CHANGES to tax concessions on cars provide the budget with a "sugar hit" but risk tipping Australia's car manufacturing industry over the edge, independent Senator Nick Xenophon says.
Senator Xenophon said the car assembly sector was fragile and questioned why the government would do anything to put it at risk.
"The federal government owes an enormous duty of care to our car industry given that it's in a very precarious situation," he told reporters in Adelaide on Wednesday.
Senator Xenophon said if Holden closed its manufacturing operations in Adelaide it would cost many thousands of jobs and turn the city's northern suburbs into an industrial wasteland.
He said the extra fringe benefits revenue looked good on paper but could result in the government paying out more in Centrelink payments if the auto industry collapsed.
"Right now why do anything to put our car industry in jeopardy for a sugar hit to the budget?" Senator Xenophon said.
His comments came as the South Australian government also revealed Premier Jay Weatherill would travel to Canberra on Friday for talks on the tax changes with Industry Minister Kim Carr.
The changes to tax arrangements on car leasing and salary sacrifice packaging will raise $1.8 billion to help support a move to an emissions trading scheme a year earlier than expected.
They are expected to impact 325,000 people and have been criticised by auto producers.
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