this vital sector of our
economy. It brings every player in the industry together in a partnership that will reshape the industry and
deliver enduring benets to all Australians.
This is a plan to reinvent the automotive industry. It gives the industry the certainty it needs to invest in the
vehicle technologies of tomorrow. It will reward research and development, innovation and productivity. It will

restore condence and promote new investment.
The Green Car Innovation Fund will receive a substantial boost in funding to encourage the development
and production of low-emission, fuel-efcient vehicles and components. The Automotive Transformation
Scheme will also focus on greening the industry, with participants required to demonstrate a commitment to
environmental sustainability.
Our aim is to bring about an historic transformation that
will prepare the industry for the future. We also aim to
address the urgent challenges facing the industry today.
That’s why we are encouraging consolidation in the
supply chain. This will enable us to retain capabilities
and jobs in Australia, while ensuring that those workers
who are displaced get the support they need to nd
new jobs.
On behalf of the government, I would like to thank
Steve Bracks for generously agreeing to conduct the
review which has led to this policy statement. Thanks also to the experts who supported him – Peter Upton,
Nixon Apple, Dr Elizabeth Webster and Tim Harcourt – and to the many individuals and organisations who
contributed to the review process.
A New Car Plan for a Greener Future
will provide $6.2 billion in assistance over thirteen years. It will revitalise
an industry that is critical to the Australian economy and the Australian community. It demonstrates the
government’s commitment to manufacturing, its commitment to innovation, and its commitment to providing
Australia with high-quality, high-skill, high-wage jobs.

MINISTER’S FOREWORD
Senator The Hon Kim Carr
Minister for Innovation, Industry,
Science and Research
Our aim is to bring about
an historic transformation

that will prepare the
industry for the future.
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ExECUTIvE SUMMARy
A New Car Plan for a Greener Future
is the Australian Government’s plan to give our automotive industry
the policy certainty it needs to get through today’s difcult times, to invest in the future, and to put itself on a
sustainable footing.
The automotive industry worldwide has been affected
by the global economic crisis, but it also faces longer-
term challenges, including more intense competition
and rising environmental expectations. Fuel prices are
increasing and consumer preferences are changing.
The Government’s new car plan will help the industry
adjust to a more open trade environment and shift to
producing vehicles and components with lower fuel
consumption and greenhouse gas emissions. It will help
maintain employment and create new job opportunities
in emerging growth areas. This is transitional assistance.
While the government has recognised the scale of the
transformation required by extending support to 2020, our
ultimate goal is that the industry should be self-sufcient.
Accordingly, assistance will be phased out over time.
A New Car Plan for a Greener Future
consists of:
a new, better targeted, greener assistance program, 
the Automotive Transformation Scheme (ATS), running from 2011 to 2020 and providing $3.4 billion to the
industry;
an expanded Green Car Innovation Fund of $1.3 billion brought forward to 2009 and running over ten years; 

changes to the Automotive Competitiveness and Investment Scheme in 2010 to smooth the transition to 
the ATS ($79.6 million);
$116.3 million to promote structural adjustment through mergers and consolidation in the components 
sector (from 1 January 2009) and facilitate labour market adjustment (from 1 November 2008);
$20 million from 2009–10 to help suppliers improve their capacity to integrate into complex national and 
global supply chains;
$6.3 million from 2009–10 for an enhanced market access program; 
a new Automotive Industry Innovation Council, bringing key decision makers together to drive innovation 
and reform; and
a $10.5 million expansion of the LPG vehicle scheme, to start immediately, that doubles payments to 
purchasers of new private use vehicles that are factory-tted with LPG technology.
While the Government
has recognised the scale
of the transformation
required by extending
support to 2020, our
ultimate goal is that
the industry should be
self-sufcient.
6 | A NEW CAR PLAN FOR A GREENER FUTURE
The legislated reduction of the automotive tariff to 5 per cent will go ahead as planned in 2010. Matching
the world’s best on tariffs will prepare the Australian industry for competition in an increasingly open global
market.
A New Car Plan for a Greener Future
is designed to make our automotive industry greener and more
internationally competitive.
Participants in the Automotive Transformation Scheme will be required to demonstrate that they are aiming
for better environmental outcomes and building the capabilities needed to compete in global markets. The
Green Car Innovation Fund will help them achieve the rst objective, while the supply chain, market access and
structural adjustment initiatives will help them achieve the second.

