A blame game has erupted over the demise of Toyota in the first sitting day of federal parliament for the year.

Prime Minister Tony Abbott insists there’s nothing the government could have done to save Toyota but he is not in the business of preserving industries.

Toyota will shut its Victorian car and engine-making facilities in 2017, shedding about 2500 direct jobs and impacting on thousands more jobs in the auto sector supply chain.

Mr Abbott told the first session of parliament for 2014 he had met with Toyota executives on Monday night and assured them the government could provide assistance at the same level as it had in the past.

“Their decision was final,” he said.

Victorian Premier Denis Napthine – who met with Toyota executives and workers on Tuesday – also said the company had made it clear the decision was irreversible.

The prime minister fended off a Labor censure motion over the government’s inaction to save not only Toyota but other manufacturers who had announced closure or job shedding in recent months.

The challenge for the government and the parliament was not to “preserve every single business indefinitely”.

“It’s to create the conditions to transition from good jobs to better jobs,” Mr Abbott said.

Opposition Leader Bill Shorten told parliament the government could have avoided Toyota’s closure by acting to support Holden late last year and preventing a ripple effect through the automotive chain.

“The Australian people will mark you down for the death of the car industry because we hold you responsible,” he told Mr Abbott.

The prime minister said the cost of producing cars in Australia was too high for Toyota to continue its operations and Labor’s restrictive workplace laws exacerbated the problem.

“I can understand why the leader of the opposition wants to sheet all of this home to a government which has been in power for less than six months as opposed to a (Labor) government that was in power for six years,” Mr Abbott said.

Dr Napthine, who met with Mr Abbott and Treasurer Joe Hockey in Canberra, said he had put forward a list of potential road, rail and defence projects to create new jobs – including some projects rejected by the coalition at the 2013 federal election.

“As far as the Victorian government is concerned they are all still on the table,” Dr Napthine said.

Australian Industry Group chief Innes Willox said the closure of Toyota would impact on about 3000 related businesses and “rip holes out of our industrial fabric”.

Mr Willox said that while the government was talking about an end to the “age of entitlement”, it needed to do more work in the area of skills, export assistance, innovation, research and development.

“There is a role for government to play here,” he said.

South Australian Premier Jay Weatherill, whose state also relies on auto sector jobs, said the federal government’s complacency would cost taxpayers.

“It is much more costly to seek to build a manufacturing industry from the ashes, from one that has disappeared, than to transition one which already exists,” he said.