THE $765 million a year spent by Canberra to subsidise the car and textile industries - and thousands of Victorian jobs - could be axed or scaled back under a Liberal government.
Shadow treasurer Joe Hockey has raised the prospect as a "serious" option in reshaping the economy.
He accused the Rudd Government of having "no appetite for hard reform".
The Federal Government spends nearly $650 million a year on car industry assistance schemes and about $115 million on textiles, clothing and footwear.
The bulk of the money underpins jobs and production in Victoria.
The car sector provides work for 88,000 Victorians (25,000 direct jobs and 63,000 indirect jobs) and is the state's biggest manufacturing industry.
About 40 per cent of the nation's textile jobs are in Victoria.
Asked if he supported a Productivity Commission suggestion to axe the subsidies, Mr Hockey said it needed to be looked at seriously.
"If you are going to improve productivity in Australia and if you are going to shape an economy that is destined to have a bountiful time with the Asian growth, then you need to look at all aspects of the economy," he said.
Industry Minister Kim Carr said Mr Hockey's comments should "send a collective shiver down the spines of the million workers and their families who depend on the motor and textile industries.
"This speculation about cuts ... undermines confidence and investment and has the potential to send industries offshore, costing Australian jobs."