A New Car Plan for a Greener Future
brings the total level of assistance to $6.2 billion between 2008–09 and
2020–21, of which $3 billion is already committed, and $3.2 billion is net new funding. The government expects
this assistance to stimulate industry investment of at least $16 billion in new capacity and new technologies –
not to mention billions of dollars in wages and salaries for tens of thousands of workers.
| 7
Making the automotive industry stronger is the key to securing the future of manufacturing in Australia.
Manufacturing employs a million Australians and accounts for a tenth of our GDP. We can’t have a balanced
economy without it – and we can’t have a just society without it either. Manufacturing is the mainstay of
families and the lifeblood of communities around the country. Car-making drives demand, sustains capabilities
and stimulates innovation across the manufacturing sector. In fact, it fuels activity across the entire economy,
using $8 billion worth of service sector inputs in 2004–05 alone. The automotive industry makes a huge
contribution – both direct and indirect – to Australian output, jobs, exports, innovation and skills. Its latent
signicance to national security – as a storehouse of industrial know-how and capability – is immeasurable.
A New Car Plan for a Greener Future
is a plan to ensure that we will go on enjoying these benets long into
the future.
It is a plan to attract new investment.
The
world is changing. Australia’s automotive
industry must change with it. Global warming,
the emergence of low-cost competitors,
and rising fuel prices have all altered the
landscape in which our vehicle and component
makers operate. The recent deterioration in
the international economy has compounded
these challenges. Our choices are simple –
our industry must either adapt to the new
environment, or face extinction. Adaptation
will require signicant investment in new

technologies, new capabilities and new
skills – investment that generates the kind of
sustainable, full-time jobs Australians want for
themselves and their children. We will only get
that investment if people believe the industry
has a future and are certain of the Australian
Government’s commitment.
A New Car Plan for a Greener Future
is a plan to provide that certainty. It has a
thirteen-year horizon, with a high level of support at the beginning to accelerate reform and renewal, eventually
tapering down to zero. The best way to maximise investment is by simultaneously inspiring condence and
encouraging self-reliance. That’s what we have set out to do.
It is a plan to green the industry.
There has been a revolution in consumer preferences worldwide. Demand
for fuel-efcient, low-emission vehicles has grown dramatically. Vehicle makers around the world are
moving to greener vehicle technologies, and the Australian industry is no exception – we already have two
new, greenhouse-friendly models in the pipeline.
A New Car Plan for a Greener Future
will accelerate this
process. It includes specic support for the development of fuel-saving and carbon-cutting technologies.
Why A NEW CAR PLAN?
Adaptation will require
signicant investment in new
technologies, new capabilities
and new skills – investment
that generates the kind
of sustainable, full-time
jobs Australians want for
themselves and their children.
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More generally, assistance will be conditional on participants agreeing to achieve better environmental
outcomes – not just by coming up with greener products, but by adopting greener production processes. Our
aim is to turn the car industry into a provider of green-collar jobs – jobs that will still be around in tomorrow’s
increasingly carbon-constrained world.
It is a plan to strengthen the local supply chain and boost skills.
Australia doesn’t have three car companies,
but around 200. We don’t have three car makers, but over 60,000. We can’t have a strong automotive industry
without capable suppliers and skilled workers.
A New Car Plan for a Greener Future
will get rms upgrading
workforce skills and extending their own capabilities. It includes specic measures to make suppliers more
creative, resilient, competitive and export-focused. It gives employers and employees alike good reasons to
invest in the new skills needed to develop and apply new technologies.
It is a plan to increase international engagement.
Car-making is a global business. The Australian automotive
industry must cement its place in international markets. That will mean winning more overseas sales,
contributing to the design and development of global vehicle platforms, and improving links to international
supply chains. This is already happening. Australia exported $5.6 billion worth of vehicles and vehicle
components in 2007–08. That’s more than we earned from our exports of wool, wheat or beef. Australian-
made vehicles are being driven on every continent except Antarctica, and Australian ideas, technologies
and components can be found in vehicles worldwide.
A New Car Plan for a Greener Future
will build on this
foundation.
The engine that will drive all this is innovation. The automotive industry already accounts for 5.3 per cent of
business spending on research and development in Australia. The Government’s new car plan increases
support for R&D and demands a commitment to innovation across the board. Every participant will be required
to come up with new and better products, new and better ways of producing them, and new and better ways
of marketing them to the world. The plan will give researchers, technologists, engineers and designers new
opportunities to help create the low-carbon transport options consumers increasingly want and our planet so

