Car Plan Gives Rudd's Eco-credentials A Greener Hue
The Age
Wednesday June 11, 2008
The Government has made a wise first use of its green car fund by allocating money to help build hybrid vehicles in Melbourne.
IT PROMPTED predictable sneers from ideologues about "business welfare", but yesterday's announcement by Prime Minister Kevin Rudd that $35 million would be allocated to help Toyota build hybrid Camrys at its Altona plant is the firmest indication yet that the Government is serious about responding to rising oil prices and global warming. So, too, is the Brumby Government, which has also invested a sum, as yet undisclosed, into the Melbourne plant.In recent weeks Mr Rudd has drawn fire from several quarters, including this newspaper, for allowing himself to be lured into the populist trap that the Opposition Leader, Brendan Nelson, set with his proposed five-cent-a-litre cut in petrol excise. The Government responded by touting the merits of its FuelWatch monitoring scheme, and Australians then had to endure the spectacle of the leaders of the nation's two major political parties trying to outbid each other with measures for slicing a few cents off petrol prices while consigning to the too-hard basket the deeper issue of how to wean the country from dependence on the petrol engine.The first sign that the Government was not going to allow itself to be wholly distracted, however, came last Thursday, which was World Environment Day. Mr Rudd chose the occasion to tell Parliament that the Government was prepared to use its $500 million Green Car Innovation Fund to back manufacturers that are willing to invest in hybrid cars. That pledge was made good with the $35 million the Prime Minister announced yesterday for Toyota. And by making that allocation from the fund, he is taking the Government down a path that will increasingly diverge from that taken on manufacturing support by both Labor and Coalition governments in the past three decades.That Mr Rudd is intent on doing this was evident from the declaration he made in Parliament, which he repeated yesterday at his news conference in Nagoya with the president of Toyota, Katsuaki Watanabe: "I don't want to be the Prime Minister of an Australia that doesn't manufacture things any more." These words can be taken as confirmation of several things: that the 10% tariff on car imports, which is scheduled to drop to 5% in 2010, will probably stay in place; that the Government will not be constrained in its approach to industry policy by an abstract doctrine that insists all assistance is bad; and that the Government recognises that its response to the problems of global warming and peak oil - problems that affect almost every area of policy - must begin with the economic and social structures we actually have.In other words, policy must be made for an urban society that is still organised around the private car and for an economy in which car production continues to be a linchpin of manufacturing. And recognising these things to be so is sufficient answer to the "business welfare" and "all assistance is bad" taunts. If the Government were proposing to prop up the car industry at any cost, that would be cause for concern, but it is not. Mr Rudd has offered Toyota $35 million, a relatively modest sum, which will be used to help tooling up for the 10,000 new Camrys that Toyota plans to build at Altona from 2010. The new model will reduce petrol consumption and greenhouse gas emissions by a third compared with the standard Camry.Critics will point out the obvious difficulties in the scheme. Hybrid cars still sell to a niche market, because they are more expensive than standard cars, and the total expansion at Altona may result in only a slight increase in the number of jobs in return for the $35 million and subsidies from the State Government. There is a question, too, about whether the new Camrys really are cutting-edge technology: some European car manufacturers claim to be producing diesel-electric cars with even better fuel consumption.In response to that question, it may be said that it is easier to develop an existing relationship than one which does not yet exist. Simply, in dealing with Toyota the federal and Victorian governments are dealing with a company that already builds cars here, and which has now given Australia an opportunity to become part of the global shift to hybrid cars. And as for the scale of the hybrid Camry operation, what was announced yesterday is a beginning. By the time the first new models are rolling out in 2010, it is likely that the cost of fuel will be making hybrid cars increasingly competitive, despite differences in purchase prices for the cars themselves. However modest a start, this is a landmark deal for Victoria and a step in the right direction that at last recognises the new realities of world economics.
© 2008 The Age