(Transcript from World News Australia Radio)
Industry Minister Ian Macfarlane will work with the South Australian and Victorian governments, as well as business leaders in those states to work out how the money will be used.
Prime Minister Tony Abbott has also announced that he will chair a new taskforce for the manufacturing industry.
Amanda Cavill reports.
(Click on audio tab above to hear full item)
The package will include $60 million from the federal government, an additional $12 million from Victoria and the government says it expects South Australia to contribute the same.
Holden is also expected to contribute around $20 million.
The Prime Minister says the fund will be used to invest in potential employment-generating projects in South Australia and in Victoria and will support business research and development opportunities.
He says the government will be commissioning reviews of the strategic prospects of both of those states.
He says the full details of the assistance package won't be known until after June next year.
Mr Abbott, who refused to give more money to Holden when it was deciding on whether to leave Australia, says he still holds the view that industry assistance is not the right approach.
He says the money is not necessarily for individual businesses.
"I'm not saying that none of this money will be available to businesses but they will have to make a very strong case and they will have to be able to demonstrate why it is that our money should be provided in this way. We're not here to sort of build a field of dreams, you know, we are here to make sensible economically responsible decisions."
The carmaker's decision to end its Australian manufacturing operations means 2,900 Holden workers will lose their jobs: 1600 from the manufacturing plant in South Australia and 1300 in Victoria.
A further 33,000 people in the automotive components sector are also likely to be affected and Holden's closure has cast doubt on the entire automotive industry in Australia, with concerns it may force Toyota and the broader car parts sector to follow suit.
Mr Abbott has also announced he'll chair a new taskforce for the manufacturing industry, saying the government doesn't want to solely focus on the car industry, or on South Australia and Victoria.
He says the taskforce will adopt a national industry investment and competitiveness agenda to take to cabinet in June next year.
"We'll be looking at new options to reduce the costs of energy, new options to encourage innovation such as employee share schemes and commercialisation programs because it is important to give manufacturing, new manufacturing, manufacturing for the future not just for the past, the best possible deal but it's also important that we do it in a considered and comprehensive way, that we don't simply make knee-jerk, piecemeal decision in response to the crisis of the moment.
Also sitting on the prime ministerial taskforce will be Treasurer Joe Hockey, Industry Minister Ian Macfarlane and Trade Minister Andrew Robb
Mr Macfarlane says he'll call for expressions of interest and meet industry groups and companies to discuss them in January.
He says the projects will not only be funded in areas directly affected by the Holden decision, but in other areas where manufacturing is struggling.
"I've been alarmed at the parlous state of industry in Australia, particularly as a result of constant changing of rules and regulations, of excessive red tape, of poor decisions by Government who failed to pursue long-term strategic outcomes and just look at quick fixes and if I look across the path of past industry Ministers, I see money thrown into buckets which really has no long-term impact on the viability of companies so the opportunity is there, it was always going to have to happen."
The Australian Manufacturing Workers' Union has described the Prime Minister's assistance package to Holden workers as cruel and failing to understand the scope of the problem the government has created.
The Union says Tony Abbott does not seem to understand or care how big a problem he has created for the Australian auto industry and the broader manufacturing sector.
Opposition leader Bill Shorten says the package is woefully inadequate.
Mr Shorten says if the government had given Holden the addition $500 million it needed to stay in Australia, the thousands of jobs now affected by the closure would still be in existence.
"It provides little support to thousands of people and hundreds of small businesses who have been dreadfully affected by the decision of Holden to close its doors in 2017. It isn't right that the Abbott government is proposing to offer some taxpayer money now when for want of them taking decisive action earlier there'd be thousands of jobs after 2017."
The Prime Minister says while some Holden workers will find the transition difficult, others will probably be liberated to pursue new opportunities and get on with their lives.
