The difficulties of the Australian car manufacturing industry have rekindled debate about its future. Should the federal government continue propping up this declining industry? Should it withdraw all support and assistance for cars? For decades, we have had a hotchpotch of policies and practices in allocating what amounts to public favours, via a blunt instrument that is implicit in traditional protectionist policies and industry assistance. This approach has been ineffective and costly. The more tariffs have been lowered, the more the automotive industry has struggled, despite consistent bailouts. This paper suggests that we need to move beyond debates about whether governments should continue intervening or cease investing in the car industry. The issue is not about whether industry policy should keep ailing industries from going to the wall, but rather the objective should be the pursuit of productivity and longer-term economic investment.
These Occasional Papers are jointly published by ANZSOG and the (former) Victorian State Services Authority.
van Acker, L (2012). Car Manufacturing in Australia: What’s next? SSA/ANZSOG Occasional Paper, 20. Melbourne: ANZSOG.