The boss of a major industry group will be arguing to keep the former Labor government's funding for the auto-making sector intact when he faces a Productivity Commission panel on Tuesday.
The coalition government has instructed the commission to review funding to the car industry, in particular $500 million which is due to be provided.
Australian Industry Group (Ai Group) chief executive Innes Willox believes funding under the New Car Plan should be allowed to run its course to 2020.
"Policy certainty is especially crucial in programs that are aimed at fostering long-term investment and innovation, and in industries that have very long lead times in their investment decision making cycles," Mr Willox said in the group's submission to the review.
"We believe the $500 million commitment should be honoured."
The review must look very closely at the macroeconomic environment when examining the suitability or timing of any changes to automotive assistance arrangements.
In the likely absence of increases in manufacturing employment and investment in the immediate outlook, further shocks to the domestic manufacturing sector could do more damage.
"In this fragile economic environment, government should be wary of inadvertently exacerbating the tough trading conditions faced by businesses across many of our key industrial sectors," he said.
The commission will release its preliminary report on December 20 followed by a position paper on January 31.
However, car maker GM Holden has said it will be making its future Australian plans before Christmas.
