Scrappage scheme defended

THE SOCIETY of the Irish Motor Industry (SIMI) has defended its proposed scrappage scheme for cars 10 years or older after criticism from Green Party Transport spokesman Ciarán Cuffe, who described it as neither economically sound nor environmentally friendly.

Announcing its pre-Budget submission yesterday, SIMI director general Alan Nolan said in both instances a new scrappage scheme made sense. It is proposing a €2,000 cut in the VRT paid on new cars with emissions of less than 156g/km when sold against a 10-year-old car.

"On the environmental front, the average 10-year-old car emits 180g/km, and even that is optimistic for car engines emit more as they get older. The average emissions for cars sold under our proposed scrappage scheme would be 130g/km."

In terms of the economic cost of such a scheme, he says that 10,000 jobs have already been lost in the motor industry since 2007 and a further 10,000 are under immediate threat next year.

"Based on an average motor industry salary of €40,000, it will cost the Government €148 million in lost PRSI/PAYE, while the social welfare burden will increase by €105 million.

"In contrast, our proposed scrappage scheme to support the sale of up to 20,000 lower emission cars could generate an extra €98.5 million in tax revenue.