Wisely, former Victorian Premier Steve Bracks has advised the Rudd Government to ignore self-serving pleas from the car industry, trade unions and state governments for continued tariff protection. If adopted, the report’s recommendations would see the tariff cuts foreshadowed by the Howard government proceed, with a reduction from 10 per cent to 5 per cent in 2010.

Industry Minister Kim Carr previously encouraged the idea that he would freeze or slow down the scheduled 2010 cut in tariffs on imported motor vehicles. That was a feint to enrage the policy neo-liberals and allow Bracks’ review to slip through a multi-billion-dollar expansion of direct subsidies to the car companies.

The Bracks report suggests a decisive shift in Australia’s industry policy debate. Supporters of the automotive industry must embrace innovation and the environment, not tariffs, to win the taxpayer support that has always been its lifeblood. The new tactic is embodied in the Bracks report.

The car industry has benefited from a long series of generous “adjustment schemes” since tariff barriers began to be dismantled in the mid-1980s, but Mr Bracks insisted this should be the last time it put its hand out for “transitional assistance”.

Although the report recommends that the tariff cuts proceed as planned, the former Victorian premier has also suggested that the Rudd Government help the struggling car industry by setting up a $2.5 billion car industry grants program called the Global Automotive Transition Scheme.

As the Rudd Government prepares to release special reviews into car and textile industry assistance, the Productivity Commissioner has criticised plans to delay tariff reductions and increase government subsidies to manufacturers.

Since the late 1960s, the big assaults on protectionism have come from Labor. So it’s a surprise to find that the Rudd Government’s Industry Minister is itching to stall or even stop the removal of the last vestiges of import protection.