Australian government has supported the car

Australian government has supported the car manufacturers of the country for
several years as it has become difficult for the manufacturers to continue
operations inside Australia. Holden has received around $2.2 billion from the
government as subsidy over the last decade. In August 2013, the government
pledged another A$200 million to bailout the car manufacturers in the country.
All the manufacturers in the country have laid off thousands of workers
recently. The anger of the workers and the unions over the corporations and
the government has created a problematic situation for the policymakers to

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resolve. The government reduced tariffs significantly for countries that did not
do the same for Australia. The exchange rate policy has also caused several
objections to be put on the government for mismanaging the economy and for
being careless regarding the protection of local manufacturers. Reduction of
tariffs along with a strong Australian dollar has also led to higher imports,
lower exports and higher costs of production.
Economic
Australia is the 12
th
largest economy in the world with 3% GDP growth
rate. Services contribute the most to the Australian economy (70% of GDP)
while industries contribute around 25% and agriculture around 5%. Australia
finds itself in a very favorable position as compared to other developed
economies as its Net Debt as a percentage of GDP stands at 13%. Per capita
GDP is $40680. Inflation rate is estimated to be around 2.5%. Exchange rate
of Australian Dollar per US dollar stands at 0.963, which clearly indicates the
strong position of the Australian currency, which is also one of the most traded
currencies in the world. AAA rating for Australia was awarded by major credit
rating agencies which points to the favorable economic environment in the
country for business. Unemployment rate stands at more than 5% in the
economy.
Main industries include mining, transportation equipment, food, chemicals and
industrial products. Australian Manufacturing is counted now amongst the
most underperforming ones in the developed world. Manufacturing and
services sectors have been contracting while finance; insurance and real estate
sectors are on the rise.
The Australian economy had grown for the last 17 years before the global
financial crisis hit the world economy. The cuts in the interest rates to historic
low levels reduced cost of debt for businesses. The Australian economy
survived the crisis but the growth has remained slow.
The car manufacturers have been cutting thousands of jobs since the year
2012. Ford announced closure of its manufacturing facilities, as its locally
produced cars are not any more profitable. Toyota has also been making losses

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on its locally produced cars. Two thousand people were laid off for in 2013
alone. The car manufacturers have also cut down production due to crisis and
lower demand for locally produced cars. Imports have become cheaper due to
the strong Australian dollar and it has resulted in the locally produced cars
becoming unattractive to the market at home and abroad as well.