urgently needs.
A New Car Plan for a Greener Future
involves a substantial commitment from the Australian Government and
the Australian people, but it is also predicated on commitments from the industry. Every dollar contributed
by the Australian taxpayer will be matched several times over by contributions from the private sector. The
industry will have to co-invest at least $16 billion to access all of the assistance foreshadowed in the plan. We
expect that investment to generate signicant new employment opportunities. It is about mutual obligation all
round – a genuine partnership.
The new car plan acknowledges that all Australians benet from having a healthy automotive industry, that
everyone has a stake in its future, and that everyone should be part of the decision-making process. That’s
why the Automotive Industry Innovation Council is so important. It will be established immediately and asked
to focus initially on the most pressing issues facing the industry. As these are addressed, it will turn its
attention to new prospects and opportunities. Its job will be to ensure that Australia plays a leading part in
the development of tomorrow’s markets and technologies.
Between 2001 and 2007, Australia spent $3.8 billion on the Automotive Competitiveness and Investment
Scheme. The rms taking part in the scheme spent more than ten times that amount on plant, equipment,
R&D, taxes, wages and salaries. We can expect even better returns from
A New Car Plan for a Greener Future.
An investment in the Australian car industry is an investment in Australian economic capacity, innovation and
jobs. The Australian Government believes it is an investment worth making.
8 | A NEW CAR PLAN FOR A GREENER FUTURE | 9
1. Automotive trAnsformAtion scheme (Ats)
We cannot secure the future of the Australian
automotive industry by sticking to old ways.
Innovation is the key. The Automotive Transformation
Scheme will replace the Automotive Competitiveness
and Investment Scheme (ACIS) Stage 3, which
was to run from 2011 to 2015. The new scheme
is better targeted, greener, and will promote the
development of new skills. It puts more emphasis on

investment in research and development to increase
competitiveness and productivity – particularly in the
supply chain. It will include:
capped assistance of $1.5 billion over 2011 to 
2015 (up from the $1 billion planned for ACIS
Stage 3); and
new capped assistance of $1 billion over 2016 to 2020. 
Assistance will be in the form of grants rather than duty credits.
Capped funding will continue to be split 55 per cent to vehicle producers and 45 per cent to the supply chain.
All participants will be eligible to claim 15 per cent of their investment in approved plant and equipment (the
supply chain can currently claim 25 per cent and vehicle producers 10 per cent). The 20 per cent loading
available under ACIS to cover labour and other costs associated with investment in plant and equipment will
be abolished under the ATS. This will ensure that assistance is targeted to support genuine investment in
productive capacity. More capacity means more jobs.
Supply chain participants will be eligible to claim 50 per cent of their investment in approved R&D (up from
45 per cent), and the list of eligible R&D activities will be streamlined. Recruitment and management will no
longer count as R&D activities.
All participants will be required to demonstrate:
progress towards achieving better environmental outcomes; and 
a commitment to developing capabilities and skilling the workforce. 
ThE DETAILS
The new scheme puts more
emphasis on investment in
research and development
to increase competitiveness
and productivity
10 | A NEW CAR PLAN FOR A GREENER FUTURE
| 11
2. Green cAr innovAtion fund (Gcif)
It is imperative that we make the Australian automotive industry greener. This is the key to winning

