Holden workers displaced by the car maker’s end of production in 2017 have been thrown a $100 million lifeline.

Prime Minister Tony Abbott has drawn a line in the sand on federal government handouts to businesses as he unveiled a $100 million package for Holden workers.

The package was attacked by Labor and unions as an insult to 2900 workers in Victoria and South Australia who will lose their jobs when Holden stops producing cars in 2017.

SA Labor premier Jay Weatherill said the money being offered by the Commonwealth was laughable, but his Victorian Liberal counterpart Denis Napthine said it was a good first step.

The federal government has kicked in $60 million and the Victorian and South Australian governments will each be asked to contribute about $12 million while Holden will be asked for $20 million.

Details of how the money will be spent will be worked out in talks between federal Industry Minister Ian Macfarlane, the two states and industry groups. The fund won’t start until at least July 2014.

Holden workers could be retrained, federal government agencies could shift to the affected regions and there could be new infrastructure projects.

The prime minister will also chair a new task force to develop a national industry agenda and consider the future of the last remaining major car company, Toyota, and the automotive parts supply chain. Its recommendation are due by the end of June.

But Mr Abbott indicated to businesses there would be no more “corporate welfare” for other distressed companies.

“What we want to see is a country which has got the economic fundamentals right,” he said.

“This government will be very loathe to consider requests for subsidies.

“We will be very loathe to do for businesses in trouble the sorts of things that they ought to be doing for themselves.”

Mr Weatherill says the Commonwealth should contribute much more to help create jobs in the state’s manufacturing sector and the wider economy.

“The federal government’s response to the closure of Holden is pathetic,” Mr Weatherill said on Wednesday.

“The federal government doesn’t understand the urgency of responding to this and they don’t seem to care.”

Mr Abbott’s announcement of a review of the entire South Australian economy, to be headed by Mr Macfarlane, was a “transparently political exercise” so close to the March state election, the premier added.

The premier said a meeting with industry and union leaders on Thursday would develop a comprehensive proposal to put to the federal government.

Dr Napthine, who met with industry figures on Wednesday to discuss the future of manufacturing in his state, said he expected the federal government to contribute more.

“I would expect as those reviews are completed … they would be accompanied by serious further commitments of funding from the federal government,” Dr Napthine said.

Opposition Leader Bill Shorten said the federal money was “woefully inadequate”, coming a day after the government confirmed $500 million would be taken from car industry assistance over the next four years.

Reserve Bank of Australia governor Glenn Stevens told a parliamentary hearing public money should be used to help companies adapt, “not to help them remain as they are if they’re not fundamentally viable”.