Mr Abbott on Wednesday announced a $100 million fund to help automotive workers in South Australia and Victoria to find new jobs, in the wake of Holden's decision to stop manufacturing cars in Australia in 2017. Prime Minister Tony Abbott with Industry minister Ian Macfarlane during a press conference in Canberra on Wednesday. Credit:Andrew Meares Of the $100 million, the federal government will contribute $60 million and the Victorian government will give $12 million. Mr Abbott said the federal government expected that the rest would come from the South Australian government, and that Holden would contribute. Mr Weatherill said his government was prepared to contribute at least $50 million to help workers however it was waiting for further details from the Abbott government before committing to the Commonwealth's fund. He dismissed the government's proposal as ''not a plan'' but an ''excuse to get through this week''.

''It just demonstrates the lack of regard they have ... for these automotive workers. He does not understand the enormity of what is in front of Australia,'' Mr Weatherill said. Holden's announcement last week immediately prompted calls for the federal government to support the thousands of Holden workers affected and address the anticipated flow on to the wider economy. On Wednesday, Mr Abbott said that he understood the Holden decision would affect the Victorian and South Australian economies, the two states where Holden employs the majority of its workers. Mr Abbott said the $100 million fund would be used to "invest in potential employment generating projects in South Australia and in Victoria".

The Prime Minister, who refused to give more money to Holden when the carmaker was deliberating on whether to leave Australia, said he still held the view that industry assistance was not the right approach. "No government has ever subsidised its way to prosperity," Mr Abbott said in a press conference held at Parliament House. Australia had a bright future in manufacturing notwithstanding the current troubles faced by the car industry, Mr Abbott said. The Prime Minister pointed to the boots he was wearing, saying they were made in South Australia. Holden employs about 1900 workers in Victoria and 1760 in South Australia, according to the company's report to the Productivity Commission. Many in the car industry and unions fear that Toyota could follow Holden out of Australia – a decision that would threaten a further 4200 jobs. Victorian and South Australian Premiers, Denis Napthine and Mr Weatherill, had told Mr Abbott that their states would need significant help from the federal government to cover the lost jobs.

The Prime Minister had promised that he would do what he could to help affected workers "transition" to new jobs. Former Labor industry minister Greg Combet, who was appointed by the South Australian government to be its automotive transformation co-ordinator, said he would try to save as many jobs as possible. He was confident South Australia had moved away from its reliance on the automotive industry in recent years, but stressed the government would have to help those workers out of a job. 'A good first step' Dr Napthine welcomed the Commonwealth's offer of $100 million worth of automotive industry assistance as a ''positive first step'' but said the state will need more federal help.

''This is a good first step. But I emphasize this is a first step,'' Dr Napthine said on Wednesday. Victorian Opposition Leader Daniel Andrews was quick to criticise Victoria's $12 million commitment to the fund. "Victoria's car industry and manufacturing sector is worth more than a mere $12 million from Denis Napthine,'' he said. ''Victoria needs a jobs plan not for the latest crisis but for a stronger future.'' Holden, which over the last 12 years has received an average of $153 million in public subsidies each year, did not reveal how much it would put towards the package to support workers. ''We welcome this announcement today from the Commonwealth and state governments,'' Holden's corporate affairs director George Svigos said.

''We will be in discussions with all governments in coming months over our involvement in this package and our contribution to it.'' More than 50,000 Australians are employed in the automotive industry. As many as 250,000 further jobs depend on the automotive industry. In 2012, the Gillard government gave Ford $34 million to continue its Australian production until 2016. In May this year, Ford confirmed its Australian manufacturing would cease in October 2016 with the closure of its Broadmeadows and Geelong operations would close. The Gillard government and the Victorian government pledged a further $12 million in extra assistance for supply chain workers and another $39 million for a community assistance fund to deal with job losses. Holden received about $1.8 billion of government assistance from 2001 to 2012. Most of the Coalition cabinet doubt whether the taxpayer assistance has been worth it.

The Prime Minister said he would chair a taskforce to shape Australia's future in manufacturing - helping the country shift from “heavy industrial manufacturing to higher value-added production”. Mr Abbott said his ''wide-ranging'' initiative to fix manufacturing would include reviews of the South Australian and Victorian economies and development of a National Industry Investment and Competitiveness Agenda ''which will focus on our strengths, create jobs and exploit our competitive advantages''. Two reviews of the South Australian and Victorian economies ''will commence immediately'' and report to the federal government in February. Both reviews will be chaired by Industry Minister Ian Macfarlane. They will include MPs and industry leaders in the South Australian and Victorian business communities. The $100 million fund would be spent ''on economically responsible projects . . . in accordance with the advice of those business committees”. The fund will ''support business and research and development opportunities and will complement the direct support available to Holden workers as part of existing Commonwealth and Holden support schemes''.

Coalition response 'cruel' Federal Opposition Leader Bill Shorten said the assistance package was ''too little too late''. ''The Abbott government will pay taxpayer money to shut jobs, but they couldn't find any innovative policies to keep jobs,'' he said. ''Holden did not have to close. There was no case for abandoning the car industry.'' And he questioned why the Abbott government was providing ''hundreds of millions of dollars in tax rebates for the mining industry'', but was letting car makers leave Australia.



Glenn Thompson, assistant national secretary of the Australian Manufacturing Workers' Union, described the assistance package as "cruel", accusing the Abbott government of chasing the car industry out of Australia. "According to conservative estimates, this will tear $21 billion out of the nation's economy," he said in a statement. "The decision could lead to 50,000 workers losing their jobs. "And yet the government puts $60 million up - without consulting the industry, critical stakeholders, workers, state governments or relevant experts. "This does nothing to support the broader manufacturing sector, which is crucial if auto workers are to find good jobs after their businesses close."

The Australian Industry Group, which represents many manufacturers, welcomed the package unveiled by Mr Abbott, saying it was forward-looking. It was crucial, Ai Group's Innes Willox said, that the package helped ''forge closer and more effective two-way links between Australia's research and business communities''. Loading He said his group had long argued that federal government industry policy needed to focus on building new industries and capabilities. Mr Willox said he welcomed the initiative because it would help focus on developing Australia's existing manufacturing strengths ''and [Australia's] areas of competitive advantage''. with AAP, Lisa Visentin, Richard Willingham

