Putting the Brakes on Australia’s Automotive Manufacturing Industry
Unfulfilled funding promises are hurting our industry.
Last year the AAAA stated we were cautiously optimistic about the government’s announcement of the National Reconstruction fund, totalling a whopping $15 billion which sought to invest in Australian manufacturing companies that will be impacted by the transition to cleaner energy.
A year later the announcement of the Future Made in Australia fund, which also has an eye-watering $22.7 billion budget allocation, gave us hope that money would go to projects and industries that need it, but three months on from that budget announcement many in the industry don’t know who or what projects are eligible.
The lack of actionable progress on these funds highlights a broader issue of government announcements without follow through which are exacerbating the problems they are attempting to fix.
The commitment to increase manufacturing capacity means that many Australian manufacturers spend countless hours trying to evaluate how they can leverage funding only to wait months for formal guidelines or funding approval to be granted.
This pattern not only hurts Australian innovation and growth in key sectors but also erodes trust in governmental funds.
For the automotive manufacturing industry, these unfulfilled promises are particularly concerning.
The sector is already navigating complex challenges, including global supply chain disruptions, technological advancements in ADAS and EVs, stringent regulations and difficult business conditions.
The promised funding could provide crucial support in adapting to these challenges, fostering innovation, and maintaining competitiveness on the global stage.
However, without clear guidance and swift allocation of funds, these opportunities remain out of reach.
Governments need to step up. If money is allocated for these important goals, they should be using these funds to support our industry, not recycling it into the next announcement.
Many of the pain points with these funds is the complexity of the eligibility requirements.
Instead of catering to small and medium businesses which have innovative ideas, in many cases, they require a thesis to be able to understand and complete the reporting requirements.
We acknowledge that the government wants to get ‘bang for buck’ with projects like the National Reconstruction Fund and the Future Made in Australia fund, but limiting it to the select few that can show a guaranteed 10-times return is near impossible for many small and medium-sized automotive manufacturers.
On the one hand, governments are telling our industry we need to gear up and get ready for the EV revolution, but with minimal share of the current car parc it is a business strategy that involves risk – risk that our sector should not have to burden alone.
At the end of the day, it is governments that are driving EV adoption a lot faster than consumers, but manufacturers are lacking clear direction from government.
If we want manufacturing to continue to thrive it is vital that a clear automotive manufacturing roadmap is developed in partnership with the federal government.
Our industry is ready to evolve into the EV space producing global quality products as we have always done, but we need a plan to ensure government and industry are on the same page.
While there is a lot of industry-wide disappointment with the administration of these two funds, we hope that the government cabinet restructure provides us with some new optimism.
Instead of lumping these funds in with other portfolios, the government have announced a new Assistant Minister for a Future Made in Australia, The Honourable Tim Ayres.
This position has to be more than just another ceremonial vanity announcement. The new assistant Minister needs to draw a line in the sand and decide if he wants to be on the side of automotive manufacturers that have contributed so much to this country.
The time for glossy announcements is over, our manufacturing industry needs action now.
If you would like to offer your thoughts on this subject, please email advocacy@aaaa.com.au
This article was originally published in the August Australian Automotive Aftermarket Magazine.