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$2b cars plan to save 50,000 jobs

Kevin Rudd has said a re-elected Labor Government will top up existing taxpayer support by $500 million.

Kevin Rudd has promised an extra $2 billion to subsidise the car industry until at least 2025 as Labor seeks to make the election a referendum on the auto sector's future in Australia.

The Prime Minister says a re-elected Labor Government will top up existing taxpayer support by $500 million between 2016-20 and commit $300 million a year between 2021-25. Labor says it won't require new money in the Budget until 2018 but it will legislate to lock in the pledge to give investment certainty to Holden and Toyota to encourage them to keep making cars in Australia.

Mr Rudd has said the future of the industry and 250,000 jobs were endangered by the Coalition's plan to cut aid by $500 million. Its cuts would relegate the Australian-made car to the history books “and 250,000 Australian jobs will be at risk, with 50,000 certain to go,” he said.

“A successful automotive industry creates skilled jobs, drives high-level research and development and supports other technologically sophisticated industries.” Industry Minister Kim Carr said there was a sharp divide between Labor and Coalition policies.

“(This) is the year people decide whether we have an automotive industry in this country,” he said. “The Liberals will take away $500 million and if they do that there will be no industry.” Senator Carr, a passionate supporter of the industry, said the “New Car Plan for the 2020s” would be tied to commitments by companies.

“Depending on the project, for every dollar taxpayers put in, the company puts in between $3 and $10. And for every dollar we put in, it generates about $20 for the economy,” he said. “It recognises the reality that the automotive industry doesn't exist without co-investment and it is all set against agreed milestones.”

The car industry directly employed 50,000 people and supported about 200,000 indirect jobs. The scheme covers making cars, plant and equipment, tooling, innovation and design, and engineering services. The money would also be available to 150 registered component suppliers and services firms.