The Coalition has rejected Holden’s request for more assistance after the car maker said over the weekend that it would stop manufacturing in Australia without more support.
Over the weekend, Holden’s head of government relations Matt Hobbs suggested that any reduction in subsidies would cause Holden to leave Australia. When asked if this was true, CEO Mike Devereux said “absolutely”.
Devereux told News Limited that the company faced a unique and difficult set of circumstances, and assistance needed to continue, with the assistance justified by the flow-on benefits.
"To mortgage your future as a country of making things, because of a particular point in time right now, to assume that this set of conditions will be true in 10 to 15 years from now, I think is illogical," he said, dismissing a Productivity Commission report showing automotive manufacturing received more taxpayer help than sectors such as agriculture.
"Plus, the multiplier effect in the economy is greater than it is in other sectors. You buy more when you give [the car industry] $100 million."
The Coalition has said it remains committed to reducing support by $500 million up to 2015, blasting the government’s approach to industry and saying that car manufacturers had to justify both their government support and long-term viability. The Coalition has committed to a review of the industry by the Productivity Commission before pledging further funds.
"We have to end this embarrassing cap-in-hand approach to government and secret deals behind closed doors," shadow industry minister Sophie Mirabella told the Adelaide Advertiser.
Industry minister Greg Combet has said that the Coalition would “kill” the car industry.
Dave Smith from the AMWU said the federal opposition, which is currently in a position to win the September 14 election, needed to be more clear about their approach to the automotive industry was.
"The Coalition have to come clean on exactly what their policy is,” Smith told News Limited.
“If you don't have tariffs, you have to have co-contribution. It's no good sneaking into an election then springing it on Adelaide that their whole community will be impacted in such a way."