The Abbott government's cuts to car industry assistance could be blocked in the Senate.
Industry Minister Ian Macfarlane announced on Tuesday the shutdown of a number of automotive sector programs, with funding redirected to new innovation and training plans.
Unions estimated the cuts to the auto industry totalled $838 million.
Under the government's new schemes, $480 million will be spent on an entrepreneurs' infrastructure program bringing research and business together to develop and commercialise home-grown ideas.
There is also a $476 million industry skills fund and $50 million for a manufacturing transition grants program.
A $155 million growth fund will help industry transition from car manufacturing to new products.
"Our new industry approach builds on our strengths by improving productivity, rewarding entrepreneurship and giving companies the structural support to back themselves," Mr Macfarlane said.
But independent senator Nick Xenophon said the budget tossed a "wrecking ball" through the automotive sector.
"The federal government is destroying any chance of new jobs and new industries and new markets being found," he said, adding he would oppose the bill when it came to parliament.
Democratic Labor Party senator John Madigan said the budget had pulled the rug from under many automotive businesses and threatened 33,000 jobs.
Labor spokesman Senator Kim Carr declined to comment, but has previously expressed concern about industry assistance cuts.
The budget cut $215 million that was to go to Holden to make its next-generation vehicles.
A company spokesman said Holden won't need the money as it will stop making cars in Australia in 2017.
The Australian Manufacturing Workers Union said the government had failed auto workers in Victoria and South Australia.
"Tony Abbott's `liberated' automotive workers won't be feeling very bright after today's budget," AMWU president Andrew Dettmer said.
He said the budget's total funding cut for the car industry came in at $838 million and car makers were now likely to close their factories earlier than expected.
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