Hockey attacks AMWU
In question time, Joe Hockey links Toyota's decision to stop car production in Australia to union inflexibility on wages and conditions.PT7M8S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-32i21 620 349 February 12, 2014
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The tariff rate for Australia's car industry is one of the lowest in the world. At just 5 per cent, it applies to passenger and light commercial vehicles and four-wheel-drives.
It is even lower than 5 per cent for some countries under bilateral or regional trade agreements - with ASEAN, the United States, New Zealand, Chile, Malaysia, Singapore and Thailand.
In India, tariffs are much higher, between 60 and 100 per cent. Thailand (80 per cent), Brazil (35 per cent) and China (25 per cent) also receive much more assistance.
Australian tariffs used to be just as high. In the early 1980s the import duty here was close to 60 per cent. But policy changes following the release of the 1984 Motor Industry Development Plan led to a progressive reduction in tariff assistance. That meant the tariff rate on passenger vehicles and parts declined by 2.5 percentage points each year between 1988 and 2000. There was another reduction of 5 percentage points in 2005.
The Bracks review, chaired by former premier Steve Bracks, recommended another 5 percentage point reduction in return for billions of dollars in handouts. That happened in 2010. Since then, the big car makers all announced plans to pull out of Australia.
Federal Treasurer Joe Hockey has blamed Toyota's decision to leave Australia on high labour costs. He suggested on Wednesday that he may remove the 5 per cent tariff.
''There's a legitimate case put forward to remove tariffs where there is no local motor vehicle manufacturing industry,'' Mr Hockey told Fairfax Radio, saying it will be reviewed in the next 18 months.
The Federal Chamber of Automotive Industries chief executive, Tony Weber, said there was now ''no rationale'' for keeping the 5 per cent tariff, with the big three car makers pulling out.