THE Nationals Senator Barnaby Joyce has hit back at his internal Coalition critics, saying car industry subsidies are essential for the entire Australian manufacturing sector and populist economic policies are a good thing for an opposition that wants to get elected.
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The Coalition is divided over whether to retain a policy to slash $500 million from car industry subsidies, a cut that helps the Coalition's bottom line but the industry says would close existing plants and cost jobs.
As revealed in the Herald this week, a report to the Opposition Leader, Tony Abbott, has recommended the cut be reviewed, but senior Liberals have vowed to fight to keep the budget saving and defend the party's traditional free-market philosophy. They have declared the issue a ''line in the sand'' in the drift to protectionist ''Barnaby-onomics''.
The shadow treasurer, Joe Hockey, promised to strongly resist any change in the budget cut.
Senator Joyce conceded yesterday he differed from colleagues who took a ''pragmatic, zealot's view''.
''You have to understand that no car in the whole world is produced without some form of subsidy, and the car industry in Australia is essential for Australian manufacturing which, I think, we need because a country that doesn't make things is headed to come a cropper … to take an extreme example, in times of war,'' he said.
''The pragmatic zealot view would mean there was no arts industry, no public transport, no environment programs, because none of those things pay for themselves … in fact, if you got rid of manufacturing, the whole existence of Melbourne and Adelaide would start to come into question.
''I mean, maybe those 50,000 people who work in the car industry could all go and work in the service industry, or shift to the mining states, but I'd like to see what happened when you ran that idea past them … and, as for populism, I think it's good to be on the right side of the people if you want to be elected.''
The Manufacturing Minister, Kim Carr, just back from talks in Detroit about government funding to win ongoing investment from Ford and Holden, mounted the same argument as Senator Joyce - that all countries subsidised car making, which under-pinned the manufacturing sector.
Senator Carr cited a new report which rebuts claims by the Organisation for Economic Co-operation and Development, and Australian think tanks, that car subsidies here are among the highest in the world.
According to the report, commissioned by the car makers from the Sapere Research Group, Australia's subsidies amount to $US18 per car worker a year, compared to $US90 in Germany, $US96 in Canada, $US147 in France and $US334 in Sweden.
Two years ago, the OECD assessed Australia's subsidies as second only to Sweden.
Senator Carr attacked Mr Abbott for pretending to be the champion of the blue-collar worker but refusing to guarantee car subsidies would continue.
''Mr Abbott has made a great play of putting on the fluoro vest and going around to factory after factory … He's actually got to make a commitment,'' Senator Carr said.
