The decision by the Rudd and Rann governments to subsidise Toyota to build hybrid cars in Australia is a stupid one. We have just seen Mitsubishi run out of the automotive manufacturing business even with subsidies and unless there is a strong export market for the hybrid Camry then it will be the same for Toyota. This is bad policy.

I do not know why the automotive industry is seen as a such a necessary one for political patronage. It is not a large industry, there are certainly larger ones if the politicians want to buy votes, plus it is a shrinking and unprofitable one in many instances. Additionally parochial and nativist pride is diminishing in this area. Even so, bad policy remains bad policy.

Tim Dunlop makes the point that private capital investment is best suited to these decisions on market and economic grounds; a government is woefully inefficient in this area and remarks;

Is public money best spent on subsidizing private businesses in the way of the Toyota deal, or would the money be better spent on things where governments can really make a difference--public transport--and where no-one else is going to step into the breach?

I agree. There is the argument that capital intensive public transport such as light rail is middle class welfare, and that buses are not only cheaper but have greater utility in public transport delivery, however; it is not like there isn't a tonne of middle class welfare already, and long haul public transport from the suburbs and exburbs do aid in commuter choice.
Cam Riley: South Sea Republic. Freedom, liberty, equity and an Australian Republic.

Comments
  • Rudd and Brumby. I am sure that Rann would have subsidised any kind of car making about 6 months ago.