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Abbott: no extra money for Holden

Tony Abbott says Holden already gets enough tax-payer assistance, but Labor says the government is setting up Holden to fail.

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The Abbott government has confidential documents that show it would cost less than $150 million extra a year to keep Holden in Australia until 2025, says former industry minister Kim Carr.

For $300 million extra a year, the government could ensure Holden, Toyota and more than 160 car parts makers stayed in Australia, according to confidential advice taken to the Rudd cabinet in July.

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$300 million: The cost of keeping Holden, Toyota and 160 car parts makers in Australia.

Senator Carr says the documents were drafted by senior officials in the Department of Industry and Innovation. This formed the basis of Labor's election policy.

The claim comes as a dominant group of Coalition ministers says the government can do nothing to keep Holden in Australia, because the company has made up its mind and "doesn't want to be saved".

The exact dollar amount agreed to by the previous government has not been made public, and Senator Carr said he would not breach confidences by revealing it.

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"There's absolutely no doubt that department officials ... know the detail of the amounts required": Former industry minister Kim Carr. Photo: Alex Ellinghausen

But it was "less than half" the $300 million extra a year required to keep the entire industry in Australia until 2025, he said. "There's absolutely no doubt," he said, "that departmental officials . . . know the detail of the amounts required.''

After the government took office, Industry Minister Ian Macfarlane would have been briefed on talks in which Holden had agreed to stay until 2025, build two "next generation" models and invest another $1 billion, Senator Carr said. Asked whether Mr Macfarlane had seen the documents, his spokeswoman said: "The advice the minister receives is confidential."

A senior Liberal source with close links to the industry, said he understood the $300 million figure was correct, and would keep Holden, Toyota and more than 160 parts suppliers in Australia.

If the government wanted to secure the industry until 2025, it would need to restore the $500 million it cut from the assistance fund and commit to $300 million a year from 2016, the source said.

A spokesman said Holden would not "engage in speculation" and refused to say whether it had already decided to leave Australia.

South Australian Premier Jay Weatherill said that Prime Minister Tony Abbott was “recklessly” ignoring the advice from Holden management on what it would take to keep the carmaker in Australia.

The Premier, who represents a state that stands to lose thousands of jobs if Holden leaves Australia, will meet Mr Abbott in Canberra on Thursday.

Mr Weatherill told ABC radio on Monday that ''right wing ideologues'' in the Abbott government had ''systematically undermined'' Mr Macfarlane by making false claims that Holden had already decided to leave Australia.

In a recent phone conversation, Holden's managing director Mike Devereux had denied that a decision had been made, the Premier said.

Mr Macfarlane has been trying to convince cabinet colleagues to approve extra funding, saying that if there is no more money the industry will disappear in Australia.

But so far he has been overwhelmed by economic "dries" led by Treasurer Joe Hockey, who believe the government should stop giving "blank cheques" to car makers. Ministers continue to give anonymous briefings to journalists to say Holden has decided to leave.

"My understanding is that Holden long ago decided to leave," one said. "They are just playing a game now, just trying to manage their PR.''

Another said Holden's management was "full of it". "They don't want to be saved. If they were serious they would be making serious attempts to talk to the PM and Ian Macfarlane. They haven't."

Mr Abbott appears to have made up his mind, saying his government has given Holden enough money and the car maker owes it to the public to declare its intentions.

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