AFR: Government chaos has spread to Holden

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Fresh from Phil Coorey at the AFR:

Emanating from the federal government are two entirely different sets of instructions to General Motors Holden.

One, which is coming from Prime Minister Tony Abbott, his deputy, Warren Truss and Treasurer Joe Hockey is that the government has made up its mind, Holden is not getting any more money and it must announce immediately whether it is staying or going.

The contrasting view comes from Industry Minister Ian Macfarlane…that the government should not make a decision until March when the Productivity Commission inquiry into automotive assistance reports.

…The government is clearly divided and the process has become a shambles.

As Weatherill said: “The Feds asked Holden to delay a decision about their future pending the Productivity Commission report. Now they bag them for delaying a decision about their future.’’

For most of this year, the government has known what Holden wanted in order to stay.

…The widespread view throughout the industry is that the government wants to escape the blame for Holden’s departure by portraying the car maker as the villain.

I’ve been viewing this as a “good cop, bad cop” strategy by the Government, for good or ill. But perhaps it’s just chaos. 

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.