Focus moves to retaining Toyota

Tony Abbott. Photo / AP

The Australian Government will work with Toyota to ensure the automotive sector remains viable in the country, Prime Minister Tony Abbott has said.

Holden's US owner General Motors announced on Wednesday that it would stop making cars in Australia from 2017, shedding almost 3000 jobs in Victoria and South Australia.

This leaves Toyota as the major carmaker, but there is speculation it could also go because of supply chain problems after GM's decision as well as cost pressures.

Abbott said generous assistance had been offered to keep Holden in Australia "within the parameters" of the Coalition's industry policy taken to the election.

"I deeply regret for the last three months, which is as long as we have been in Government, we haven't been able to hold Holden," Abbott said. "But the fact is there was already money on the table. The challenge now is to ensure, as far as we reasonably can, that Toyota stays ..."

Opposition leader Bill Shorten said extra government support could have kept Holden going until the "middle of next decade".

"I do not believe a car industry can survive in Australia with a Coalition Government," he told ABC Television.

South Australian independent senator Nick Xenophon said senior government ministers had forced Holden's hand.

"The tipping point was those reckless comments made in the Parliament," he said, citing Treasurer Joe Hockey's dare to Holden that "either you're here or you're not".

South Australian Premier Jay Weatherill says any money already allocated to Holden should continue to flow to his state and Victoria as the firm ceases car manufacturing. Weatherill and Victorian Premier Dr Denis Napthine were meeting Abbott in Canberra to discuss aid for affected workers and their families.

"All of the money that would be otherwise going to Holden should be quarantined and given to South Australia and Victoria," Weatherill said.

Napthine said his state needed "substantially more" than the A$50 million ($54.5 million) being spent to help workers after earlier closures by Ford.

Some 1300 Holden jobs will go from Victoria and 1600 from South Australia.

-AAP