Senate debates

Thursday, 2 October 2014

Bills

Automotive Transformation Scheme Amendment Bill 2014; Second Reading

6:06 pm

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

AUTOMOTIVE TRANSFORMATION SCHEME AMENDMENT BILL 2014

The Automotive Transformation Scheme (ATS) is a legislated entitlement scheme that provides assistance to registered participants for the production of motor vehicles and engines, and for investment in allowable research and development, and allowable plant and equipment. The ATS provides two types of assistance: capped assistance via a special appropriation; and uncapped assistance via annual appropriation.

This amendment Bill is made to give effect to the Government's 2013-14 Mid-Year Economic and Fiscal Outlook (MYEFO) and Budget decisions in respect of the ATS. This Bill reduces the period of the ATS by three years and the total amount of capped assistance available by $900 million.

The Coalition announced it would reduce the ATS by $500 million in February 2011 and took this commitment to the election. The ATS saving measure in the MYEFO set out how we would achieve this.

In light of the decisions by the local car makers to cease manufacturing in Australia by the end of 2017, the Government determined that it was appropriate to terminate the ATS on 1 January 2018, which was announced in the May 2014 Budget. The three local car manufacturers, Ford, Holden and Toyota, have made it clear that the level of Government support was not the reason for their decision to cease manufacturing cars in Australia.

As set out in this Bill, the total amount of capped assistance for stage 1 will be reduced by $200 million to $1.3 billion (2011-2015) and stage 2 by $700 million to $300 million (2016-2018).

Despite these reductions, funding of approximately $700 million remains available under the ATS to support vehicle manufacturing and supply chain companies over four financial years from 2014-15.

As the Regulations provide that payment of assistance is made one quarter in arrears, the inclusion of the first quarter of calendar year 2018 in stage 2 allows for the final payment of assistance to be made for allowable investment and production undertaken during the final quarter of calendar year 2017.

This Bill will give effect to the Government's MYEFO and Budget decisions on the appropriate amount of assistance available under the ATS.

Passage of this Bill provides certainty for ATS participants about the level of assistance available for the final three years of the Scheme, which will assist their future business planning and decision-making.

Debate adjourned.