Rudd Government accused of grossly exaggerating car sales boost

August 06, 2013 | News | No Comments

Author: Joshua Dowling

The Rudd Government has been accused of exaggerating the forecast boost in sales of locally-made cars that will come from its “buy Australian” policy.

Secret documents obtained by News Corp also reveal the Federal Government has in fact been a major contributor to the decline in sales of locally-made cars – cutting the number it has bought so far this year by more than half.

In a major embarrassment to the Rudd Government, confidential industry figures show the Commonwealth bought just 1556 locally-made passenger cars from Toyota, Holden and Ford in 2012 – and only 335 were delivered in the first six months of this year.

Federal Industry Minister, Senator Kim Carr said the “buy Australian” policy across all levels of government could boost sales of locally-made vehicles “by over 18,000 units per year”.

However, figures show that local, state and federal governments combined last year bought only about 16,000 locally-made cars – and sales to state and local governments are down by 37 per cent in the first six months of this year.

Successive governments have encouraged the purchase of Australian-made vehicles but sales rates have fallen in recent years as various departments chase internal fuel economy fleet targets.

“I have no doubt that the government’s estimates are grossly exaggerated,” said Andrew McKellar, the former head of the Federal Chamber of Automotive Industries who is now the executive director of the Australian Automobile Association.

“To expect an overnight increase (in sales of locally-made cars) of that magnitude is totally fanciful.”

On Friday Senator Carr accused the salary packaging and fleet leasing industries of “over-egging the pudding” regarding their claims about the damage caused by the sudden changes to Fringe Benefits Tax rules.

The Federal Chamber of Automotive Industries forecast a 20 per cent drop in sales of locally-made cars over a full year if the FBT changes are not reversed, which the Coalition has vowed to do if it wins the September 7 election.

Official figures released yesterday showed the new-car market posted a July sales record but the industry has argued it will take several months for the slowdown to take hold.

Senator Carr yesterday confirmed the $200 million assistance package to Australian car makers to reduce the impact of the changes to the FBT – but was still yet to say how the money would be spent.