The federal government says the manufacturing union is waging a war with Toyota and jeopardising the future of Australia's last car maker.
However, the union and the opposition say the government is just trying to shift blame to workers for its own inaction.
The government wants to see the union's archaic work practices scrapped, but denies this includes cutting base salaries as the car maker aims to slash labour costs by $17 million.
The Victorian government on Thursday presented its plan to save Toyota's local carmaking operations, asking the Abbott government to make a "significant contribution" to Toyota to ensure it continues to build vehicles in Australia beyond 2017.
The plan follows last year's decisions by Holden and Ford to pull out of local manufacturing in the next couple of years.
Federal Treasurer Joe Hockey said the Australian Manufacturing Workers Union (AMWU) was playing a dangerous game in blocking reforms put forward by Toyota.
"The union, the AMWU, is at war with Toyota," he told ABC radio on Friday.
"They are creating the conditions that make it extraordinarily difficult for Toyota to continue producing cars in Australia."
But the AMWU hit back, saying the treasurer's suggestion was an excuse for not supplying vital industry funding.
AMWU Victorian secretary Steve Dargavel said the federal government was blaming workers for the pressures the auto-industry was facing.
"It's outrageous for Mr Hockey to suggest that it's the workforce's fault that he adopts a position that Australia should denude itself of a manufacturing industry," Mr Dargavel told reporters in Melbourne.
Federal Industry Minister Ian Macfarlane has suggested that it's up to the workers to reach an agreement with Toyota.
He says Toyota has a future making cars in Australia but he has warned unions and the company's 2500 manufacturing workers to help cut costs.
Opposition Leader Bill Shorten said the Abbott government was blaming car workers for its inaction on the car industry.
"You have got to love the Abbott government; they never miss a chance to kick the vulnerable or the low-paid or the disempowered," Mr Shorten told reporters in Melbourne.
"Now we see Treasurer Joe Hockey, fresh from selling out and deserting Holden car workers, now turning his bully pulpit on Toyota car workers."
Mr Hockey has made it clear that he has no plans to extend subsidies.
"We are being fair dinkum with Australian business that you cannot continue to rely on government support, on taxpayer support, in order to remain profitable," he said.
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