It’s an issue which has been rumbling away inconclusively in the background since its days of opposition – does the Coalition intend to support what remains of Australia’s car industry, or not?

What to do about the carmakers looms as more than a simple sum of the constituent parts. This is a genuinely definitional decision for Tony Abbott, prime minister. The path he takes will give us important information about his instincts and priorities in the job.

The cabinet is divided. The first point to make is the recent public division is a healthy development in Australian politics, a welcome burst of oxygen. It’s about time we saw senior figures slugging it out in a genuine battle of ideas rather than mouthing lines like automatons, or briefing anonymously against their colleagues.

This an important and consequential debate for the country to have. Best we have it, and have it in a way in which the public can understand the parameters, costs and opportunities, and the competing points of view.

Industry minister Ian Macfarlane is in the corner of the carmakers, a position he occupied with enthusiasm in the previous Howard government. Macfarlane has evidently made a calculation from the outset that his strongest chance of making the case for the industry rested in – wait for it – actually making the case, in public, transparently.

Macfarlane is a straight shooter and a clear communicator. He distilled the still unresolved deliberation to its very essence this week, telling the Australian Financial Review from Japan: “Either you do or you don’t. If you don’t subsidise the [car] industry, it won’t be there. I accept that argument, I’m not sure that my colleagues do yet.”

The treasurer and the finance minister are making the alternative case, also publicly.

Joe Hockey this week sounded like a man who really could not care less whether Australia assembled cars here or not. Enough of the extortion was his line, essentially – this was going to be a process on the government’s terms, on the government’s timetable: no “guns to the head”.

So, translating the Hockey message to Holden, which reportedly wants an answer about its future before Christmas? I strongly suspect you are bluffing, so don’t rush me, and by the way, don’t let the door hit your bum on the way out.

Assuming events don’t overtake the government, assuming there’s a decision still left to make, the person whose view will ultimately matter most in this transaction is, of course, the prime minister’s.

Thus far, Abbott has positioned himself as a benevolent father figure, indulging the debate of his colleagues, making encouraging noises, but declining to reveal his hand.

So let’s think through what this decision means for Abbott. First the politics. Letting Holden walk is a significant call, not least because Toyota will likely follow suit. There will be significant job losses, not only in the car plants, but right through the supply chain. You can of course blame your predecessors, but that’s not very convincing, given Labor was too evidently inclined to give the carmakers the cash before political events intervened. There is also an election in South Australia to consider.

If Abbott ultimately endorses the don’t-throw-good-money-after-bad view of the world, it will be a decision – possibly his first – which generates clear losers. Modern politicians have developed a serious aversion to making unpopular calls – much of the conversation with voters consists of pretending everyone can have it all at no cost to them. Saying something different would be a break from tradition.

But then we get to Abbott the person.

Some of the prime minister’s colleagues have long been suspicious of Abbott’s economic philosophy; in Liberal party terms, he’s a left winger on economics, an interventionist, a shaper. There’s been periodic internal criticism of Abbott’s remnant Democratic Labor party instincts, his lack of reflexive worship of the free market doctrine, which is most evident in two specific examples: his preference for an interventionist industry policy to reduce carbon emissions rather than the more orthodox economics of a market mechanism to do the same job more efficiently; and his longstanding reluctance to get involved in serious labour market deregulation, once a shibboleth of Australian Liberal party politics.

Car industry assistance is a serious no-no for pure economic rationalists. Assistance stings consumers, who of course pay for it through their taxes, and it coddles the manufacturers from responding to competitive pressures. Structural adjustment is evident all across the Australian economy, particularly in manufacturing, which is struggling with the effects of the sustained rise in the value of the Australian dollar. So why, exactly, are cars a special case?

Hence the definitional nature of the decision.

Which Tony makes this decision? The interventionist? The chairman of the cabinet board (take two arguments, create a mid-point and synthesise)? The prime minister who prioritises human implications, and therefore political implications, above abstract economic seminars? The prime minister who waited too long and then had to respond to events, rather than shape the debate?

It’s not clear yet, but however this ball ultimately bounces, it will tell us something.