Swapping One Clunker for Another

The Labor Party announced their policy of swapping one clapped out clunker for a newer model. No, I am not referring to their leadership change, although it is an appropriate description, but their ‘cash for clunkers’ car policy.

This is the program where cars over 15 years old will qualify for a $2000 rebate when they are exchanged for one of the ‘new models’ on Labor’s list of approved vehicles.

Included in this list is the Australian-made hybrid Camry which, based on sales to date, has already been subsidised by the government to the tune of $10,000 per vehicle!

In fact, the hybrid Camry is one of only a couple of Australian-made models (the other being the regular four cylinder Camry) that are available through the cash for clunkers scheme. The rest are overseas imports.

Aside from that nasty little detail, which will see foreign vehicle manufacturers profit from Labor largesse, what’s not to love about another cash handout from the fiscally incompetent Labor administration? Well, actually there’s plenty.

Even Socialist left faction boss and Industry Minister Kim Carr denounced the clunkers program as ‘extremely expensive’ and estimated it would cost the government over $1 billion.

Of course his statement was made before his government announced the ‘cash for clunkers’ policy last week – so you could expect he was at least telling the truth! Strangely, he has been silent on this policy since it was announced.

Similar schemes overseas seem to confirm Senator Carr’s views. Germany abandoned its own scheme after cost blowouts and the realisation that in many instances, it simply brought forward the purchasing decision, leaving a sales ‘black hole’ when the program finished. At least the Germans were buying local vehicles, giving their domestic industry some benefit.

There was a similar experience in the United States where it was also noted that the minimum price clunker deal hurt auto repair shops and made vehicles unaffordable for those lowest on the socio-economic scale.

In both the USA and Germany, the clunkers program was initiated as part of an economic stimulus package, whereas Ms Gillard claims her policy is an environmental measure. I suspect it is simply another ill-considered reactionary diversion from her inertia and policy paralysis in regard to climate change.

Another consideration is the potential for the clunker program to lure those who can least afford it to borrow money for a new car. Raising personal debt levels in a time of rising interest rates and economic uncertainty wouldn’t appear to be the most responsible course of action. That said, when has a sense of responsibility ever featured in a Gillard Government program?

Like many of the Rudd/Gillard Government programs, the hangover from their spending binge will be felt for much longer than the party lasted. The empty promises, ill-considered policies and outright falsehoods demonstrate that no matter who is leading it, this Labor Government is the most incompetent in recent history.

It is clear that in changing leaders, Labor have simply swapped one ‘clunker’ for another.

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