Opposition industry spokesman Kim Carr says the federal government has demonstrated an unparalleled hostility to General Motors, owners of Holden.
Federal Labor has accused the Abbott government of bullying Holden into making a decision about its future in Australia.
But acting prime minister Warren Truss insists there is “completely adequate” committed taxpayer support for the car maker to decide whether it wants retain its local operations.
Mr Truss has written to Holden boss Mike Devereux demanding the company provide a clear explanation of its future intentions.
Opposition industry spokesman Kim Carr, who helped negotiate a post-2020 assistance package for Holden before the September election, said the government was acting in a “dishonest and cowardly” fashion.
“This government has demonstrated an unparalleled hostility to General Motors, an unparalleled hostility to the automotive industry,” he told ABC Radio on Wednesday.
International companies operating in Australia would be shaking their heads at the government’s “incredible bullying and hectoring approach”.
The car industry wants the coalition to drop its plans to cut $500 million in assistance between now and 2015.
Mr Truss says there is still more than a billion dollars unspent from the automotive transition scheme.
As well government plans to abolish the carbon tax and not proceed with Labor’s fringe benefits tax changes on motor vehicles would save the industry just as much.
“There is completely adequate funding there to deal with automotive transformation scheme requirements in the mid-term,” Mr Truss told ABC radio.
He warned there could not be a “never-ending money stream” for any industry.
Senator Carr says there is no committed government assistance for the sector past 2020, adding Labor’s deal with Holden would have cost considerably less than $150 million a year.
Labor MP Nick Champion said the problem facing manufacturers, such as Holden, was the strong Australian dollar and it was time parliament took a look at the issue.
“This is a dollar problem, not a wage problem,” he told reporters in Canberra.
“I think we have to start having a serious conversation about the dollar.”
The high dollar was hurting industries beyond car manufacturing, at a time when Australia’s competitors in Asia and elsewhere were trying to rein in their currencies, Mr Champion said.
Outspoken Liberal MP Dennis Jensen said successive governments had been pumping money into car manufacturers, but had been ineffective in extracting compromises out of them.
There should not be any further taxpayer assistance to Holden until it moved away from “mid-20th century type workplace practices” that hinder productivity.
“It’s not on,” he said.
“Certainly not until such time as Holden makes some significant steps in improving their productivity.”