A fluoro nightmare for the Coalition

Tony Abbott had no choice but to stick with Coalition policy to end auto subsidies by 2015 and it could come back to bite ahead of the next election.

Tony Abbott has ended the speculation about a shift in Coalition policy on subsidies for the car industry, confirming a day after returning from holidays that he will stick to the Howard government timetable for ending assistance by 2015, in contrast to Labor's plan to carry on with subsidies to 2020.

This move looks 'brave', but only in the sense in which Sir Humphrey Appleby used that term in the comedy series 'Yes Minister' – mainly to strike fear into the heart of his feckless minister.

This decision will not have been taken lightly given the heated comments from some Coalition MPs in the past week. Ian Macfarlane, co-author with Sophie Mirabella of the review of the parties' policy, last week told the Sydney Morning Herald the industry would "collapse entirely" without continued subsidies. He's most likely right.

Macfarlane will be wise enough to keep quiet on this issue through to the next election, but Abbott will have his work cut out for him keeping a lid on more vocal critics such as Barnaby Joyce, who has argued that if it's good enough for taxpayers to subsidise renewable energy (which, of course, he doesn't think is right), then they can also throw large amounts of money at the auto industry. Hmm.

Abbott was effectively snookered on this issue. The Coalition's decision not to match Labor's additional $500 million of support for the industry is a reminder of the fiscal strait-jacket it will wear going into the next election. Its pledges to repeal both the carbon tax and mineral resources rent tax mean Abbott pretty much has to keep cutting expenditure wherever possible and will just have to weather the political damage from looming plant closures (whether or not they actually happen before the election).

The opposition leader tried to link the carbon tax and auto subsidy issues yesterday, with a spokesman telling a local Geelong newspaper that "based on its own figures, the Australian car industry will be $40-$50 million better off under a Coalition government because it won't be slugged with the world's biggest carbon tax." That may be so, but to date the car manufacturers have not threatened to leave the country because of the carbon tax.

It is quite wrong to suggest, as Jeff Kennett did over the weekend, that political fallout from this decision will be contained within electorates where workers are directly affected – mostly safe Labor seats – or amongst "enthusiasts".

That view might make sense in the boardroom or in upmarket suburbs, but key outer suburban electorates of our major cities teem with 'enthusiasts' (admittedly mostly male) and it's worth remembering that a very large slice of present-day voters grew up riding in the back of Holdens and Fords – only the younger cohorts grew up in Toyotas and Mitsubishis (and we've already lost the latter manufacturer anyway).

Going into the 2013 election Labor will tap into generations of nostalgic attachment to the Ford and Holden brands and make car plants a proxy for the entire manufacturing sector. Manufacturing minister Kim Carr is already focusing his attack on Abbott's proclivity for "putting on the fluoro vest and going around to factory after factory and expressing sympathy with the struggles that blue collar workers are facing."

Labor also likes to put on the fluoro vest, but when steel industry jobs were threatened by last year's passing of the Clean Energy Futures (carbon tax) package it decided not to be 'brave' at all. It tacked on a $300 million assistance package to save steel industry jobs, outmanoeuvring Abbott who had spent several weeks prior visiting steel workers. Too much fluoro can be dangerous.

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