Abbot Government backs away from cuts to the ATS

cuts to the ATS

Last Tuesday 7th April, the Abbott government announced that it has abandoned the plan to cut $900m from the Automotive Transformation Scheme (ATS), which supports the car making and auto components industry.

Industry Minister Ian Macfarlane, said that the “decision has been made, primarily to ensure that the industry goes the full distance in terms of its already slated course at the end of 2017”.

With the announcement of the end of the ATS in January 2018, car makers are concerned about the supply of components. They are demanding a reliable supply of car components until the local car assembly ends in 2017.

Despite the fact that the unplanned cuts to the ATS are now not going ahead, only $500m from the $900m will actually be realised as it was the amount allocated to the ATS until the end of 2017. The remaining $400m were assigned for the period beyond 2017 and as Ford, GM Holden and Toyota will cease car manufacturing by then, it seems that the ATS may never have access to this money.

“The scheme will continue to operate as legislated and how much is spent under the scheme will depend entirely upon applications that are made to the scheme and the ordinary operation to the scheme”, the Prime Minister said. Then, if the distribution of the funds is related to the amount of cars that are actually sold it is likely that the draw on the funds is going to be limited as the industry is winding down.


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