The Australian Federal Government has announced a $6.2 billion rescue package to bailout the struggling Australian auto industry. The package will be distributed over a period of 13 years, until 2021, and is designed to allow our automotive industry to breathe during the current financial crisis. 

The Senate voted down the increased luxury car tax (LCT) yesterday, but in response the Rudd Government announced it would re-introduce the bill as soon as possible when the senate returns in two weeks. As the political power struggle continues, however, car dealers and more importantly, car buyers, are left in limbo regarding the taxes they may - or may not - have to pay on their next purchase.

The review of the automotive industry led by Steve Bracks today released its final recommendations, and chief among them is that the government should double its Green Car Innovation Fund (GCIF). The review also recommends that all vehicles, including those from the commercial transport sector, should be included in the carbon emissions trading scheme (ETS) to help further encourage the local industry to shift toward production of more environmentally conscious vehicles. Finally, contrary to recent calls for relief by local car manufacturers, the Bracks review has advocated adherence to the policy of reducing tariff protection.

Nick Xenophon’s rejection of the FuelWatch scheme could put the measure on the fast track to a quiet death in the upper parliament, as the Independent senator’s support - along with the cooperation of Family First’s Steve Fielding and the Green Party - had been considered essential to secure the bill’s passage.

Although it’s not currently subject to the same excise tax as petrol, LPG will be protected from price rises after the implementation of the new Carbon Pollution Reduction Scheme (CPRS) and its accompanying emissions trading scheme (ETS). The announcement was made by Climate Change Minister Penny Wong to allay fears that users of the less emissions-intensive fuel may not be compensated because of LPG's different tax structure to petrol.

The government today released a green paper for its proposed Carbon Pollution Reduction Scheme (CPRS), including in its report a decision to reduce the excise on petrol on a cent-for-cent basis against the carbon emissions trading scheme for the first three years. The overall result will ensure that fuel prices won’t be affected by the new emissions trading scheme, which is set to come into effect in 2010.