The Opposition has called for amendments to a car industry assistance program, after it emerged that a key Government export agency has agreed to supply GM Holden with a $200 million line of credit to help secure its export operations.
The Holden deal was confirmed by the Government’s Export Finance and Insurance Corporation late on Friday, but only after the media got wind of the as-then unannounced deal.
The line of credit, which EFIC says is subject to commercial terms and conditions, will help underpin Holden’s financial position, which has been put under stress by the bankruptcy of its parent company, General Motors.
“Holden is an iconic Australian company and EFIC is delighted to support GMH’s ongoing export activities,” EFIC managing director Angus Armour said in a statement.
The Holden deal has again put the issue of Government assistance to the automotive industry in the spotlight.
The Government, led by Industry Minister Kim Carr, has announced $6.2 billion in assistance for the sector, despite the fact that the industry is struggling badly on a global basis and Australian car markers have racked up big losses.
Part of the assistance package is the $3.4 billon Automotive Transformation Scheme, which will provide grants to car companies for research and development and investment in plant and equipment.
The bill supporting the ATS is due to go before Parliament this week, but Opposition Industry Minister Eric Abetz says he will move amendments to attempt to improve the transparency and accountability of the scheme.
The Opposition wants it to be a requirement of the scheme that a report detailing how the money has been spent be given the Parliament each year.
However, Carr has told the Australian Financial Review that releasing the details of individual payments would expose companies’ investment plans to their competitors.
The ACTU has also warned the Opposition and the Greens that blocking the legislation could put jobs in jeopardy.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
