Holden closure: Tony Abbott announces $100m plan to help 'liberated' workers find jobs

Updated

Prime Minister Tony Abbott says many Holden workers will be "liberated" by the loss of their jobs at the carmaker.

Mr Abbott has announced plans for a $100 million fund to help create jobs in the states affected by the closure of Holden in Australia.

The Labor Government in South Australia has already slammed the package as "manifestly inadequate" and "insulting", and Opposition Leader Bill Shorten has accused the PM of treating workers with "absolute contempt".

Holden announced last week that it would stop making cars in Australia by 2017 due to a "perfect storm" of poor economic conditions.

Its decision will put 2,900 people out of work - 1,600 from the manufacturing plant in South Australia and 1,300 in Victoria.

Mr Abbott has conceded that some workers will have difficulty finding new jobs.

"Some of them will find it difficult, but many of them will probably be liberated to pursue new opportunities and to get on with their lives," he said.

"We have to accept that what was right for people 10 years ago or 20 years ago is not necessarily going to be right or possible for them far into the future, and we do have to be prepared to adapt - individually and collectively."

More than half of money will come from Commonwealth, Holden to be asked for $20m

Of today's package, $60 million will come from federal coffers, with an additional $12 million from Victoria.

'Too hard to grasp'

Dennis Oldham lost his job with Mitsubishi in 2008 after 15 years with the company.

Dennis Oldham lost his job with Mitsubishi in 2008 after 15 years with the company. He says he knows what Holden workers are going through

Mr Abbott says the Government is "talking to South Australia for a commitment in the same order as Victoria's and we'd hope to get $20 million perhaps from Holden".

But he has emphasised the the Government will not prop up unprofitable businesses.

"We don't want to see corporate welfare, what we want to see is a country which has got the economic fundamentals right," he said.

"Government's job is to foster the muscles and the sinews and bones of our economy, if you like, so that the private sector can add the bulk.

"This Government will be very loath to consider requests for subsidies.

"We will be very loath to do for businesses in trouble the sorts of things that they ought to be doing for themselves."

SA Premier brands plan 'pathetic', 'insulting', and lacking in empathy

South Australia's Labor Premier Jay Weatherill has been scathing in his criticism of the Prime Minister's announcement, labelling it "insulting".

"The Federal Government's response to the closure of Holden is pathetic," he said.

"It demonstrates that the Federal Government does not understand the enormity of the issue, the urgency of the issue and worst of all they expressed little or no empathy for Holden's workers and their families."

He said South Australia would be contributing far more than asked - close to $50 million - to help workers and manufacturing in the state, but would not commit to putting it into the federal fund.

"We have $50 million of our own that we'll be contributing to this exercise," he said.

"But the idea of the paltry sum that's been put on the table by the Commonwealth going anywhere near the needs of South Australia and those workers and their family is frankly insulting."

Mr Weatherill said the Commonwealth should quarantine money previously earmarked to support Holden from the Automotive Transformation Scheme - worth $1 billion between 2016 and 2020 - and another $215 million that had been allocated for co-investment with the company.

Victoria's Liberal Premier Denis Napthine says the package is "a good first step" but he is expecting more money from the Commonwealth as a result of the review into his state's economy.

"I would fully expect as Premier of Victoria that as those reviews are undertaken and report that they are accompanied by significant investment from the Federal Government in creating those new job opportunities," he said.

A Holden spokesman said the company welcomed the announcement and would "be in discussions with all governments ... over our involvement in this package and our contribution to it."

Fund to support manufacturers, research

The Government says the fund will kick in next financial year and will provide support for car parts manufacturers to find new customers, for research that leads to new products or processes in the sector, and for existing manufacturers that expand in SA or Victoria.

The Prime Minister has also announced reviews of the SA and Victorian economies and says he will chair a federal government taskforce to develop ways to build industry in Australia, to make recommendations to Cabinet by June.

"As well as the obvious things - getting the fundamentals right - we'll be looking at new options to reduce the costs of energy, new options to encourage innovation," he said.

The Government had baulked at giving the carmaker any extra taxpayer's money to bolster its local operations.

But Holden's closure has cast doubt on the entire automotive industry in Australia, with concerns it may force Toyota and the broader car parts sector to follow suit.

That would put up to 40,000 people out of work.

Mr Abbott has previously indicated he wants to help Holden workers transition into new jobs by focusing on the existing strengths of the affected communities.

The Government said today that Holden had indicated it would "set aside at least $100 million for costs relating to the wind-down" of its business.

"Holden workers will also be eligible for employment support with a Job Services Australia provider," the Prime Minister's statement said.

Shorten accuses Abbott of treating workers and industry 'with contempt'

Opposition Leader Mr Shorten accused the PM of "continuing to treat workers and businesses in the automotive sector with absolute contempt."

"Today’s announcement from Prime Minister Abbott is woefully inadequate," he said in a statement.

"Holden is leaving Australia after 65 years and the responsibility for this sits squarely with Tony Abbott and his government.

"The Abbott government is ripping $500 million out of auto-assistance but returning just $60 million – only 12 per cent – in assistance for thousands of workers who will lose their jobs.

"Before the election, Tony Abbott promised to keep Australia’s car industry strong. His failure to do so will be a damning legacy for his government."

Holden first began making cars in Australia in 1948.

Topics: automotive, industry, business-economics-and-finance, federal-government, melbourne-3000, adelaide-5000, vic, sa

First posted