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Holden assistance package ‘woefully inadequate’

31-08-2010
by 
in 

The $100 million assistance package unveiled yesterday to help create jobs in the wake of the closure of Holden in Australia has been labeled “woefully inadequate.”

Labor Opposition Leader Bill Shorten and South Australian Premier Jay Weatherill both strongly criticised the package.

The idea that a $100 million package would be sufficient is "laughable" and "hopelessly inadequate", Mr Weatherill said.

The $1 billion that had been earmarked to help keep the automotive industry in Australia should be “quarantined” for the transition package, he said.

Prime Minister Tony Abbott and Industry Minister Ian Macfarlane yesterday announced plans for a $100 million fund to help create jobs in the states affected by the closure of Holden in Australia.

Mr Weatherill slammed the package as "insulting," while Mr Shorten accused the PM of treating workers with "absolute contempt".

Holden announced last week that it would stop making cars in Australia by 2017 claiming it is no longer viable.

The decision will see 2,900 people lose their jobs – 1,600 from the manufacturing plant in South Australia and 1,300 in Victoria.

Mr Abbott said the $100 million fund would be invested into infrastructure projects in South Australia and Victoria to generate jobs.

Of the $100m fund, Mr Abbott said $60m was new money from the Commonwealth. A further $12m had already been committed by Victoria and the government were currently in discussions for a similar commitment from South Australia.

"We would hope to get around $20 million from Holden," Mr Abbott said.

The government would also commission reviews of the strategic prospects of South Australia and Victoria, he said.

Mr Abbott insisted the Government would not prop up unprofitable businesses.

"We don't want to see corporate welfare, what we want to see is a country which has got the economic fundamentals right," he said.

"What we are not going to do is continue to throw good money after bad."

Mr Abbott conceded that some of the Holden workers affected by the closure would struggle to find work.

"I accept that particularly for older workers it is very difficult to move and to adapt when the business you work for fundamentally changes," he said.

Victoria's Liberal Premier Denis Napthine says the package is "a good first step" but he is expecting more money from the Commonwealth as a result of the review into his state's economy. 

"I would fully expect as Premier of Victoria that as those reviews are undertaken and report that they are accompanied by significant investment from the Federal Government in creating those new job opportunities," he said.

A Holden spokesman said the company welcomed the announcement and would "be in discussions with all governments ... over our involvement in this package and our contribution to it."

The Australian Industry (Ai) group welcomed the news of the package and the reviews of the South Australian and Victoria economies.

"Ai Group has been arguing for some time that the primary emphasis of industry policy must be on building opportunities for new industrial directions and ensuring we develop the capabilities to take advantage of these opportunities," said chief executive Innes Willox.

"(The state) reviews and the support of the growth fund announced today will go some way towards generating the new businesses investment and the development of new market opportunities both domestically and globally needed in the wake of the reductions in car assembly capacity.

"Of course the impacts of the changes in the auto industry will extend well beyond the South Australian and Victorian epicentres and we will be working closely with the Government to ensure that affected businesses in other states will not be left out of their considerations."

However, Opposition Industry spokesman Kim Carr said he wouldn't be surprised if Toyota closed its doors as a result of the Abbott government's lack of comprehensive action for the sector.

"The prospects of Toyota being able to weather this storm created by the government is very bleak," Senator Carr said.

"Toyota needs assistance and what the government is essentially saying today is there is no more money."

The Australian Manufacturing Workers' Union said the assistance package was simply "cruel".

Glenn Thompson, the union's assistant national secretary, said the Prime Minister did not understand or care how big a problem he has created for the Australian auto industry and the broader manufacturing sector.

"The Abbott government has chased the car industry out of Australia. According to conservative estimates, this will tear $21 billion out of the nation's economy.

"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 autoworkers are to find good jobs after their businesses close."

"If the government thinks that $60 million is going to fix the problems that it has created by chasing Holden out of the country – it is delusional," he said.

Mr Abbott said despite the challenges for the car industry, Australian manufacturing was still going strong.

"I believe that manufacturing is a vital part of a strong economic future for our country," Mr Abbott said.

"Our manufacturing can do well and our challenge as a government is to try and get the conditions right for it to do even better in the future."

Reviews of the South Australian and Victorian economies will begin immediately, to be chaired by Industry Minister Ian Macfarlane. A report to government is expected in February 2014.

"The reviews will develop support plans that are local, practical and take into account challenges facing South Australia and Victoria," Mr Abbott and Mr Macfarlane said in a joint statement.

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