The word from Australia’s car and automotive parts manufacturing industry is that it will not survive a Gillard carbon tax, and companies are more likely to move offshore to countries where they don’t have to pay it.
Since Gillard announced he plan to legislate a carbon tax by July 2012, the auto manufacturing industry has been up in arms as it is already fighting to keep its head above water.
The government made grants available to aid the auto industry in developing greener, smaller cars last year. However, after the recent Queensland floods the Green Car Fund was abolished, leaving auto manufacturers out in the cold. A carbon tax on top will severely limit the car companies’ cash flow and their ability to plan for future manufacture of motor vehicles in Australia. No one manufacturer planned for the carbon tax to be an issue as Gillard promised before she won last year’s election that there would be no carbon tax. However she has now decided that a tax, once legislated, will be begin in July 2012.
After three years it will switch to an emissions trading scheme. Although petrol is exempt from the tax, motorists will still pay a higher price for all other aspects of the automotive production and service processes. The manufacture of parts and PVC-based items that are an integral part of car production and service items which heavily rely on oil by-products and intensive energy to manufacture – such as oils, hoses, brake pads, sound deadening, suspension components, tyres and mufflers – will all be taxed under the $23 per tonne carbon levy.
Whether you like it or not fossil fuel is not a infinite commodity, so funding the search for an alternative makes good sense.