General Motors Australian unit Holden has been forced into in damage control after The Australian newspaper revealed a pay deal offering rises up to 22% and reported union leaders describing the income increases as "spectacular" and the "best deal yet" to be negotiated in the local automotive industry.

Ian Jones, the national secretary of the Australian Manufacturing Workers Union's vehicle division, told the paper the agreement contained no productivity trade-offs but GM Holden insisted the deal was "intelligently crafted" and contained productivity components.

Parliamentary opposition workplace relations spokesman Eric Abetz said taxpayers were entitled to ask whether firms such as Holden, which is negotiating a fresh government assistance package, were spending money wisely.

"When the trade union bosses boast that they've got huge wage rises without a productivity trade-off and they are well above CPI, taxpayers are entitled to ask whether they are getting value for money and whether the company is genuinely engaged in transforming itself to stand alone," he said.

"Given the huge job losses the car industry is facing, one is perplexed to understand how this wage increase could have been sought and justified, let alone granted. I would counsel the workforce to moderate the wage increases they are seeking to be more in line with community expectations and the capacity of the employer to pay."

The Australian said the three-year agreement involves a 3% wage increase for each year and a guaranteed "hardship recognition payment" of A$1,750 in the first year and $1,000 in the second and third years.

Workers will also receive a 2% "base wage variable bonus" in the first year, with similar increases potentially available in the subsequent two years.

Holden chairman and managing director Mike Devereux said the 3% rises in the base salary of workers were a "conservative and fair deal" given the consumer price index. He said the hardship payments were a one-off that compensated workers for the wages they lost during the global financial crisis.

Devereux said the 2% variable bonus was linked to the company's performance and "these things don't happen if the company doesn't perform".

"This is a very intelligently crafted deal that actually rewards the workers of Holden for the success of the company, but also protects our structural costs by not having them increased forever at fixed rates," he said.

Government workplace relations minister Bill Shorten told The Australian the outcome was a good deal because it contained "modest" base wage rises, payment for money forgone during the GFC and a potential bonus linked to the company meeting key performance indicators.

"[T]his Holden workforce [took] a pay cut during the GFC. They're getting modest pay increases."

Holden said earlier this month it would introduce a new single shift at its vehicle manufacturing plant in Elizabeth, South Australia and axe 100 temporary workers to boost productivity and help offset the high Australian dollar.