Toyota and Treasurer Joe Hockey are at odds over whether workers’ conditions and unions are to blame for the company deciding to pull out of car production in Australia in 2017.

As federal parliament sits for its second day this year, debate is raging in Canberra over who is to blame for the end of Australian car making.

Mr Hockey said he was told by Toyota Australia president Max Yasuda in December last year the company could continue if workers agreed to a new set of conditions.

“The fact is they were very concerned about the conditions that existed at Toyota in Australia,” he told Fairfax radio on Wednesday, adding that this included union “militancy”.

But the company has a different version of events.

“Toyota Australia has never blamed the union for its decision to close its manufacturing operations by the end of 2017, neither publicly or in private discussions with any stakeholders,” it said in a statement.

The treasurer gave the example of the Australian plant closing for 21 days over the Christmas period, just when the Middle East market was demanding cars.

Toyota had wanted the plant to close for just 10 days but the manufacturing union challenged it and won.

Toyota, in its initial statement about the closure, said the “cost of production” in Australia was a key factor.

Mr Hockey said the cost of production included excessive regulation, taxes and workers’ conditions.

“We all have to do the heavy lifting … and the militancy needs to be addressed by the unions themselves,” he said.

“We have got to compete with the rest of the world.”

Toyota Australia’s statement said there was no single reason for its decision.

Factors contributing to the decision included the unfavourable Australian dollar, high costs of manufacturing and low economies of scale for vehicle production and the local supplier base.

A further problem was increased competition due to free-trade agreements.

The treasurer said he did not agree with an estimate that 50,000 jobs would be lost in the automotive sector as a result of Ford, Holden and Toyota ending production over the next three years, saying it would be “significantly less than that”.

He ruled out tax breaks for regional areas affected by the shutdown.

However, Industry Minister Ian Macfarlane said the government would find money for industry restructuring.

“We are going to make sure that industry re-positions itself,” he told ABC radio.

“We will supply money for that to happen.”

Labor MP Amanda Rishworth said Toyota’s workers should not be blamed for the closure.

“These workers negotiated in good faith,” she told reporters in Canberra.

Ms Rishworth said the Fair Work industrial relations system struck the right balance.

The Australian Manufacturing Workers Union said the Toyota statement was a “blow to the government’s credibility”.

“It’s unfortunate that companies should have to continue to correct the government’s slander,” the union said in a statement.

“The government has to stop blaming workers for their policy failures.”