international sales, tackling climate change, and ensuring that private vehicle ownership remains sustainable
and affordable. The Green Car Innovation Fund will help the industry deliver the improved environmental
performance required by the Automotive Transformation Scheme. The fund will provide $1.3 billion over ten
years from 2009 to vehicle producers, component makers and researchers (up from $500 million over ve
years, and brought forward from 2011). Assistance will be in the form of grants.
Grants will be allocated through a competitive
selection process taking into account the
innovative, technological, commercial and
environmental merits of each proposal. The
focus will be on the research, development and
commercialisation of Australian technologies that
signicantly reduce fuel consumption, greenhouse
gas emissions, or the weight of vehicles. Eligibility
will not be restricted to particular technologies.
Consortiums may submit proposals combining measures that will together achieve an objective of the fund. All
proposals must have good prospects of commercial application in Australia.
Recent studies by the CSIRO and others have been up-beat about our capacity to create green-collar jobs that
will be sustainable under a low-carbon regime – if we get the policies right. The Green Car Innovation Fund
will give Australia a head-start in the race for green-collar jobs by getting people working on carbon-cutting
and fuel-saving technologies right now. As demand for these technologies grows, so will the employment
opportunities.
The fund will generally contribute one dollar for every three dollars contributed by proponents, but there will be
scope to vary this depending on the risk prole and the value of in-kind contributions. There will be a limit on
the amount of funding available to any one recipient, but the limit will be set high enough to permit support for
major projects.
All organisations and individuals will be eligible, including rms in the automotive supply chain, research
organisations and international rms, as long as the work supported by the fund is performed in Australia and
aimed at commercial development here.
3. Automotive industry structurAl Adjustment ProGrAm (AisAP)
Transforming Australia’s automotive industry will

necessarily involve dislocation for some rms and
workers. We can minimise that dislocation – and
its effects on the rest of the industry – by working
proactively with rms to ease the process of
structural adjustment. This program recognises
that the supply chain will need to consolidate if the
industry is to achieve global scale and retain core
capabilities. It also recognises that, in the short
term at least, there may be further job losses.
The AISAP will provide $116.3 million to facilitate consolidation in two ways. First, by helping rms with legal,
relocation and other merger costs. The program will neither prop up failing rms, nor pay them to exit the
industry. It will only support transactions that make the industry stronger. The level of assistance will be
determined by the Minister, but in no case will merger costs be met in full.
Second, the AISAP will provide labour market adjustment support similar to that provided by other sectoral
and regional adjustment programs, but using delivery mechanisms appropriate to this industry.
All proposals must have good
prospects of commercial
application in Australia.
The supply chain will need
to consolidate if the industry
is to achieve global scale
and retain core capabilities.
10 | A NEW CAR PLAN FOR A GREENER FUTURE
| 11
THE DETAILS
The aim of this program is to strengthen the components sector so that it can go on providing secure
employment to as many skilled workers as possible. When workers are displaced, it will provide training and
other assistance to get them into alternative employment.
Labour market adjustment assistance will be available to workers who have been made redundant from
1 November 2008, and structural adjustment assistance from 1 January 2009. The structural adjustment

