No help for SPC Ardmona is a "marker" for industry policy, Abbott says

The federal government has rejected the bid by the embattled food processing company SPC Ardmona for $25 million, in a victory for the Liberal economic “dries” and “a marker” for industry policy.

Announcing the decision Prime Minister Tony Abbott stressed that parent company Coca-Cola Amatil was profitable and well resourced and had begun an excellent restructuring of the SPC Ardmona. He was sure that Coca-Cola Amatil’s chairman, the highly respected David Gonski, “is not going to let the workers down”.

Cabinet spent three hours on the issue with all points of view canvassed. This followed an earlier discussion before Christmas. Abbott said the decision “sets an important marker”. The government would set the parameters to make sure that the climate for business was as good as it could be, but restructuring of companies should be led by business.

“This is a government which will make sure that the restructuring that some Australian businesses need, that some Australian sectors need, is led by business as it should be.”

The issue has divided the government, with Treasurer Joe Hockey strongly resisting the company’s push for the funding injection, while Industry Minister Ian Macfarlane has been sympathetic to its case. Agriculture Minister Barnaby Joyce was looking for a deal that would assist the Shepparton enterprise, which is the last fruit cannery in Australia.

With many local jobs at risk, local federal member Sharman Stone has publicly lobbied for assistance, which was also supported by a panel that the government set up including two senior business figures Catherine Livingstone and Dick Warburton and former Labor Industry Minister Greg Combet.

The SPC Ardmona decision follows the government’s earlier hard line on Holden, which is planning on closing production in Australia.

Abbott stressed that the company needed to renegotiate the enterprise agreement covering SPC Ardmona workers. He said this was not a matter of cutting wages but changing the conditions, for example for paying out sick leave and redundancy, which were “well in excess of the award”.

Ian Macfarlane said he had inherited the company’s submission from Labor and wanted to put it in front of the cabinet. The discussion had been extensive and there had been a fair hearing. The outcome was a “clear delineation” on industry policy.

Abbott said he was confident that with the needed changes SPC Ardmona could survive and flourish. He distinguished the government’s decision to not help SPC Ardmona from his pre-election promise to assist Cadbury, by saying that Cadbury had a tourism dimension and that the money was directed to tourism infrastructure.

Michelle Grattan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published at The Conversation. Read the original article.