MARK KENNY

September 04, 2008 12:01am

THOUSANDS of South Australians in the automotive manufacturing sector will be saved from extinction after the Rudd Government said it would ensure the industry's survival by making it greener.

The commitment comes as the Government edged closer yesterday to a deal with the Greens and independents in the Senate, to get its new luxury car tax increase through, subject to changes to promote more fuel efficient cars.

With a Government response to the Steve Bracks' review likely next week, Industry and Innovation Minister Kim Carr yesterday appeared to indicate its major recommendations would be adopted.

"The Government . . .  has highlighted its commitment to actually see a sustainable automotive industry in this country, a much greener automotive industry in this country and an industry which is able to much more rapidly adapt to the changing market conditions . . . ," he told the National Press Club.

Former Victorian premier Steve Bracks recommended a doubling of Labor's promised $500 million green car innovation fund, and to replace the Automotive Competitiveness and Investment Scheme with a new Global Automotive Transition Scheme providing $350 million in annual subsidies to the industry over a 10 year period to 2020.

The industry is under severe strain following a series of layoffs in recent months. Unconfirmed reports suggest the most recent casualties are contract engineers previously engaged by Holden in Adelaide.

The industry is bracing for another blow if the Greens and independents succeed in securing changes to the Rudd Government's luxury car tax. The changes sought would have the effect of exempting fuel efficient luxury cars, delivering a competitive price advantage to a range of imported cars at the expense of the local industry.