Treasurer Joe Hockey calls for Holden to 'come clean' over future in Australia

Updated

Treasurer Joe Hockey has told Holden to "come clean" over whether it is planning to close down in Australia after its general manager told a federal inquiry that no decision had yet been made.

Holden boss Mike Devereux told a Productivity Commission hearing in Melbourne this morning the company had not decided whether to stay or go and would not speculate about whether there was a timetable for making such a decision.

The Federal Government has criticised the statement saying it "just adds to the uncertainty".

Acting Prime Minister Warren Truss says he has written to Mr Devereux asking for an immediate clarification about the company's plans for its Australian operations.

Mr Hockey has told Parliament the Government wants Holden to reveal its intentions.

We want them to be honest about it, we want them to be fair dinkum ... either you're here or you're not. Treasurer Joe Hockey

"We want them to be honest about it, we want them to be fair dinkum," he said.

"Because if I was running a business and I was committed to that business in Australia, I wouldn't be saying that I haven't made any decision about its future.

"Either you're here or you're not."

Questions about the company's future were again raised last week after senior Government ministers told the ABC that they believe the company will shut its local operations as early as 2016.

On Friday, Prime Minister Tony Abbott declared there would be no more taxpayer assistance for Holden and called on it to reveal its plans.

Mr Truss says he is concerned about the situation.

"The comments made this morning by Mr Devereux, the general manager, that no decision has been made at this point just adds to the uncertainty," he told Parliament.

"What we need is, and what this Government has said, is a clear commitment that we want General Motors to be active in Australia.

"The statements today include no clear commitment to stay manufacturing in this country and yet it was only two years ago when Holden had said it had achieved sustainable profitability in Australia.

"And now it has not ruled our abandoning manufacturing in this country."

He says General Motors Holden should make an immediate statement "clarifying their intentions".

"They owe this to the workers at General Motors," he said.

"Let us not go into a Christmas period without them making a clear commitment to manufacturing in this country."

But Industry Minister Ian Macfarlane has responded to Labor questions about the issue by emphasising that the Government's final response on the issue is not due until the Productivity Commission hands down its findings in March.

"What we're seeing here from the Labor Party is an attempt at a self-fulfilling prophecy," he said.

"Mike Devereux has not said Holden is leaving Australia.

"We have a process and we are going to stick to it."

Holden boss fronts Productivity Commission

Holden currently employs 3,500 people in plants in Victoria and Adelaide and its operations support the employment of workers in various components companies.

Mr Devereux told the Productivity Commission that the cost of losing the car manufacturing industry would dwarf the cost of keeping it, and warned of the disastrous effect Holden's withdrawal would have on the economy.

The economic benefit of us making things is $33 billion to the Australian economy. That's 18 times the assistance we receive. Holden general manager Mike Devereux

"The economic benefit of us making things is $33 billion to the Australian economy," he said.

"That's 18 times the assistance we receive."

Mr Devereux said every job in the automotive industry created two to three others in the wider economy.

He told the commission, whose report is due out early next year, that it costs the company $3,750 per car, or around $300 million extra per year, to manufacture cars in Australia.

However, he said Holden does not expect the Federal Government to "close that gap".

Cost of car industry subsidies to taxpayers Subsidy figure

(per year)

Cost to taxpayers

(assuming 12 million taxpayers) Currently: $500 million in subsidies* $42 per taxpayer An extra $150 million ($650 million) $54 per taxpayer An extra $300 million ($800 million) $67 per taxpayer

*Source: *Source: Subsidy estimate from Allen Consulting 2013 report

It has been reported Holden would need continuing support of $150 million per year to stay in Australia; however, Mr Devereux said the figure was confidential.

But he did say Holden needs a "public-private partnership over the long term to be competitive".

"I wouldn't speculate on what contribution will be needed ... because I can't tell you what future currency rates will be or what free trade agreements we will sign," he said.

"We've been fighting the fight, but I can't tell what the future will look like.

"We've made a business case to the Government. I think the Government has all the information you need on that."

Mr Devereux told the inquiry that "[General Motors'] philosophy is to build where we sell".

South Australian Premier Jay Weatherill believes Mr Devereux has made the car maker's intentions clear.

"Mr Devereux, managing director of Holden in Australia, has given the clearest possible indication that Holden is not going to close and they want to continue making cars here in Australia," he said.

"What we need now is the Federal Government to put the money back on the table they took off and continue their funding at the present level of funding."

Topics: automotive, industry, business-economics-and-finance, federal-government, government-and-politics, elizabeth-5112, adelaide-5000, sa, vic, port-melbourne-3207, australia

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