The opposition leader says the best thing he can do for car makers is not to go ahead with company car FBT changes

Tony Abbott has declined to endorse the extra cash for car manufacturer Holden, expected from Labor over the next couple of days, urging the Rudd government instead to drop its proposed crackdown on fringe benefits tax concessions.

Cabinet is meeting in Canberra on Monday to continue work on an economic statement due later this week. The meeting is also understood to be considering extra financial support for car maker Holden following negotiations over the past couple of weeks between the company and the industry minister, Kim Carr.

Kevin Rudd flagged late last week that Labor would intervene to help Holden. The company has been lobbying the federal and state governments for assistance to shore-up its Australian manufacturing operation as it moves to cut its operating costs.

Abbott was asked during a campaign visit in Sydney on Monday morning whether he’d support a new support package for Holden. The opposition leader replied that the best thing Labor could do to help the car industry would be to dump its controversial $1.8bn crackdown on FBT benefits. The proposed change affects car leasing.

“The best thing we could do for the car industry today is announce there will be no go-ahead with the fringe benefits tax changes which have stopped the industry dead in its tracks,” Abbott told reporters in Sydney.

“You’ve got to ask yourself what Kevin Rudd has done in the month since he’s been prime minister. The boats are still coming in record numbers, the faceless men are in charge of the Labor party as much today as ever, the carbon tax is still driving up your power bills, the only thing Mr Rudd has actually done, as opposed to talking about, since becoming prime minister is he has stopped the car industry dead in its tracks, thousands of sales cancelled, jobs gone, hundreds of millions in destroyed wealth because of a decision that hadn’t been thought through, hadn’t been consulted over, and will end up slugging ordinary workers $1,400 a year,” he said.

The reporter persisted, asking Abbott whether he would support the looming bailout for Holden. The opposition leader repeated his previous argument. “I support not going ahead with the $1.8bn fringe benefits slug on the car industry.”

At a separate campaign event in Sydney the shadow treasurer, Joe Hockey, was also non-committal on additional support for Holden. Hockey suggested the Coalition “shouldn’t have to spend any more money” because it would not “do the damage Labor is doing to the car industry” through the proposed FBT change.

The Coalition is thus far promising less in automotive industry assistance than Labor for the 2013 election. The government has zeroed in repeatedly on a plan by the Coalition to reduce automotive assistance by $500m.

Hockey told reporters, “We are not going to add further money to the car industry” because handouts to industries were not infinite. “No industry can rely forever on government handouts to survive. You need to have a strong economy.”

Hockey repeated that the Coalition would not damage the car industry the way Labor had with the FBT announcement, a change he likened to a “baseball bat to the back of the head”. Cash for Holden “was not a solution” to the problems the government had created. He said car makers under the previous Howard government had enjoyed good conditions.

Labor unveiled the contentious FBT change earlier this month as part of savings measures to fund a move to a floating carbon price one year earlier than legislated. The measure has sparked a strong backlash from car dealers, automotive groups and salary packaging companies.

The change imposed by Labor requires people claiming future FBT concessions to keep records to prove they are using their vehicles for business purposes, not private use.