A recent report released by the Productivity Commission titled Review of Automotive Assistance - Inquiry Report finally raised the question of continued tariff support to the Australian Motor Industry.

The conclusion of the review was that the current Customs Duty rate of 15% be phased down to the general rate of 5% over a five-year period. This would bring the rate of duty on imported passenger motor vehicles into line with the rate applied for four wheel drives, trucks, buses and most other imported goods. (A rate of zero would be better, but the spendthrift nature of the Howard Government is a disincentive to any erosion of the revenue base). This would leave the equally coddled TCF (textile, clothing and footwear) section as the only one left with significant tariff protection.

It would appear that the Commonwealth has finally weaned the utterly dependent motor industry off the Public weal, but this is not the case. The response by the Commonwealth Treasury agreed on one hand to a phased reduction in duty rates, then threw the Motor Industry grants likely to run to over A$5 billion over the same period.

The Australian motor industry has cost taxpayers and buyers of its products an astronomical amount of money over the last fifty years, and has barely been able to produce a product of an acceptable standard. What is also hidden is the use of Australian Design Rules (ADRs) to limit access to the Australian market by imports - along the same lines of how CAMS kept changing the rules for Group A touring cars, so now the only things that qualify are Australian produced sedans (which run US built engines, transmissions, brakes, suspension etc).

The fact is that if GMH, Ford, Mitsubishi and Toyota disappeared overnight, the net loss would be a few hundred jobs - many of which would be taken up in the import trade. If the sole reason to maintain the local industry is to protect jobs, surely a better group of workers exist deserving of such expensive job security could be found than the denizens of Doug Cameron's Manufacturing Workers Union.

Why is the current government so concerned about keeping the local manufacturers going? Most of the production takes place in safe Labor seats, and their overall revenue base would probably be enhanced by an increase in the import trade. Up to 70% of the inputs to ?local? vehicles are imported, at free rates of duty. Various levels of government whine constantly about the continued use of leaded fuel and the ageing Australian motor fleet, yet actively obstruct alternatives to bring cheaply priced late model vehicles onto the market - that obstruction being lobbied for by the local industry to protect sales. Recent changes to the Low Volume Import Scheme will vastly cut the number of used vehicles being imported from Japan- a reasonable source of later model cars for those without the where-withal to shell out 30K on a Commodore.

The fact is that if tariffs and the ADRs were scrapped, Australian motorists would be able to buy a 5 Series BMW or a 190 Mercedes for about what they have to pay for a Falcon or Commodore now. The only people who would mourn the passing of the local industry would be Bevans.