Australia's hand out addicted car industry needs some tough love

The Federal Government will contribute millions of dollars to Australian car manufacturers Holden and Ford in an effort to keep Australia's automotive sector afloat. The government will add $34 million to a $103 million rescue package for Ford's Victorian assembly plant that will see the facility remain open until at least 2016. The funding, which will be met by a grant from the Victorian Government, comes as Holden is reportedly negotiating with Canberra over co-investment to produce a new Commodore model in 2018. But should governments continue to bail out an industry that is lagging in Australia and internationally? University of Wollongong Professor of Infrastructure Economics Henry Ergas explains the problems of extending further assistance to the ailing sector.