Taxpayers hoot Halting Holden | Aditya Karthikeyan

Explain about taxpayer money being spent trying

to save Holden.
Taxpayers hoot Halting Holden
Car manufacturers including Ford, Holden and Toyota are permanently
halting manufacturing cars in Australia. The Australian Government has
lent taxpayer money to Holden. General Motors Holden will permanently
halt its car production in Australia from 2017. The Australian government
had given Holden assistance for over a decade. This decision by the
government has sparked controversy among taxpayers about whether the
government had wasted taxpayer money giving Holden large amounts of
subsidies for over a decade.
In 2013, Holden promised that it would continue producing cars in
Australia for another decade but it did not keep its promise. The Australian
Federal Government had set up an assistance package for Holden which
consisted of a yearly amount of $250 million dollars for its subsidies. This
assistance package was set up as Holdens sales were lowering since
2001. Until 2013, this equated to $2 billion dollar assistance package to
Holden since 2001.When this deal was set up, Holden chairman, Mark
Devereux had promised the government that it would continue to
manufacture cars in Australia until at least 2022. All this taxpayer money
which was used to assist Holden produce cars until 2022 was a vain effort
when the car company had finalised its decision to cease car production in
2017. Therefore, $2 billion dollars of taxpayer money was wasted on this
vain cause.
Furthermore, the amount of subsidies which the government had given
Holden could have been given to future rising companies or other
companies which were on the verge of economical struggle. Holden was
visibly collapsing and was sacking Australian workers in its plants. After
being given subsidies of up to $250 million dollars per year, the company
was still weak. This clearly shows that Holden had no future producing
cars in Australia. As a result, taxpayer money seems to have been wasted
on attempting to keep Holden producing cars in Australia.
 Taxpayers hoot Halting Holden | Aditya Karthikeyan

(This image
shows the downfall in sales of Holden and Fords Australian made model
cars)

On the other hand, giving Holden the subsidies was not a total waste of
taxpayer money. Although it was a vain effort, it was estimated that up to
2900 workers would lose their jobs if Holden moved out. These 2900
workers only included Holden workers and did not include the workers
from companies that made mechanical parts for Holden. If Holden closed
down its manufacturing plants in Australia, the minute companies
manufacturing mechanical parts for Holden may also close down as they
would have no business. The government seems to have tried to protect
these jobs. Holden ceasing construction in Australia could be dangerous to
the economy as $4 billion dollars would simply disappear from the
Australian economy. Attempting to save Holden seems to not have been a
complete waste of taxpayer money. Although the subsidies given to
Holden only stalled their departure, it would allow time for Holden workers
to find employment elsewhere in another company or field. Therefore, the
taxpayer money used to keep Holden in Australia could not have been a
total waste.
However, even if the subsidies were not a waste of taxpayer money,
Holden should not have been given the assistance package for over a
decade. Even if the subsidies allowed Holden workers to find employment
elsewhere, it would not take over a decade to find other means of
employment. Taxpayers have to pay subsidies of up to $45000 per Holden
employee. Despite a flagrant drop in sales for over a decade, the
government had extended the duration of giving subsidies to Holden. This
shows that taxpayers are paying a large sum of money for a blatantly
failing cause.
 Taxpayers hoot Halting Holden | Aditya Karthikeyan

Ultimately, the subsidies that the government had given Holden for
over a decade was a clear waste of taxpayer money. Even if delaying
Holden leaving was done to help Holden workers find employment
elsewhere, over a decade of stalling the companys decision to cease car
manufacturing was unneeded. Holden had finalised to cease
manufacturing in Australia by 2017 which shows they broke their promise
to the Australian government about manufacturing cars in Australia until
2022 when receiving the subsidies from them. As a result, the government
had wasted taxpayer money by funding money to Holden for over a
decade.

References:
(2013). Governments urged to stop giving money to Holden. [ONLINE] Available
at: http://www.abc.net.au/news/2013-04-08/governments-urged-to-stop-giving-
money-to-holden/4617060. [Last Accessed 19/03/15].
Simon Lauder (2013). Holden reveals billions in subsidies. [ONLINE] Available at:
http://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-
subsidies/4604558. [Last Accessed 18/03/15].
Joshua Dowling and Stephen Drill (2013). Holden announces another 500 job
cuts, the bulk of them from South Australia. [ONLINE] Available at:
http://www.news.com.au/national/holden-announces-another-500-job-cuts-the-
bulk-of-them-from-south-australia/story-fncynjr2-1226615030091. [Last
Accessed 18/03/15].
(2013). Holden to cut 500 jobs. [ONLINE] Available at:
http://www.abc.net.au/news/2013-04-08/holden-to-cut-500-jobs/4616228. [Last
Accessed e.g. 31 August 11].