Australia Automobile Closure

In all likelihood, the closure of iconic automotive industry in Australia is imminent. The last Australian made cars by Holden and Toyota will leave the production line this year in October. The third player in this industry Ford has already closed its manufacturing plant last year. The present essay will examine all the factors that contributed to the closure of car manufacturing in Australia. This essay argues that the Australian government made the right decision to no longer provide financial support to the struggling automotive industry, as it was the unsustainable use of taxpayers money in the long term. However, the government could have supported the industry by imposing taxes and tariffs on the imports. In order to support this argument,

There has been a rapid change of technology and engineering in cars (Clibborn et al 2016, pg 8), ranging from self-driving to electric cars. This has opened a renewed market for the research and development of these technologies, providing new car manufacturers with latest innovation and design such as Tesla, which is now the most valued car manufacturer brand in the United States (Stringam, et al., 2015 pg. 24). The Australian government and the local car manufacturers failed to invest in the latest innovation in the industry. The Australian Government provided the financial assistance to car manufacturers, however, due to the lack of coordination between government and the car manufacturers, the financial assistance was not invested into research and development. The financial assistance could have made the car manufacturers apathetic toward innovation. This is evident by the fact that none of the local manufacturers made investments in innovation but completely relied on their headquarters in US and Japan for all the research and development (Clibborn et al 2016, pg 10). Hence the government made the right decision by not funding an industry which lacks in research and

Holden received the most which was 2.17 billion, followed by Ford who received 1.1billion, and 1.2 billion to Toyota (News.com.au, 2013). These are the massive sums of taxpayer money given to large corporations. For instance, in the same year in 2013 the government spent 9.3 billion dollars on schools across Australia (Aph.gov.au, 2013).The Local manufacturers in 2013 demanded the government to increase the funding every year, in order to keep manufacturing in Australia. In 2013, the Australian government made the right decision to cut funding as it was not a sustainable use of taxpayer’s money. The money spent by government to aid manufacturers could have been better utilised in more sustainable projects, like in the development of assets, education, health and research and development. The companies who rely on government assistance do not remain efficient and effective, such as the Australian example of how the government owned enterprise Telstra jumped back to profitability after going private. In comparison to a decade ago, the Australian budget is also now in deficit. The government should not spend large proportions of money on funding corporations that do not create an asset and are not beneficial to all of the taxpayers. Due to the significant amount of money involved, it is inappropriate for the government to spend money on providing