Car sector cuts face Senate stall

The Federal Government's plan to cut $900 million in car industry assistance looks set to stall in the Senate as a new inquiry is launched into the industry's future.

Labor, the Greens, the Palmer United Party and crossbenchers Nick Xenophon, Bob Day, Ricky Muir and John Madigan have rejected the plan to cut funding for car makers and suppliers by ending the Automotive Transformation Scheme.

The Government says it is appropriate to cut funding back to $700 million between now and 2018, as Holden and Toyota will stop building cars in Australia by the end of 2017.

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A Bill to enable the cuts passed the Lower House in October and is due to be debated in the Senate.

Labor industry spokesman Kim Carr, who will today seek the Senate's approval of a new broad-ranging inquiry into the car sector, said every country with an automotive sector had some government support.

"Australian people expect us to be able to be more than just a farm or a quarry," he said. "The automotive industry is one of those key sectors that's able to provide us with the skills and the capabilities we need to secure future investment in manufacturing more broadly."