Author(s): Ian Porter
"The Australian car industry is almost 120 years old, and has become been part of the nation's industrial and social fabric. In 1949 the federal government encouraged the industry to invest here so the country could make weapons of defence. Carmakers would not otherwise have made the investment because the market was too small, and it still is. But with protection in the early years and co-investment more recently, the industry thrived, and dragged Australia out of the farm era and into the ranks of industrialised countries. The taxpayer investment has paid off handsomely, in jobs, in technology diffusion, and in social cohesion. It has also paid off financially. These days, income tax paid by automotive workers repays the taxpayer three times over. The industry has provided a great return on the taxpayer investment. But this was not good enough for prime minister Tony Abbott, his austerity-minded treasurer, Joe Hockey, or his acting prime minister, Warren Truss. They decided to bully the carmakers into leaving so the government could save a few budgetary dollars and redirect a small proportion of the money to Truss's farming constituents. What Happened to the Car Industry?