Australian Government Invests $200M to Help Automakers image

According to ABC News, the Australian Federal Government will invest $200 million in the following two year to help local automakers.

The relationship between the Australian Government and automakers has been affected by the recent changes made related to the fringe benefits tax (FBT) rules. In July, Australia officials announced they will change the FBT to be able to pay for the decision to eliminate the carbon tax earlier than previously stated.

According to South Australian Premier Jay Weatherill the $200-million investment is clearly a response to the FBT tax changes and added that the money will be used to ease the burden on automakers.

“This is a response – whether they want to keep it separate is a matter of semantics,” he said. “Whether it’s an adequate response is something that we’ll sit down with the car manufacturing companies and evaluate.”

Automakers believe that these changes will impact the new vehicle market, especially the locally-manufactured vehicles. Motor Trade Association of South Australia chief executive John Chapman doubts that the money will be enough to compensate for the damage done by these changes.

“Already we’ve seen significant orders cancelled out there amongst the dealers, and dealers are now considering – if that continues – putting off staff,” said Chapman.”It’s starting to have some very real effects.”