Cash for Clunkers Mark II – Another Labor Dud

09-May-2011

Labor’s automotive industry policy remains a mess and as chaotic as ever after its latest Budget leak – that it will introduce Cash for Clunkers Mark II.

Its consideration of an instant writeoff for small businesses for car purchases needs to be greeted with enormous suspicion by Australian taxpayers.

By again creating artificial handouts to encourage people to buy new cars, it’s clear the Government hasn’t learnt a single lesson from its Cash for Clunkers policy howler – which went up in flames earlier this year. 

This policy is simply Cash for Clunkers by another name – with the main difference a two-year deferral of the start date of payments until after the next election.

Allowing businesses to begin receiving a new $5,000 inducement from late 2013 will distort sales of cars in the Australian market – and force them lower in the period leading up to the change. 

It would also favour many overseas imports over Australian cars, as the flat $5,000 fee would have greater proportional impact for lower-priced vehicles. 

As much as Labor and the Greens try to spin these changes, they have all the hallmarks of another hastily-devised stunt that won’t do anything to assist Australian car businesses and workers. 

They also come after Labor’s astonishing U-turn on automotive policy in January when it abolished its much-hyped Green Car Innovation Fund, and smashed a $96 million hole in the LPG Vehicle Scheme.