Federal treasurer Joe Hockey has said that government assistance would not be given to “lazy” companies, seizing on comments by a General Motors executive that increased subsidies would not have saved Holden’s Australian manufacturing operations.
In an interview with a newspaper, Hockey said that government cash was “inevitably” used in some cases to boost dividends and support inefficient workplace practices. The treasurer said that greater accountability accompanying taxpayer help would be needed in future.
“If we are going to provide any support to any company, we want to do a complete due diligence on a company's balance sheet,” Hockey told The Australian.
"It is not the responsibility of taxpayers to prop up unprofitable companies... At the end of the day you're effectively nationalising the company if the subsidies are so great that the only way it can continue is if it receives government support.”
The treasurer was responding to the news yesterday that Holden, which will cease its car making in Australia in 2017, would not have been saved even if it was granted increased subsidies. Stefan Jacoby, GM’s head of international operations and the man who proposed that Holden quit Australia, made the admission at the Detroit Auto Show this week.
Jacoby's explanation contradicts claims by the opposition that the Abbott government's refusal to commit extra money was the reason Holden's Australian factories will shut.
Hockey’s comments follow last week’s remarks by trade minister Andrew Robb on industry assistance, in which he said that structural change and company failures were preferable to handouts. This was an apparent response to Victorian MP Sharman Stone, an advocate of co-investment in Goulburn Valley’s proposed factory upgrades.