The federal government's $200 million car industry assistance package will make a positive contribution to the local vehicle manufacturing sector, South Australian Premier Jay Weatherill says.
Mr Weatherill said the state government welcomed the initiative, regardless of whether or not it was seen as a direct response to the fringe benefits tax changes introduced by the commonwealth two weeks ago.
"Anything that improves the relative attractiveness of locally-made vehicles will lift vehicle sales and improve volumes which is great for the local manufacturers," the premier told reporters on Monday.
The latest investment package includes a commitment from the commonwealth to only buy Australian-made passenger cars and a pledge to encourage other state and local governments to take a similar stand.
However, details of how the federal funds will be spent are yet to be determined.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Mr Weatherill said he would have discussions with both Holden and Toyota and the vehicle component sector.
He said the state government had some ideas of its own but expected it to be a tax break or an offer of cash back on locally-produced cars.
"We're duty bound to work with that money and make sure it gives the biggest benefit," he said.
The assistance package also came as the latest car industry sales figures showed a 4.8 per cent increase in demand for locally-built cars last month.
The Federal Chamber of Automotive Industries said 10,223 Australian built cars were sold in July compared to 9,757 in the same month last year.
However, year-to-date demand for local cars was down by almost 21 per cent or 16,608 vehicles to 62,825.
