No more subsidies to vehicle industry!


The Toyota Motor Corporation, in a dead heat with US giant General Motors (GM), is now the most profitable car maker in the world. Last financial year TMC was valued at US$215 billion. This, however, didn't stop the federal government from offering Toyota even more money.

On May 8, TMC president Katsuaki Watanabe announced the company had made its highest ever results in both revenue and profits over the 2008 financial year.

The New York Times reported on May 9 that TMC's 2008 earnings reached $16.7 billion. Even though Toyota is forecasting a decline in profits for 2009, the result of a weak US dollar and rising costs, it still expects to earn a cool $12.5 billion.

There is no doubt that Toyota's rise and rise can be attributed to the growing popularity of its range of smaller cars. To keep up with record demand, especially for its Camry and Corolla range, the company is planning to increase production capacity worldwide.

Despite TMC's profitability the federal government announced on June 10 that it would give A$35 million towards the production of 10,000 hybrid Camry cars at its Altona operation. Friend of big business, Victorian premier John Brumby also chucked in $34 million of taxpayer money.

Toyota is pleased with the present but, as TMC's Australian spokesman Mike Breen told the June 11 Australian, the company would have produced the hybrid cars anyway. Stating the obvious, Breen said: "It would have happened regardless and we wouldn't bring it to market unless we're going to make money".

Nervous about a possible public outcry, Toyota issued a statement defending the combined $69 million subsidy as "critical to securing local production".

Tim Gooden, Geelong Trades and Labor Council secretary,told Green Left Weekly that the Toyota subsidy was a waste of public money. "The hybrid Camry is no more fuel efficient, or environmentally friendly, then some small four cylinder cars. Demand for electric cars might well make the hybrid redundant in a few years."

He said that the "green" Camry was a fraud, and subsidising the company "only perpetuates the illusion that something is being done about climate change". "The real solutions to climate change are not to be found in the promotion of more cars."

The most recent cash gift to Toyota is not an isolated case of government subsidies to the motor industry, Gooden continued. For decades, Coalition and Labor governments have shovelled billions of dollars into the pockets of transnational companies under the guise of "keeping jobs in Australia and strengthening the economy".

Federal government subsidies are delivered through a range of schemes such as the Automotive Competitiveness and Investment Scheme, the Cooperative Research Centre for Advanced Automotive Technology, fringe benefit tax concessions for company cars, tariffs and additional state government grants like the one mentioned above.

These hand -uts are now complemented by the $500 million Green Car Innovation Fund, a new subsidy announced by PM Rudd on World Environment Day, to be available from 2011. The fund is supposed to be an incentive for local car manufacturers to invest in and produce "green" cars. Rudd's $35 million gift to Toyota is to come from this new fund.

The $500 million car fund has been lauded by the car industry's peak body, the Federal Chamber of Automotive Industries, and the Australian Manufacturing Workers Union's vehicle division as a good example of the government's seriousness to help industry, protect jobs and respond to climate change.

Gooden disagrees. He told GLW that despite a bipartisan agreement to pump billions of dollars into the car industry, at least 7500 jobs had gone over the last four years.

"Since 2001, Mitsubishi in Adelaide received close to $300 million in government handouts. But it closed up shop earlier this year and sacked about 1000 workers. Companies are private entities, and their aim is to make money. They have no obligation to governments or workers."

Gooden continued: "If the government was serious about climate change and protecting jobs, it would stop propping up dying and environmentally damaging industries. We need to put money into sustainable technologies, energy and research which will offer environmentally sustainable solutions and ongoing jobs.

"The government should take over industries that go bust, and let the community, rather than the market, decide how to best meet its transport needs. Really, there should be a national plan to reduce our reliance on cars.

\"The starting point for this is to dramatically expand public transportation, increase frequency and reduce ticket prices, as well as expanding cycle paths and car exchanges. This can easily be done without losing jobs. Indeed, more jobs will be created this way."