The Abbott government is allegedly close to rejecting food processor SPC Ardmona’s plea for funding amid fears that it could spark a ‘dangerous precedent’ for other companies in financial trouble.
Following discussion on Monday, ministers have stated that the processor is largely responsible for its cost pressures amid allegations that dozens of workers are on salaries of $120k, and are subsequently placing the onus on Coca-Cola Amatil, SPC Ardmona’s parent company to make a stronger case, The Australian reports.
The discussions were shaped by advisors who were allocated to the SPC case including former labor minister Greg Combet, and business leaders Catherine Livingstone and Dick Warburton.
Cabinet discussed its reservations about the assistance package, stating that its high costs were a result of union agreements with generous pay rises. The Australian reported that workers will receive a five percent pay rise over 10 months, while some team leaders will enjoy a 8.5 percent increase over the period.
The decision has been placed on hold until next year to allow time for a final report from the Industry Department and co-coordinating comments from Treasury.
Prime Minister Abbott commented, "government support cannot substitute for strong management, and strong management in a company under pressure starts with getting your costs down.
“…If you've got a problem in any particular area, you have got to tackle it and you've got to tackle it purposefully and you've got to be prepared to take responsibility for what you do rather than simply say it's all too hard, government's got to fix the problem."
The Nationals and rural Liberals have warned the government that up to 2000 jobs could be at stake in addition to the grim flow on effects that thousands of farmers will experience should the company’s Shepparton cannery close.
Agriculture minister Barnaby Joyce also voiced his opinion stating that his concern was “not about the company, it's about the growers."
"The company is merely an article to make sure the best returns go back to growers at the farm gate. The rest of my discussions I will keep private and within cabinet," he said.