INDUSTRY Minister Greg Combet has warned taxpayers won't underwrite the impacts on the high Australian dollar on struggling firms.
As union boss Paul Howes demanded government assistance for manufacturers and Reserve Bank intervention to bring the dollar down, Mr Combet said Labor would support jobs "wherever and in any appropriate way we can", The Australian reports.
Mr Combet today revealed he would meet Alcoa representatives this week, following its announcement that its Point Henry aluminium smelter could close, and that he and the Prime Minister would meet personally with workers at the company tomorrow.
He said the government was talking closely with manufacturers about the pressures they faced as a result of the high dollar.
"But at the end of the day, the very important thing is that I don't think any government can underwrite exchange rate risk for all the companies in the economy," Mr Combet told the ABC's Insiders program.
"What we can do is get the policy settings right for the transformation of the economy when you look to the future."
As debate rages over taxpayer handouts to industry, Mr Howes said the government and the RBA needed to act to protect jobs.
"It is important that when there is uncertain economic conditions that government does intervene from time to time o do the right thing," the Australian Workers Union boss told Sky News' Australian Agenda.
"And frankly, we need to start addressing the issue about Australian dollar. Because it is not a good thing for the dollar to sit where it is at the moment and it is time for the policy makers that are responsible for that principally the Reserve Bank to be called to account for what they are doing."
Mr Howes said assistance for manufacturers, such as car makers, was targeted at industry transformation and would wind up when the industry was placed on a sustainable footing.
But Mr Combet said the dollar was likely to remain high for some time to come, requiring businesses to make fundamental changes.
He said it was the role of government to get policy settings right to encourage investment and drive productivity improvements.
"The economy has got to make this adjustment and we are going to see a transformation," he said.
"But the government will be looking of course to the economy making the shift in its competitiveness, becoming more productive, and for the manufacturing sector in particular, that means new technologies, heavier investment in research and development, and heavy investment in skills."
Mr Combet said the difficulties faced by firms today had to be considered in the broader context of 25 years of structural change.
"In fact, during the course of a year, about a million people change jobs in our economy. So there is always change. You can't pretend the economy is going to stand still," he said.
"But we assist a people through the process of change. We are a Labor government but we are getting the policy settings right that will stimulate investment and improve competitiveness in the future."
He said there was already government significant support for the aluminium sector, and noted that Alcoa had not blamed the carbon tax for its decision to place Point Henry under consideration for closure, with the potential loss of 600 jobs.
He said the impact of the carbon tax on the sector was minimal equivalent to a 1c shift in the exchange rate and the industry would receive about $3.5 billion in adjustment assistance under the government's Clean Energy Future package.
Read more at The Australian.