Holden would keep grant, coalition says

GM Holden can expect the federal coalition to honour the $215 million grant it was given by the federal government to keep making cars in Australia until 2022.

After GM Holden on Tuesday warned a policy change might force it to review its commitment to keep building cars in Australia, the opposition said it was critical of the grant when it was made in March, but it would honour government contracts if elected.

"We have always complied with contractual arrangements that previous governments have entered into, and there is no reason to deviate from that good practice," opposition innovation, industry and science spokeswoman Sophie Mirabella told AAP.

GM Holden chairman and managing director Mike Devereux told reporters at a briefing in Melbourne that without government assistance there would be no car-making industry in Australia at all.

In March GM Holden committed more than $1 billion over the next 10 years to keep building cars in Australia, in return for $275 million in state and federal funding.

Mr Devereux said if that was put at risk by a change of government, GM Holden would review its commitment.

"If there is a change in government, then make no mistake, yes, Australia needs to have contemporary policy that gives us certainty over time and that is competitive with other countries.

"We need that kind of policy to be able to build things here between 2015-2022."

The opposition is yet to reveal its auto policy, but it has said it would cut $500 million from a $3.4 billion government automotive scheme to subsidise auto plant upgrades.

Mr Devereux said he hoped the opposition would change its public statements on the issue, because international managers were asking questions about the country's long-term business plans.

He noted industry assistance was a big factor in the re-election of President Barack Obama in the USA, predicting it would figure also in next year's federal election.

"It became an election issue, it was front and centre," Mr Devereux said.

"I believe 2013 will be a year that Australia decides whether it wants to have an auto industry or not."

He called for an independent review of the industry.

Ms Mirabella welcomed the call, saying a Productivity Commission review was coalition policy and had been scheduled for 2008 but was abandoned by the Rudd government.

"What we want to do is work with the Productivity Commission and the industry to have this review and come up with a better way forward, because we think there is a better way and we want to support the car industry and have a viable industry," Ms Mirabella said.

The Australian automotive industry employs about 55,000 people and supports another 200,000 jobs, with Holden accounting for about 40 per cent of output nationally.

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