Govt not bank for car industry, Lib MP

MP Josh Frydenberg says there are limits to the support the federal government can give car makers. Source: AAP

FEDERAL coalition coffers cannot be used as an ATM for struggling car companies like Holden, one coalition MP says.

Liberal Mr Frydenberg, who is a parliamentary secretary to the prime minister, says the role of government is to create an environment where businesses can prosper.

"But it's not to be there as the banker for free enterprise," he told Sky News on Sunday.

"We cannot use the taxpayer as an ATM for the car industry."

Mr Frydenberg repeated government calls for Holden to declare the fate of its Australian manufacturing operations, with speculation that it has already decided to close by 2016.

Holden officials will provide some details about where the company is heading at a Productivity Commission inquiry hearing in Melbourne on Tuesday.

Mr Frydenberg says the government hopes the car maker will stay in Australia, but there are "certainly limits" to the amount of support it can provide.

"We have $1 billion committed to 2015 in the automotive transformation scheme," he said.

"That money is available to the sector."

Shadow treasurer Chris Bowen says Holden is too important for the government to let it "walk away" from Australia.

He said the car industry around the world involved huge amounts of government intervention: "You have to accept that reality".

"If we do want a car industry, then we need to recognise that we're dealing with a global situation in which governments intervene to support their car industry," Mr Bowen told Sky News.

"If Australia's going to have one, we have to play on the same field."

He said it would be "very difficult" for Toyota to maintain its local operations if Holden left.

Earlier this year Ford announced it would end manufacturing in Australia in 2016.

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