$16m investment to drive diversification in the auto supply chain

The Australian Government has announced a $6 million investment in a series of projects worth $16 million from the first round of an innovative transition program to support SA and Victorian communities affected by the wind-down in domestic car manufacturing.

Twelve Australian companies that are suppliers to the automotive industry will benefit from the Automotive Diversification Programme, one of the significant transition programs in the Australian Government’s $155 million Growth Fund, said Minister for Industry and Science Ian Macfarlane.

“The Australian Government is working with industry and components suppliers to identify new opportunities for investment and jobs growth. While the global car makers have made their independent decisions to leave Australia by the end of 2017, it’s innovative investment and pursuing global supply chains that will ensure Australia’s extensive automotive skills base is retained and enhanced,” Macfarlane said.

“There are five streams of the Growth Fund aimed at supporting workers and communities make the transition from the automotive sector and plan for the future.

“Australia is a skilled manufacturing country, and through the Growth Fund, as well as the initiatives in the comprehensive Industry Innovation and Competitiveness Agenda, we are working with industry to ensure Australia develops its manufacturing industries by focusing on areas of competitive strength.

“This is an innovative program that is helping companies to either expand into the international automotive market or transition into new sectors.”

The fund was targeted at the regions where the wind-up of automotive manufacturing would have the biggest impact, said Assistant Minister for Education and Training, Senator Simon Birmingham.

“As well as encouraging new investment in manufacturing and product innovation, the $155 million Growth Fund will help workers build on existing skills and gain new skills that are transferable to other sectors, such as health services, food and agriculture, tourism and education, as well as advanced manufacturing.

“Our government is ensuring we boost employment prospects of employees and students and lift business productivity, ultimately improving the competitiveness of Australia’s economy.”

Macfarlane said the government would continue to support businesses, workers and communities affected by the closure of the car industry, through a comprehensive series of policies aimed at transition assistance and building a sustainable, long-term future for Australian manufacturing.

The government will maintain the Automotive Transformation Scheme (ATS) in its original form as legislated. The ATS will remain in place and will come to a natural conclusion at the end of 2017 when Holden and Toyota end their Australian manufacturing operations, following Ford in 2016.

Most of the savings from the program will still be realised, based on production volumes as Ford, Holden and Toyota wind down production based on their independent decisions to end domestic car manufacturing.

The government will continue to support component makers in transitioning their businesses to cope with the decline in production as a result of the independent decisions of the car makers to end manufacturing in Australia. The Growth Fund is a joint investment fund in which the Australian Government is supporting companies that are investing in their own future. The South Australian and Victorian governments have also contributed to the fund. Applications for round two of the program opened on Tuesday, 10 March. The ministerial guidelines have been expanded to include grant support for investment in state-of-the-art second-hand capital equipment and reconfiguration expenditure. Interested companies can find out more by visiting www.business.gov.au.