The report in the Financial Review said that Mr Yasuda told the Treasurer he could convince Toyota's management in Tokyo to stay in Australia as long as the company could wind back its workplace benefits. Treasurer Joe Hockey Credit:Alex Ellinghausen "It was a private conversation, but it's an accurate report," Mr Hockey told Fairfax Radio. "I stood in Parliament and said it quite bluntly, that if the AMWU [Australian Manufacturing Workers' Union] continued down this path it would be very hard for Toyota to stay in Australia, and time's proven it to be correct". But Toyota's management has directly contradicted Mr Hockey's version of events, releasing a statement denying that it blamed the union for its decision to leave Australia.

“Toyota Australia has never blamed the union for its decision to close its manufacturing operations by the end of 2017, neither publicly or in private discussions with any stakeholders,” the company said in a statement. “As stated at the time of the announcement, there is no single reason that led to this decision. “The market and economic factors contributing to the decision include the unfavourable Australian dollar ... and low economies of scale for our vehicle production and local supplier base. “Together with one of the most open and fragmented automotive markets in the world and increased competitiveness due to current and future Free Trade Agreements, it is not viable to continue building cars in Australia.” In a more positive consequence of Toyota's decision, Australians could be saving between $1000 and $2000 on each imported cars before the next election, with Mr Hockey giving his strongest indication yet that he will abolish tariffs on luxury and imported cars.

Now Toyota is stopping building cars in Australia in 2017, heralding the end of car manufacturing in this country, Mr Hockey admitted there was no longer a local industry to protect with 5 per cent tariffs. “There's a legitimate case put forward to remove tariffs where there is no local motor vehicle manufacturing industry,” Mr Hockey told Fairfax Radio on Wednesday. “This is something that will certainly be considered by our review of taxation, which will occur in the next 18 months or so, and certainly before the next election,” he added. But the tariffs would be painful for the Abbott government to reject, with revenue of $920 million a year and rising to more than $1 billion over the forward estimates. Industry Minister Ian Macfarlane said he would focus on improving skills and training systems which are currently a “convoluted mess” and “close to broken”. But he denied that training centres such as TAFE or research organisations such as the CSIRO need more money. Simply offering more funding was the “Labor way”, Mr Macfarlane told ABC radio on Wednesday.

“What we're saying is there will be efficient use of the money that's there,” he added. “I can guarantee that the skills training that will be offered will be of a higher calibre and will present workers that are better work-ready than we've seen in the past.” Despite his concerns about mounting government debt, Mr Hockey dismissed the idea of reintroducing Labor's plan to save the budget $1.8 billion by tightening the rules on tax benefits for salary-sacrificed cars. The Abbott government reversed Labor's pre-election decision, missing out on the much-needed revenue. “My lord, if Labor had have gone ahead with their $1.8 billion hit on fringe benefits tax on motor vehicles, let me tell you [car makers] would've walked out the door in January rather than in 2017,” Mr Hockey said. The Australian Manufacturing Workers’ Union issued statement welcoming Toyota’s denial that workers conditions led the company to end manufacturing in Australia.

‘‘It's another blow to the government's credibility – after GM Holden and SPC Ardmona both refuted the government’s claim that workers’ pay and conditions were to blame for industry troubles,’’ the statement said. Opposition Leader Bill Shorten said that it was a tough enough time for Toyota workers and their families, and described Mr Hockey’s comments on workers’ conditions as ‘‘cruel and heartless’’. ‘‘This is the most difficult time for these workers – they don’t need Tony Abbott and Joe Hockey kicking them in the guts while they’re down," he said. ‘‘Aside from how heartless it is, it’s just wrong. ‘‘I want Toyota workers to know that the death of the car industry is not their fault, it’s Tony Abbott’s.’’

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