Yesterday’s announcement of massive subsidies for the car industry is a big victory for industry minister Kim Il-Carr and the auto lobby. But it is a big defeat for consumers, taxpayers, and alternative beneficiaries of government largesse. On my rough calculation, every taxpayer will contribute the best part of $700 to this plan (where is suspicion of foreign multinationals when you need it?).
My CIS colleague Stephen Kirchner points out the additional hidden costs in diverting resources away from more productive uses.
And in the latest issue of Policy, Malcolm Roberts gives the sorry history of car industry protection.
We can be sure that this latest scheme, like all those before it, will fail to make the car industry viable, and this will not be the last of the corporate welfare bail-out packages.
Update 12/11: Shaun Carney’s argument for the subsidy. Summary: Other industries, and other countries, have stupid policies, and therefore the car industry deserves a stupid policy as well.