Carbon tax to undermine auto sector support: report

The Australian has reported that the recent federal government support to secure the short to medium term futures of Ford and General Motors Holden will be hampered by the carbon tax, which threatens to absorb millions of dollars of subsidies to the auto industry.

Based on Ford’s previous emissions, the carbon tax could see the automaker pay $3.3 million over the next four years, and up to $19.8 million more in higher costs from suppliers as a result of the tax.

The government has insisted Ford and other automakers will not face such steep costs, and that they and their suppliers will be able to offset some of the added costs. But the Federal Chamber of Automotive Industries said that automakers will be forced to bear the brunt of the carbon tax costs to remain competitive with imported cars that will not be subject to the tax, The Australian reported.

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