Treasurer takes tough public line despite Holden saying it needs certainty from the new government by Christmas

This article is more than 6 years old

This article is more than 6 years old

Joe Hockey has declared the Coalition will not be held to ransom by the car industry and says if Holden quits its Australian operations it will be Labor’s fault.

The treasurer adopted a tough public line on the day the government released its broad-ranging terms of reference for a Productivity Commission inquiry into the sector, which will report next March.

While that represents a fast-tracked inquiry, Holden has been saying publicly it needs certainty from the new government by Christmas.

But on Wednesday Hockey insisted the government would not be rushed. The treasurer told reporters in Melbourne while he did not want to see job losses: “We don’t negotiate with taxpayers’ money with a gun to our heads.

“We’ve got a responsibility to the entire Australian economy. We are not running down the street, chasing an individual car maker with a blank cheque. It’s got to be a partnership.

“If the car industry is in crisis, it’s Labor’s fault. This is not in our hands, there is a proper process in play – let’s work it through.”

That remark secured a quick retort from the shadow industry minister, Kim Carr. “The Abbott government is playing chicken with international car companies and risking the livelihoods of 200,000 Australians who depend on the automotive industry.”

Carr said the government was now in possession of the same information that had been provided to Labor by Holden about the state of its local manufacturing operations – and the same high-level advice from senior officials about appropriate actions.

He said Holden had briefed the Coalition as well as Labor last Christmas about its operations and the timeline required for future investment commitments. He contended delay in those circumstances represented “willful negligence”.

Hockey’s cabinet colleague, Ian Macfarlane, has been issuing public warnings since he took the industry portfolio after the lection of the knock-on consequences of another carmaker shutting down its Australian operations.

Macfarlane has said the repercussions of factory closures would be felt down the east coast of Australia. Ford has already announced its intention to quit local manufacturing.

Macfarlane appears to have been positioning himself ahead of future cabinet consideration to argue for a reversal of the Coalition’s pre-election policy, which was to reduce taxpayer funding for the carmakers by $500m. Macfarlane is now in Japan and will meet Toyota executives during his visit.

Carr told Sky News in regard to Holden: “The timelines are urgent and the government has failed to live up to its responsibilities.”

He said the Productivity Commission inquiry was a “ruse” to get the Coalition past the South Australian election. The timing of the final Productivity Commission report, he said, was two weeks after the state election.

The shadow industry minister said he was aware the board of General Motors had three weeks ago discussed the state of the Australian operation, and the mood had been “bleak”.

He said Holden had not, to his knowledge, taken a final decision to quit manufacturing in Australia, but the new government was making it difficult for the company to commit on an ongoing basis. Carr predicted if Holden pulled up stumps, Toyota would follow.