element of the program will be evaluated after two years.
4. Automotive suPPly chAin develoPment ProGrAm
We simply cannot have a viable Australian automotive industry without a strong components sector. The
Automotive Supply Chain Development Program will provide $20 million over four years to strengthen
capabilities in the components sector and improve supply chain integration. It will build on supply chain
development initiatives such as Automotive Supplier Excellence Australia, which is jointly funded by
governments and industry, and which is coordinated by the Cooperative Research Centre for Advanced
Automotive Technology (AutoCRC).
5. Automotive industry innovAtion council
The Australian automotive industry must remain exible and responsive to emerging challenges and
opportunities. It must continue to innovate. The government will establish an Automotive Industry Innovation
Council to keep the sector informed, to develop and disseminate new ideas, and to drive continuous
improvement and renewal.
The Australian Government’s innovation and trade ministers, the Victorian and South Australian industry
ministers, the three vehicle producers, component makers, unions and researchers will all be represented
on the council. It will serve as a forum for discussion and will provide strategic advice – not least on the best
ways to boost skills and job opportunities. Its overarching task will be to coordinate the transformation of
the industry.
6. Automotive mArKet Access ProGrAm
A new $6.3 million Automotive Market Access Program will be established to boost component suppliers’
access to global supply chains, building on the success of the Supplier Access to Major Projects Program’s
Team Australia Automotive initiative.
Under the program, an automotive champion – a well-known and respected industry gure – will be appointed
to promote the industry using an expanded Austrade adviser network in four countries: China, India, Korea and
the USA. The automotive champion will also encourage Australian rms to adopt international best practice.
7. lPG vehicle scheme enhAncement
While the aim of this package is to stimulate
investment in innovations that will make
motoring less costly to households and the
planet in the years to come, we can also

make immediate gains by exploiting existing
technologies. With this in mind, the $1,000
grant available under the LPG Vehicle Scheme
for new factory-tted LPG passenger motor
vehicles for private use will be raised to $2,000
from 10 November 2008. This initiative will not
only make new LPG vehicles more affordable
to Australian families, but encourage the early
adoption of new technologies, such as more
efcient direct-injection LPG engines.
This initiative will encourage
the early adoption of new
technologies, such as more
efcient direct-injection LPG
engines.
12 | A NEW CAR PLAN FOR A GREENER FUTURE
| 13
Rec. Details Response Comments
GLOBAL AUTOMOTIVE TRANSITION SCHEME (GATS)
1 A new, retargeted transitional program titled the Global
Automotive Transition Scheme should be legislated in
2009 and commence in 2010. The Global Automotive
Transition Scheme would complement, and be additional
to, the Australian Government’s Green Car Innovation
Fund.
Agreed in
principle.
Transitional provisions for
ACIS will come into effect
in 2010. The renamed

Automotive Transformation
Scheme will come in to effect
from 1 January 2011.
2 There are three options for funding the Global
Automotive Transition Scheme and other measures
recommended in this report. These are:
Option 1: Funding for the Global Automotive Transition
Scheme over the ve years to 2015 (inclusive)
should be $1.5 billion in capped assistance.
An additional tranche of funding of $1 billion
in capped assistance should be provided
from 2016 to 2020, with this front-loaded and
reducing to zero.
The funding also covers the industry –
restructuring fund, Team Australia
Automotive, the Automotive Ambassadors,
the Automotive Industry Innovation
Council and the changed LPG Vehicle
Scheme arrangements. These initiatives
should commence in 2009.
The Green Car Innovation Fund, worth –
$500 million, should be brought forward
to 2009.
Not agreed.
ThE GOvERNMENT’S RESPONSE TO
ThE REvIEW OF AUSTRALIA’S
AUTOMOTIvE INDUSTRy
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| 15 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY
Rec. Details Response Comments

Option 2: Funding for the Global Automotive Transition
Scheme over the ve years to 2015 (inclusive)
should be $1.5 billion in capped assistance.
An additional tranche of funding of $1 billion
in capped assistance should be provided
from 2016 to 2020, with this front-loaded and
reducing to zero.
The funding also covers the industry –
restructuring fund, Team Australia
Automotive, the Automotive Ambassadors,
the Automotive Industry Innovation
Council and the changed LPG Vehicle
Scheme arrangement. These initiatives
should commence in 2009.
Funding for the Green Car Innovation –
Fund should be brought forward to 2009
and, if successful, the Fund should be
doubled from $500 million to $1 billion
and extended beyond its initial ve years.
Not agreed.
Option 3: Funding for the Global Automotive Transition
Scheme over the ve years to 2015 (inclusive)
should be $1.5 billion in capped assistance.
An additional tranche of funding of $1 billion
in capped assistance should be provided
from 2016 to 2020, with this front-loaded and
reducing to zero.
A further tranche of funds should be –
made available to cover the industry
restructuring fund, Team Australia

