Taxpayers help Holden motor on

[Wretched]

TAXPAYERS contributed at least $100 million in pre-tax revenue to Holden's $112 million net profit for 2010, its first profit in six years, according to accounts the manufacturer declined to show The Age.

GM Holden's 2010 accounts - obtained through the Australian Securities and Investments Commission - show taxpayers subsidised the car maker to the tune of $99.6 million through the Automotive Competitiveness and Investment Scheme.

This was in addition to the 2010 portion of the $500 million Green Car Innovation Fund (now cancelled) awarded to Holden - $149 million in total over three years, spread over various capital and engineering project ledgers.
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The South Australian taxpayer lent the company $3 million.

The 2010 accounts also show the car maker is in dispute with the Australian Taxation Office over $176 million in disallowed deductions and revised assessments.

All of which is a less rosy picture than Holden pitched on the release of its financial results two weeks ago. Holden yesterday defended its position.

''We've been pretty circumspect in the way we've been speaking about our results,'' Holden's director of external communications Emily Perry said. ''We've said there are still a lot of challenges for us and our industry. We were assisted with government funding, and last financial year by foreign exchange gain, so I think we've been quite clear about that,'' she said.

The taxpayer subsidies helped bolster Holden's pre-tax profit to $136.8 million ($112.4 million after tax). Had the company not received the ACIS grants and made foreign exchange gains, it would have finished in the red. Taking away the grants, foreign exchange gains and sundry revenue ($158.7 million combined) flips Holden's $136.8 million pre-tax profit into a $21.9 million pre-tax loss.

Subtracting the federal taxpayers' grant alone shrinks Holden's pre-tax profit to $37.2 million.

''There isn't a car industry anywhere in the world that doesn't rely on some degree of private-public partnership,'' Ms Perry said.

''The funding we received as part of the Green Car Innovation Fund was critically important to justifying the investment we had to make to bring the Cruze to Australia.

''If you took that money out … [we would] not have been making the large investments we have made over the last couple of years,'' she said.

But what one arm of government gives, another is trying to claw back.

The Tax Office has disallowed $176 million in deductions over the period 2005 to 2008 for royalties GM Holden paid to a US-based GM company, GM Global Technologies Operations Corporation.

The Tax Office has issued amended assessments for these years based on the disallowances, which GM Holden disputes and has lodged formal objections to on the basis that the tax office's treatment amounts to double taxation - here and in the US.

''This part of the ATO's normal review process for a business our size. We're being audited as part of that, which is under way, and we can't say more than that,'' Ms Perry said.

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