Truss pens letter to Holden asking about its future plans

ACTING Prime Minister Warren Truss has written to Holden to clarify statements about the uncertain future facing the car manufacturer.

Mr Truss' letter, written today, was sent urging Holden chief Mike Devereux to provide "a clear explanation" of its plan regarding manufacturing operations in Australia.

The letter topped off a day of debate in parliament over the car industry, a $300 million child care wages subsidy and, again, the carbon tax.

Assistant Education Minister Sussan Ley announced she was ending the $300 million program launched earlier this year, amid questions of conflicts of interest surrounding its advisory and claims of bias.

She said the program was effectively used by unions to bolster membership, after a study commissioned by the government revealed such issues.

To that end, the government will remove the subsidised wage increase - which would have provided about 30% of child care workers with a $3 an hour pay rise - in favour of "professional development" funding.

While Ms Ley said the funding already contracted would be delivered, she has also requested the major child care providers pay the money - some $65 million - back to the government.

However, she admitted on Tuesday the government had no actual legal recourse in the matter, relying solely on the good will of the private firms.

Ms Ley said an independent review of the program found it was not only being used to prop up union membership, but there also were questions over conflicts of interest, with the two largest beneficiaries of the fund sitting on the advisory board.

While the review itself acknowledged the potential for conflicts of interests, it also found there was no evidence that those companies on the board had used the position to any undue advantage.

Opposition early childhood education spokeswoman Kate Ellis said the cancellation would potentially hit "thousands" of child care workers in the hip pocket - removing what was for some a 15% pay rise.

While the issue came to a head in Question Time on Tuesday, it was again questions over car industry subsidies that dominated, as the government tackles the complex policy area.

Treasurer Joe Hockey said the government had already confirmed an extra $1 billion for the industry to 2015, but further grants were not on the table.

However, Industry Minister Ian MacFarlane said he wanted a "measured" response, and despite arguing privately for more subsidies, he said in the House the government was still considering its position.



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