Automotive, the Automotive Ambassadors,
the Automotive Industry Innovation
Council and the changed LPG Vehicle
Scheme arrangements. These initiatives
should commence in 2009.
Funding for the Green Car Innovation –
Fund should be brought forward to 2009
and, if successful, the Fund should be
doubled from $500 million to $1 billion
and extended beyond its initial ve years.
The Review recommends Option 3.
Agreed in
principle.
$3.4 billion in capped and
uncapped assistance will
be provided under ATS.
This comprises $2.2 billion
in additional funding
and $1.2 billion that was
previously allocated for ACIS
Stage 3.
See Recommendations 12,
14–28 and 36.
3. Funding for both the motor vehicle producers and the
supply chain should be split 55 percent (to vehicle
producers) and 45 percent (to the supply chain) after
monies for the additional programs are either deducted
from the capped pool or allocated separate funding.
Agreed.
This split will be applied only

to the capped element of ATS,
not the uncapped element as
is current practice with the
Automotive Competitiveness
and Investment Scheme.
Additional programs will be
allocated separate funding.
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| 15 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY
Rec. Details Response Comments
4. Assistance should be in the form of grants and not duty
credits.
Agreed.
New ATS assistance will be
in the form of grants rather
than duty credits.
5. Credits for the production of vehicles for different
markets should be treated the same, by partially
uncapping all production credits.
Agreed.
This will apply under ATS,
and also under ACIS from
1 January 2010.
6. The dependency threshold for the component
suppliers should be raised to $2 million to facilitate
the rationalisation of the industry. Automotive service
providers and automotive machine tool producers should
continue to meet the lower threshold of $500,000.
Not agreed.
7. The loadings applying under the previous Automotive

Competitiveness and Investment Scheme for supply
chain investment should be abolished.
Agreed.
8. The list of eligible research and development (R&D)
activities should be streamlined and exclude payments
for recruitment and management.
Agreed.
The Government will
consult with industry
in implementing this
recommendation.
9. The rate for claims for investment in eligible R&D should
be increased from 45 to 50 percent.
Agreed.
10. The rate for claims for investment in plant and
equipment should be reduced from 25 to 15 percent.
Agreed.
This reduction relates to
supply chain participants.
The Government will also
legislate for investment in
plant and equipment by
motor vehicle producers
to increase from 10 to
15 per cent.
11. Firms that have not participated in a supply-chain
capability development program should participate
in such a scheme in return for receiving government
assistance. Funding for the program should be provided
by the Australian Government with contributing

payments from the rms themselves. The supplier
capability program should not be limited to participation
in Automotive Supplier Excellence Australia, but also
include other service providers such as Enterprise
Connect, C21 and the motor vehicle producers’ supplier
capability programs.
Not agreed.
An Automotive Supply Chain
Development Program
will be established at a
cost of $20 million over
four years. ATS assistance
will not be conditional
on having participated in
such a scheme; however,
participation will be
encouraged, and rms
registering for ATS will
be required to provide
satisfactory evidence that
they are committed to
capability development.
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| 17 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY
Rec. Details Response Comments
AUTOMOTIVE INDUSTRY INNOVATION COUNCIL
12. An Automotive Industry Innovation Council should be
established, with high level representation from the
motor vehicle producers, component suppliers, unions,
research and academic organisations, and government.

