When it comes to bailouts, Denis Napthine and Tony Abbott are caught in the war between economic rationalism and political pragmatism, writes Barrie Cassidy.

On the face of it, the Victorian Government's decision to bail out SPC Ardmona with a $22 million grant surely leaves the electorate confused about what fundamental beliefs underpin the Liberal Party.

How can the Liberal Party, at the federal level, insist that taxpayers' money should not be used to prop up unsustainable industries, while the same party at the state level makes a virtue of the practice?

Same party. Same company. Two very different philosophies. One undermining the other.

The difference in approach comes down to a clash between economic rationalism and political pragmatism. And how close you are to the problem.

The Abbott Government is now on a crusade to tackle the structural deficit. An important part of that strategy is to put an end to welfare dependency across the board, and business welfare is a part of that.

As difficult as it is for the Federal Government to reject the demands of struggling companies and accept the job losses that go with that, it is far more difficult for state governments at the coalface.

SPC Ardmona is a classic case in point.

The decision has shaken the Goulburn Valley and disturbed many Victorians. The same goes for Toyota's decision to leave Australia. Just substitute Shepparton for Melbourne's west.

But the further you go from Victoria, the more likely it is that the Abbott Government's position is better understood and accepted.

Opinion polls demonstrate that just a third of Australians embrace the basic principles behind industry subsidies. That implies that outside the manufacturing states of Victoria and South Australia, support is probably less than 25 per cent.

Listen to George Christensen, the LNP member for the Queensland seat of Dawson. He told the ABC that people point at the car industry and say, "You guys have mooched off the taxpayer with corporate welfare for so long but when the going got tough you cut and run and you've left so many workers in the lurch."

As Christensen sees it, the car companies have a lot to answer for.

"Anything that's been handed to them over the last three to five years probably should come back to the taxpayer," he said.

"They won't because there's no obligation. I don't think they give a stuff about Australia. That's why they're leaving."

Now, Christensen has rarely come to national attention, apart from when he dressed up as Doctor Who and carted around a blown up Dalek to back his campaign for the BBC to film a program in Australia.

But his sentiments on industry subsidies - outside of Victoria and South Australia - will hit a nerve. Just as Treasurer Joe Hockey did with a new folksy approach to an old argument.

Hockey told a Canberra news conference that SPC Ardmona wanted $25 million from the Government to buy new equipment. Just imagine, he said, if "Abdul the kebab maker in Parramatta Mall" asked for a new oven because he wasn't making a quid?

The Victorian Liberals on the other hand cannot hide behind the different values in the non-manufacturing states. And they face an election in November.

So the Napthine Government has pledged $22 million "to transform and modernise" SPC Ardmona's operations. In return, according to the Premier, the company has pledged "to grow new markets and produce new products that better suit the modern lifestyle".

The Federal Government has lost some skin - and will probably lose even more in the short term - for trying to lay the blame for the some of the collapsing industries at the feet of the unions. The message has been exaggerated at best and not surprisingly, workers, as opposed to unions, have taken the criticisms of their pay and conditions personally.

But the Coalition now accepts that scare campaigns built around WorkChoices have made industrial reform almost impossible for governments.

Changes will have to take place from within.

To that end, the strategy is to place pressure on business everywhere to lead the way. The message is a simple one. Whether you're Qantas or Holden, don't come to us looking for help unless you are prepared to help yourselves. Do some of your own heavy lifting to reduce your overall costs.

That help won't run to subsidies any longer, but it can mean less regulation, tax breaks and an end to red and green tape.

We are about to see an example of that thinking as applied to Qantas. That company will demonstrate its industrial credentials and promise to do more. In return, the Government will try and free up some of the legislative restrictions holding it back.

And as part of the same strategy, the Government is trying to go over the heads of unions and persuade workers that at a time of growing anxiety about job security, they can do more to help themselves; essentially by eschewing some of the conditions that unions have imposed on employers.

It's a sophisticated if transparent strategy, and it can only work if the Government has the nerve to see it through longer term. And if it brings more consistency to the table.

The biggest fear for the Government must surely be that Bill Shorten and the Labor Opposition will be just as ruthless and just as shameless in prosecuting the case against the government on job losses as Tony Abbott was in prosecuting the case against Labor on the carbon tax.

At a time when all politicians were being marked down, Abbott appealed to the electorate to throw out the other lot; vote for anybody but that incompetent, big spending, high taxing rabble that runs the country.

Now Shorten is saying, vote for anybody but that cold-hearted, job-destroying mob on the other side.

Abbott introduced the disease. Now he'll need to find the antidote.

Barrie Cassidy is the presenter of ABC programs Insiders. View his full profile here.