The Automotive Industry

About the Inquiry

The Commission was asked by the treasurer to report, and make recommendations, on assistance arrangements for the automotive industry (passenger and light commercial vehicle sectors) from January 2000. In making its recommendations the Commission's aim was to improve the overall economic performance of the Australian economy.

The Commission was to have regard to the Government's desire to encourage the development of a sustainable, prosperous and internationally competitive automotive manufacturing industry in Australia; to improve the overall economic performance of the Australian automotive industry; to provide good quality, competitively priced vehicles to the Australian consumer; and its commitment to abide by Australia's international obligations and commitments.

The Commission was requested to include in the report options, a preferred option and implementation strategy. Furthermore the Commission was asked to consider how the Australian automotive industry would evolve within a world trading environment through the next decade, consider APEC developments on market liberalisation, and the timing and extent of cost reductions from other microeconomic reforms. It was to take account of any recent substantive studies, and have regard to the economic, social, environmental and regional development objectives of governments.

In particular the Commission was required to report on:

1. emerging national and international market factors affecting the industry, including its current structure, rationalisation, competitiveness and barriers facing Australian exports, drawing international comparisons where appropriate;
2. the advantages and disadvantages of Australia as an investment location for all phases of automotive activity, from research and development to manufacturing and export;
3. the potential for further development of the industry, including the scope for improving productivity and workplace practices;
4. an appropriate policy framework to address the environmental issues facing the industry, including meeting fuel efficiency and emissions targets;
5. the effectiveness of Australian research and educational infrastructure in providing design, engineering and other skill capabilities;
6. the impact of current assistance arrangements for the industry, and regulatory and standards arrangements, on its structure, performance and competitiveness, and on Australian consumers, resource allocation and growth prospects generally;
7. any measures which could be undertaken to remove impediments or otherwise contribute to the efficiency and development of the industry, including ways of reducing the regulatory burden on small business; and
8. the impact of its proposals on relative assistance between the vehicle manufacturing and the component manufacturing sector.