The Automotive Industry Innovation Council should –
provide advice and oversight in relation to the new
transitional arrangements applying to the industry.
Administrative expenses and secretariat support to –
the Automotive Industry Innovation Council should
be funded under the Global Automotive Transition
Scheme.
The Automotive Industry Innovation Council should –
include a reference group that provides advice
on automotive skills issues to Manufacturing
Skills Australia (the Industry Skills Council having
primary carriage for manufacturing industry skills
development).
Agreed in
principle.
The Automotive Industry
Innovation Council will
be established under the
Government’s existing
Industry Innovation Councils
initiative. Its operation will
be funded from this program
rather than from ATS.
The proposal to establish
a reference group to
advise Manufacturing
Skills Australia will be
further considered by the
Minister and the Deputy
Prime Minister (see

Recommendation 18).
AUTOMOTIVE TARIFFS
13. The passenger motor vehicles and parts thereof
tariffs should be reduced from 10 to 5 percent on
1 January 2010. This, combined with assistance under
the Global Automotive Transition Scheme, will help
deliver benets to the economy as well as continuing to
provide transitional support for the industry.
Agreed.
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| 17 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY
Rec. Details Response Comments
AUTOMOTIVE INDUSTRY RESTRUCTURE FUND
14. The Australian Government should contribute to a short-
term automotive industry restructure fund that aims to
assist the Australian automotive supply chain improve
economies of scale, enhance management capabilities,
internationalise production to build capacity and
demand, and enhance long-term sustainability.
Funding for the industry restructure fund should be –
part of the new Global Automotive Transition Scheme
proposed in Chapter 11.
Payments under the industry restructure fund –
should be determined on a case-by-case basis
by the responsible Minister, on advice from his or
her department, taking into account ‘transmission
of business’ issues including facilitating mergers
and acquisitions in the sector; addressing, where
appropriate, contingent liability or other issues that
might act as barriers to effective and successful

sectoral consolidation; consolidation of plant and
equipment; and co-location of production. Where
appropriate, fair and reasonable assistance
should also be made available to employees made
redundant through automotive restructuring.
The industry restructure fund should include support –
for developing the Australian automotive supply
chain’s management and operational capabilities and
processes (similar to Automotive Supplier Excellence
Australia, C21 and other existing initiatives).
Government funding for the industry restructure –
fund should be of a limited amount and duration (for
example, $60 to $80 million over two years) to cover
the immediate restructuring and consolidation needs
of the automotive industry.
The automotive industry should contribute nancially –
to the activities supported by the industry restructure
fund.
Agreed in
principle.
An Automotive Industry
Structural Adjustment
Program will be established.
It will receive $116.3 million
in additional funding
outside ATS. The program
will contribute to meeting
transaction and related costs
associated with mergers that
enhance industry capability.

It will not pay for exits from
the industry.
AISAP will also include
a labour adjustment
element, similar to that
under the Textiles, Clothing
and Footwear Structural
Adjustment Program.
Support for enhancing the
supply chain’s management
and operational capabilities
will be provided by the
Automotive Supply Chain
Development Program (see
Recommendation 11). An
industry co-contribution will
be required.
15. The automotive industry, unions, employees and
governments should engage in an ongoing dialogue
so that the restructuring and consolidation process is
effective in helping with an orderly transition to a more
competitive and sustainable future for the industry.
Agreed in
principle.
The Government will raise
this issue as appropriate in
ongoing discussions with the
industry.
18 | A NEW CAR PLAN FOR A GREENER FUTURE
| 19 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY

