The Abbott Government continues to take contradictory positions on industry support that risks undermining its legitimacy.
After talking a tough on assistance to the car industry, and arguably hastening its demise, the Coalition has ear-marked tens-of-billions of taxpayer dollars to local defence manufacturing, including a $10 billion program for 700 locally produced armoured vehicles, as well as locally designed and built submarines for around $40 billion, and a multi-billion dollar warship program.
While I acknowledge that there is an argument for retaining our own military hardware building capacity, it shouldn’t come at any cost. Particularly given Australia could easily purchase proven, fit-for-purpose, military hardware from abroad at a fraction of the cost of developing similar technologies locally, saving taxpayers billions in the process.
Other arguments around building military hardware locally usually centre on creating jobs, even though these very same arguments could be applied to manufacturers like Holden and Toyota, whose subsidies were relatively small by comparison.
With these considerations in mind, it was interesting to read last night that the soon to be defunct car manufacturing plants in Elizabeth (Holden) and Geelong (Ford) are being considered as locations for local tank production, according to The AFR:
A German defence manufacturer is considering using part of the GM Holden factory in Adelaide to build armoured vehicles if it wins a big defence force contract…
Rheinmetall is studying the feasibility of setting up a regional manufacturing hub in Australia to sell military vehicles to South-East Asia…
Rheinmetall is one of several large firms vying for big chunks of a proposed $10 billion-plus project to build around 700 armoured vehicles for the Australian Army in a project known as Land 400 which is part of the federal government’s broader Defence Capability Plan…
Geelong Mayor Darryn Lyons is [also] leading a charge for the Victorian regional city to be the site for land combat vehicle construction.
So it appears the Coalition Government is seeking to replace car industry subsidies with subsidies for tank building, in turn ending “the age of entitlement” for one industry whilst beginning it for another.
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