PM cans automotive industry subsidies, rebates

Prime Minister Julia Gillard delivered an address in Canberra on Thursday, 27 January, outlining a plan to impose a levy on taxpayers earning $50,000 or higher. The levy is 0.5 per cent of the gross, but it's not the government's sole means of funding infrastructure rebuilding in Queensland and other flood-affected states.

Included among a raft of cost-saving measures were three that will impact in various ways on the automotive industry: the Green Car Innovation Fund, the Cleaner Car Rebate Scheme and the LPG Vehicle Scheme.

Here's what the PM (pictured) had to say on the environmental initiatives to be abolished:

"I am abolishing, deferring and capping access to a number of carbon abatement programs.

"These include the Green Car Innovation Fund, Cleaner Car Rebate Scheme, the Carbon Capture and Storage Flagships and Solar Flagships, the Solar Hot Water Rebate, Green Start Program, Solar Homes and Communities Plan and the Global Carbon Capture and Storage Institute.

"The key to these carbon abatement program savings is my determination to deliver a carbon price.

"There is complete consensus that the most efficient way to reduce carbon is to price carbon. Some of these policies are less efficient than a carbon price and will no longer be necessary – others will be better delayed until a carbon price’s full effects are felt."

Savings from the cessation of these programs will contribute to a $5.6 billion program, which will cover costs of reinstating flood-affected infrastructure ($1 billion outside Queensland and $3.9 billion within the northern state).

While opinion seems divided where the Green Car Innovation is concerned, the Cleaner Car Rebate Scheme is not likely to be missed. The consensus within the industry appeared to be generally opposed.

Predictably, the Opposition has attacked the government for its new tax, but neither leader of the Opposition Tony Abbott, nor Shadow Treasurer Joe Hockey has commented on the cost-cutting initiatives mentioned by the Prime Minister.

A transcript of the full speech has been published at the following web address: http://www.pm.gov.au/press-office/i-see-what-needs-be-done-and-i-will-do-it-speech-national-press-club

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