The Abbott government seems to be unaware of the calamity that is quickly approaching. It is going to be a body blow, not just to unemployment levels and welfare payments, but also to manufacturing output due to the loss of $29 billion in local value-adding. In addition, the trade deficit will expand because a further 150,000 vehicles will have to be imported to meet demand – and Australia will also lose the benefit of Toyota's annual export of 90,000 vehicles to the Middle East.
Add to that the elimination of the car industry's capital expenditures, which were running at a reduced $1 billion a year after the Global Financial Crisis.
Contrary to popular belief, GM and Toyota were well advanced on planning for new models that would have been exportable. Hockey's 2014-15 budget papers showed the car industry was proposing to invest $3.8 billion in new models over the four-year cycle.