Fed: Union warns thousands of jobs lost if car tariffs cut

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Fed: Union warns thousands of jobs lost if car tariffs cut

By Jim Hanna, Economics Correspondent

CANBERRA, Dec 12 AAP - Thousands of jobs would be lost if the government went aheadwith a reported decision to cut tariffs on imported cars to five per cent, a key unionsaid today.

The government is about to unveil a multi-billion dollar assistance package for thecar industry after Cabinet backed proposals in a Productivity Commission report.

But the move to cut tariffs on imported cars from 10 per cent to five per cent in 2010drew protests from the Australian Manufacturing Workers Union (AMWU), which called thedecision a disgrace and not in Australia's best interests.

AMWU national secretary Doug Cameron said the commission's own modelling showed loweringtariffs to five per cent would cost thousands of jobs and have no positive impact on theAustralian economy.

"The decision to cut tariffs in the car industry by the year 2010 is ideological madness,and the government can expect a fight from unions and the community who will not let thousandsof jobs go easily," he said.

Cutting protection would expose Australia's car industry at a time when other countrieswere moving to protect their own industries, Mr Cameron said.

But he welcomed indications the government had backed away from tying future car industryassistance to industrial relations changes.

"(Workplace Relations Minister) Tony Abbott's agenda has not won in this industry -sensibly, the employers have rejected his blueprint for conflict and division," he said.

But Labor's industry spokesman Craig Emerson said while the government declined tolink future assistance with industrial relations reforms, it was clear it still preferreda confrontational approach in the car industry.

"It has told car makers to take legal action against unions and for that purpose hassupported the creation of a $1 million fighting fund," he told reporters.

"We have long argued that cooperation rather that confrontation is the best way toproceed with the car industry, yet the government is intent on pursuing its aggressiveideological confrontationist agenda."

Dr Emerson said cutting tariffs on imported cars to five per cent was unjustified andprovided no benefits.

"Labor opposes any further reduction in car tariffs below 10 per cent pending a furtherreview by the Productivity Commission in 2006/07."

Studies by the Centre for Policy Studies and economic consultancy Econtech both concludedany effects on national income from cutting car tariffs to five per cent would be negligibleor negative, he said.

"So even the dry economists argue there is no particular benefit in going below 10per cent, Dr Emerson said.

AAP jph/kjp/ldj/br

KEYWORD: TARIFFS NIGHTLEAD