Federal Treasurer Joe Hockey has warned that the manufacturing workers' union is threatening Australia's last car manufacturing with its "war with Toyota".
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.
Mr Hockey said the Australian Manufacturing Workers Union (AMWU) is playing a dangerous game in blocking reforms put forward by Toyota.
"The union, the AMWU, is at war with Toyota," the treasurer told ABC radio on Friday.
"They are creating the conditions that make it extraordinarily difficult for Toyota to continue producing cars in Australia."
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Industry Minister Ian Macfarlane said if Toyota is forced to close down, not only car workers' jobs would be lost but also the tens of thousands of jobs in the components industry in Victoria and South Australia.
He said goal is to lower the cost of producing cars in Australia and keep it competitive.
But he denied that this means cutting wages.
"It's my goal to maintain the industry and maintain the base salary of the workers," Mr Macfarlane told ABC radio.
But he said the archaic working conditions within the award must go, such as four paid hours off to go to give blood.
"Most people try and do that in their own time, and if it is in work, they do it in a quarter of that time," he said.
The Victorian government this week presented its plan to save local car making operations and manufacturing jobs more broadly after last year's decisions by Holden and Ford to pull out of Australia in the coming years.
Mr Macfarlane was reluctant to discuss the plan while a Productivity Commission review into the industry was still in progress. It is due to be finished in March.
But he said there was a very close working relationship between the Napthine and Abbott governments.
In stark contrast, he said the South Australian government this week came out with a "flash in the pan" plan where they expect the federal government to put in $3 billion to prop up industries in their state.
Mr Hockey has again 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.
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."