Rec. Details Response Comments
16. A memorandum of understanding should be negotiated
by motor vehicle producers, component suppliers
and unions, and be facilitated by governments where
appropriate. The memorandum of understanding should:
acknowledge that restructuring and consolidation –
are a necessary part of assuring a vital Australian
automotive industry into the future; and
assist with assuring continuity of supply in an –
industry characterised by just-in-time delivery and
high levels of international competition.
Agreed.
The Automotive Industry
Innovation Council will
facilitate the development
of a memorandum of
understanding, or similar
instrument. The Government
acknowledges that the
Federation of Automotive
Product Manufacturers has
commenced work on a Code
of Commitment, which may
form the basis for a broader
industry agreement.
17. The leadership dialogue between the component sector
and unions should continue.
Whether this translates into a framework agreement –
is a matter for the participants. However, there are
benets to be gained from a shared understanding

of the challenges that lie ahead and the need for
improvements in competitiveness and productivity.
The issue of employee entitlements is also a –
matter where a leadership dialogue can assist
the participants to more effectively manage the
restructuring process.
Agreed.
While this is a matter for
the components sector and
unions, the government
will continue to encourage
dialogue.
18. To assist with resolving skills issues common across
the automotive and other manufacturing industries, the
Australian Government should establish a reference
group to provide advice on automotive skills issues to
Manufacturing Skills Australia.
The reference group should come under the –
Automotive Industry Innovation Council proposed in
Chapter 11.
Noted.
This matter has been
referred to the Deputy Prime
Minister, who is currently
considering the most
appropriate coordination
mechanism for automotive
industry skills issues.
GREEN CAR INNOVATION FUND
19. The Green Car Innovation Fund should assist the

Australian automotive industry with developing and
commercialising technologies aimed at improving
vehicle fuel efciency and emissions. The combination
of the Fund with an emissions trading scheme will drive
positive innovation and environmental outcomes for the
economy and the industry.
Agreed.
20. In preparation for an emissions trading scheme, the
start date of the Fund should be brought forward to 2009.
Agreed.
18 | A NEW CAR PLAN FOR A GREENER FUTURE
| 19 THE GOVERNMENT’S RESPONSE TO THE REVIEW OF AUSTRALIA’S AUTOMOTIVE INDUSTRY
Rec. Details Response Comments
21. If the Fund proves successful in its rst two years of
operation, its funding should be doubled from $500
million to $1 billion and the scheme extended beyond its
initial ve years.
Agreed in
principle.
In order to provide
certainty for the industry
and encourage early and
sustained investment in
new technologies, the Green
Car Innovation Fund will be
expanded by $800 million
and will operate over ten
years from 2009.
22. Benets from the Fund should be paid as cash grants,
following a competitive selection process based on

broad criteria that assess the innovation, technological,
commercial and environmental merits of applications.
Agreed.
23. Since automotive industry investment is often ‘lumpy’
there should be scope under the Fund to vary the
amount of Fund payments between years.
Agreed.
24. There should be scope to vary the one-to-three dollar
funding ratio within a range (for example, one-to-two
dollars to one-to-four dollars) to take account of varying
risk proles.
Agreed.
25. There should be a maximum limit set on the amount
of support available to any one funding recipient. This
limit should be set at a high level in order not to restrict
signicant projects.
Agreed.
The maximum level will be
determined in consultation
with industry.
26. Mandatory and discretionary criteria should be designed
to assess proposals against a mix of quantitative
and qualitative aspects. Commercial application of
technology should be a mandatory criterion.
Agreed.
27. All organisations and individuals should be eligible,
including participants in the automotive supply chain,
research organisations, and international rms where
eligible activities are performed in Australia.
Agreed.

Participation will be subject
to the ability to contract with
the Australian Government.
28. Fund eligibility should not be restricted to any particular
range of automotive technologies.
Agreed.
EMISSIONS TRADING AND THE ENVIRONMENT
29. Road transport (including fuel) should be included in the
emissions trading scheme as it allows the industry to
determine the lowest-cost form of emissions abatement.
In this respect, future consideration of mandatory
emissions targets for new vehicles should have regard to
development of the emissions trading scheme.
Agreed.
The Government’s Carbon
Pollution Reduction Scheme
Green Paper proposed the
inclusion of road transport in
the scheme.
30. If the emissions trading scheme excludes road transport,
then a mandatory greenhouse gas emissions target
should be introduced as a ‘second best’ policy.
Noted.