Trucks to ease auto industry transition

The Senate Economics References Committee has thrown its support behind a Truck Industry Council proposal to encourage the modernisation of the nation's ageing truck fleet, stating the plan would help bolster local automotive manufacturing as the end of car production draws near, while also delivering safety and carbon reduction benefits.

The approval of the TIC proposal was one of 20 recommendations handed down yesterday (December 1) in the committee's final report on the future of Australia's automotive industry.

The TIC estimates that around 30 per cent of the nation's truck fleet is comprised of vehicles manufactured before 1996, which pre-date any emissions standards. To encourage operators to modernise their fleets and accelerate local production, the TIC has suggested a reprioritisation of the fuel tax credit rebate, which is currently applied to all on-highway trucks irrespective of their emissions rating.

The TIC estimates that such a scheme could "reasonably lead to an additional 3300 trucks being manufactured here in Australia each year for the next five years and a 66 per cent increase in local production", with flow-on benefits for Australia's broader automotive industry.

While this would apply to operators buying new trucks, the TIC suggests that a further investment allowance be introduced to encourage operators to buy later-model used trucks, to which less onerous emissions standards still apply.

The benefits outlined by the TIC are numerous: the truck industry receives a major boost, helping smooth the transition for the auto industry in the wake of the cessation of local car production, and older high-emissions trucks are replaced by newer, cleaner and invariably safer ones.

The Senate Economics References Committee has embraced the proposal, stating: "It is attracted by the broad array of benefits across a variety of areas and by the redirection of existing funding."

The committee's final report has urged the Government to carry out a feasibility study of the TIC proposal, recommending that "Pending a favourable evaluation, Government should seek to implement this proposal as a matter of priority to assist the automotive manufacturing industry to adjust to the cessation of passenger motor vehicle production in 2017 and as part of the broader reform agenda to reduce carbon emissions."

However, Coalition senators have warned that denying fuel tax credit rebates to owners of pre-1996 trucks, many of whom are sole operators, would be "harmful to a vital element of Australia's transportation sector". Tabled in the Government Senators' Dissenting Report, the senators claim the plan would drive up costs that would be passed on to other sectors, and that any such policy would be inconsistent with the Coalition's objectives to support small businesses and reduce regulatory burden.

The report also calls on Government to form an Automotive Industry Taskforce, comprising government, industry and union representatives, to guide the industry through and beyond the transition, and stresses that while Australia will have a viable auto industry after 2017, its size and scope will ultimately be determined by Government policy.

Click here to read the committee's final report.