The workshop are likely just trying it on. VW have been covering the full cost of warranty repair on these under goodwill due to the known issues with this engine. The dealer is probably just looking to make some extra money on the job by charging you as well as VW for the repairs.
Just tell them that you're aware that others have had the full repairs covered and why there's a difference in your case. If need be you can call VW and find out direct from them what they're covering. If you find out the dealer is charging both of you for the same repairs then I'd be taking the car to another dealer.
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push harder. Other people are getting it done for free.
Have a look at the ACCC website. It gives you all the information on what your statutory warranty rights are.
If VW aren't taking full responsibility for this known (and relatively common) problem then they are admitting that they expect the engine to fail at an early age.
VW market themselves as a maker of quality vehicles that are a cut above the competition. Are they admitting that an owner should expect a major engine failure just outside of the manufacturers warranty? When you bought the car did you expect the engine to be trouble free for 150k-200k km or were you thinking "it will probably fail really shortly"?
They will cover the whole repair - plenty of others on this forum have had their low compression issues fixed for free.
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