The decline and fall of the Australian automotive industry

Abstract

This article assesses the historical political economy of the Australian automotive industry alongside the paradigmatic policy shift in economic policy away from protection towards neoliberalism and globalisation. It focuses on the politics of policy change and government assistance, providing a detailed historical narrative of the development and decline of the Australian automotive industry. From the mid-1980s to the mid-2010s, policy-makers oversaw the decline and fall of the Australian automotive industry. The process of decline occurred within a long-term cycle of new assistance, declining protection, new investment, inadequate restructuring, weak profitability, declining market share, and new assistance. Each cycle, however, was unable to stave off renewed crisis and eventual demise. Over the same period, Australian policy-makers transformed the economy from one of the most protectionist in the developed world to one of the most open. The article outlines the impact of neoliberalism on the automotive industry and analyses what the decline of the industry tells us about how the neoliberal policy structure operates in the ‘actually existing’ political economy. It argues that while the burgeoning neoliberal policy structure in the 1980s and 1990s acted to restrict the range of policy choices available for restructuring the industry, the domestic politics of industry assistance acted to restrict the neoliberal colonisation of the policy agenda. Neoliberal governance has had to contend with political imperatives for continuing assistance, while, at the same time, those political imperatives have been increasingly shaped by neoliberalism.

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“…Conley (2022) recently reviewed the “paradigmatic policy shift” (p. 415) in the Australian government's overall approach to industry policy, that led to reduced import tariffs, and reduction in other direct and indirect subsidies, as the Australian approach went from protectionist of its high‐cost industries, to highly open and unprotected, hence leaving industries and companies needing to survive or decline against global market forces:

From the mid‐1980s to the mid‐2010s, policymakers oversaw the decline and fall of the Australian automotive industry. The process of decline occurred within a long‐term cycle of new assistance, declining protection, new investment, inadequate restructuring, weak profitability, declining market share, and new assistance.

…”

“…Each cycle, however, was unable to stave off renewed crisis and eventual demise. (Conley, 2022, p. 215).…”

“…At the same time, consumers were quickly moving away from traditional rear-wheel drive petrol engine sedans. Conley (2022) recently reviewed the "paradigmatic policy shift" (p. 415) in the Australian government's overall approach to industry policy, that led to reduced import tariffs, and reduction in other direct and indirect subsidies, as the Australian approach went from protectionist of its high-cost industries, to highly open and unprotected, hence leaving industries and companies needing to survive or decline against global market forces:…”