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Australian Automotive Industry in Terminal Decline

It’s rare that a week goes by in Australia and there’s not some news about a factory closing and jobs being lost. This week it’s a high profile company – Holden. Automotive manufacturing in Australia is no longer competitive in international markets due to rising costs. This has manifested as reduced demand for Holden vehicles and the announcement this week of the axing of 170 jobs at the Elizabeth manufacturing plant in South Australia. Many people are prediciting this is just the beginning of Holden’s eventual demise.

Along with tourism and retail, manufacturing in Australia is in terminal decline. It’s too expensive. Rising costs means we are no longer competitive in a world economy. The Gillard Labor Government is fueling these rising costs with a continual introduction of new taxes and tax hikes and by pandering to unreasonable union demands that force Australian labour rates to unsustainable levels. What do you expect from a corrupt union run government that lacks any ability to manage a budget?

The Australian economy is faring ok as we continue to be supported by the remnants of the mining boom. Our ability to rely on mining has already been diminished through the mining super tax which is reducing our international competitiveness in the mining industry. What happens when mining eventually declines? We’ll have nothing left. Our economy will be devastated  Maybe labor will counter the problem by increasing the carbon tax and mining super tax whilst getting us to learn Asian languages? This is what Gillard suggested in her Asia white paper. Is learning an Asian language going to give us a competitive edge in a market where we are too expensive? Wouldn’t reducing costs be a better alternative? If I was running a business I’d rather hire a translator and have a lower cost base so that I could focus on delivering a cost effective product.

The Labor government is adding to the cost base of Australian businesses. Australia cannot tolerate this burden forever. I hope this arrangement is corrected by a change in government before it’s too late.

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