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The Abbott Government and Shorten Opposition have drawn lines in the sand on the plight of Holden and Qantas, setting up a debate over handouts to failing Australian firms.

Shadow treasurer Chris Bowen signalled yesterday that both companies were vital to the overall Australian economy and deserved Federal assistance.

But Mr Abbott's own parliamentary secretary Josh Frydenberg made clear the role of government should be kept to a minimum.

Holden is expected to confirm within days that it may stop production in Australia by 2016.

Such a move would almost push the last remaining manufacturer in Australia, Toyota, to the brink.

Qantas, which is losing $5 million a week, is looking for government assistance, ranging from a change to the Qantas Sales Act to a possible renationalisation.

Mr Bowen said the car industry, which according to some studies helps 200,000 people either directly or indirectly, was too important to let fail.

He said car makers around the world were supported by governments and Australia had little choice but to follow suit.

Qantas as Australia's national carrier also faced government-backed competitors.

Although a change to foreign ownership laws would not be supported, Labor backed some assistance.

Pressed in an interview on Sky News on whether Qantas was too important to fail, Mr Bowen said: "Effectively, yes."

But Mr Frydenberg said government coffers could not be used as an automatic teller machine for the car industry.

There is some disquiet within Liberal ranks at Mr Abbott's message, given that the Government-initiated Productivity Commission inquiry into the car assistance has barely started.

Holden officials are due to front the inquiry tomorrow.

The inquiry is supposed to deliver a preliminary report in coming weeks.

And the Government is committed to a $500 million cut in government assistance.

Despite this, Mr Frydenberg said governments could not be asked to prop up businesses that ran into trouble.

"Our default position is to say leave it to business, leave it to the individual, leave it to free enterprise, and try to keep government's role to a minimum," he said.