Abbott’s promise of ‘better jobs’ is cold comfort for retrenched car workers

The Australian flag flies at Toyota’s Altona plant in Melbourne. The company has announced it will be leaving the country. Photograph: Paul Crock/AFP

So we’ve lost the car industry, and with it at least 40,000 jobs. Fear not, says Tony Abbott, there’ll be “better jobs” down the road.

But since his new “line in the sand” against industry handouts is a contributing factor to this fundamental economic transformation – a decisive factor, according to former Labor minister Kim Carr – and given that losing the entire car industry is a pretty big deal, we have heard surprisingly little about where these new jobs might be, or how the government will encourage them along, or how it will help the workers whose lives are crushed in the meantime.

The Coalition’s manufacturing policy was a sparse thing, offering a “manufacturing transition grants program” of $50m over the next four years, a gradual increase in money for export market development grants and some general rhetoric about how the Coalition was “committed to a strong manufacturing-based sector”.

It deliberately avoided the crucial point – whether there would be subsidies for the car industry after 2015. That was pretty important, since the then industry spokesman, Ian Macfarlane, had already correctly predicted the car industry would ‘'collapse entirely’' without them.

“If you look across the world almost every government supports its car industry … it’s decision time in Australia and there’s no middle ground. You either support the companies into manufacturing a new model here or you cut them loose and let them go,’' he said in 2012.

When Holden announced last year it was indeed going in 2017, the Abbott government announced a review of the South Australian and Victorian economies and $60m in federal help, but it seemed to have been done in a rush and the government was unclear about what it would cover.

Abbott said it would be used for “promoting the industries of the future, it may be feasibility studies, it may be investment in research and development ... it may over time involve significant new infrastructure spending”. But he said it would almost never be available for grants to businesses, which were on the wrong side of the new line in the sand.

Yet a press release announcing the fund said it would provide “grants to existing and new businesses that establish or expand manufacturing operations in South Australia or Victoria” and “support for existing component manufacturers in Victoria and South Australia to adjust their business output or business model to non-automotive and overseas customers, or who commence or expand export activity”.

By the time the minister called for submissions, this direct reference to grants was gone and he has since then been hard at work figuring out exactly what the fund would do.

When Toyota announced its departure on Monday, Macfarlane said the fund could be expanded. Abbott points out the carmakers aren’t closing for several years, so he has time.

But what could a government averse to “corporate welfare” actually do? It hasn’t said. But here are some of the ideas it has been receiving. The bad news for a government preparing an austerity budget is that most of them cost a lot of money.

• Not proceed with the former Labor government’s plan to deny big companies (with revenue over $20bn) access to the research and development tax breaks. Reversing the measure would also reverse budget savings worth more than $1bn over the next four years (Ai group).

• Introduce new research and development incentives. Also expensive. (Victorian government).

• Spend more money on reskilling the sacked workers and on training in general (South Australia wants $37m from the commonwealth for reskilling, Ai group says the vocation education and training budget should be increased by 3% over time).

• Spend more on the automotive diversification program, which helps car component makers change their businesses to supply other industries (although this sounds awfully like the kind of direct grant the government has ruled out). South Australia wants $26m for this.

• Commonwealth defence spending – for which Victoria and South Australia are competing. The Victorian government is pushing bids by its state’s companies for $27bn worth of defence contracts, including patrol boats and new combat vehicles.

* Commonwealth spending on roads – both states are discussing specific projects – but not public transport, which the Abbott government insists is the responsibility of the states.

• Reverse some of the $400m in cuts to the former Labor government’s clean technology program, which was funded from the carbon tax but which had already promised money to more than 600 manufacturers to retool and revamp their operations – often resulting in modernisation as well as reducing emissions. The $25m promised to SPC Ardmona by the former government came from this program. About 100 other manufacturing companies will also now miss out on grants they had been promised but for which they had not signed contracts by the time of the election. Labor says the government would improve the prospects of manufacturing and reduce emissions if it funded most of these through its Direct Action climate change fund