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Thursday, 7 November 1996
Page: 6805

Mr CADMAN(1.00 p.m.) —There is absolutely no way the amendment to the Bounty Legislation Amendment Bill 1996 moved by the previous speaker, the member for Hotham (Mr Crean), should be agreed to by this House. He is proposing a continuation of policies that brought about deplorable results in Australia. Let the shadow minister be aware that, despite the high growth economies in Asia, which are a wonderful opportunity for marketing manufactured goods—they are in the biggest demand—the policy that he is advancing meant that Australia's share of manufactured goods imported into the Asian region declined from 2.8 per cent in 1982 to 1.7 per cent in 1992.

So much for the policies of the Labor Party. They have been proved a failure and they have been voted a failure by the Australian people. Despite the subsidies, the payouts, the unbalanced budgets and all of the other paraphernalia of the Australian Labor Party's administration, their policies are a notorious failure. We are a declining influence, under their policies, in Asia—the fastest growing market for Australian manufacturers anywhere in the world. In fact, we were so successful under the policies of the Labor Party that our share of the Asian market in manufactured goods actually declined. It fell by almost 50 per cent.

In spite of growing opportunities in the world market, Labor has failed to improve international perceptions of our investment climate. The recent Bureau of Industry Economics survey has shown that the majority of business executives in Japan, the United Kingdom and the United States do not consider themselves well informed about Australia's business environment and had negative perceptions of Australian macro-economic policy performance and the government's attitude to foreign investment.

That is the sort of climate the Labor Party created nationally and internationally, and they are trying to have this government follow the same policies that proved to be such a failure. It is like a household which is heavily mortgaged, with their furniture on hire purchase, and somebody claims that they should buy a new car and go further into debt in order to get to work faster. That sort of economic folly is something that the Labor Party has to move away from if they are going to gain any credibility with the Australian people.

I would remind the House that the policies of the Australian Labor Party in manufacturing industries and across the board have created record increases in taxation. They have produced record unemployment and record overseas debt at a time when the world economy was booming and at the very time when reasonable or moderate policies would have produced much better results for the Australian people and the Australian manufacturing industries. All of those policies proved a failure. It is no good pointing to one or two instances of sprinkling money out through a bounty process and saying that has been successful. If the nation is going broke and unemployment is skyrocketing, you cannot point back to that historic so-called benefit and say, `If continued, ultimately it will succeed.' That is just a failure syndrome that the Australian Labor Party has to move away from.

In 1983, there was a $7.7 billion manufacturing trade deficit. That blew out to $27.5 billion in 1995. That is how well the Labor Party is going with some of these policies of bounties and subsidies. They have not got the basics right in the Australian economy, they have not got the challenge there for people to expect that they are going to make profits and to expand their businesses. The raw figures show that from 1983 through to 1995 there was a quadrupling of the manufacturing deficit in trade. So you cannot claim that you were succeeding if that is what the results of your policies were. You cannot claim that the nation needs to go back to those failed policies in order to succeed. They have been demonstrated to be a failure. Imports now account for 35 per cent of the sales of manufactured goods, and that is up from 24 per cent in the early 1980s. So in fact you worsened our current account deficit. That is what your policy has done.

This government has been in office for a short eight months; you had 13 years to make changes. The historic effort of those 13 years of work has proved to be a failure. We are importing more; we are exporting less; the share of the market has decreased; we had massive unemployment; we have a huge foreign debt. And the former minister Crean, leader of the union movement, comes in here saying that we ought to continue the policies of the Australian Labor Party. How stupid. Why would anybody want to do that? A demonstrated failure repeated over and over and over again. It seems wrong.

He started quoting people who have been affected by the removal of this bounty. No sensible government would want to remove a benefit and damage people's businesses. We have tried to make an interim arrangement for the industry so that the pain is lessened. But no government in its right mind would take these decisions if it did not think there was a long-term benefit for the Australian people and the Australian manufacturing industries.

I refer the shadow minister and the House to some of the evidence given before the Senate committee. One of the firms that he quoted was Mimosa Publications. After exploring all of the bounty issue, Ms Donovan, who was giving evidence on behalf of that firm, said:

I think the disadvantage is not so much tariffs, or the advantageous bounties, it is more the tyranny of distance. Our freight costs of getting materials to markets are high. The time difference is also a problem. If you are shipping books to America, you are looking at a minimum of six weeks. I think that the distance hurts us more.

And Senator Murray said:

More than the price?

And Ms Donovan said:

Plus all the holiday pay, sick pay and those sorts of things. But certainly, in terms of competing with Americans, the distance that we have to ship goods is really a major hurdle.

Small business and business at large are saying, `These assistance programs are part of it, but they are a minor part,' and Ms Donovan from Mimosa Publications, affected by the bounty decision, is saying that it is all the industrial relations claptrap that we have to put up with; it is all the red tape we must deal with; it is the taxes and the lead in the saddlebags that is far more significant to us than any small advantage that we may receive from a bounty scheme.

So that is why the government has made the decision: it wants to get the basics of the Australian economy right; it wants to get people aware that there are $9 billion or $10 billion worth of outgoings each budget just to keep level with the repayments on our huge foreign debt.

Our outgoings in the budget up until now have been about equivalent to our total payment for education or defence just to repay the debt that the Australian Labor Party has run up. And they want to continue these policies for an indefinite period and say that, ultimately, Australia will succeed when the policies have been proven, time and again, to be a failure. That is not the real world and the Australian people do not believe that.

The shadow minister made such a disappointing speech when he was in the House; a speech which showed that he had not learned anything new. He had no new proposals; he had some rhetoric about this as `what if' and `maybe' sort of stuff. It was just a continuation of what we have heard in the past. If he is going to make a real contribution in this parliament, and I know that it is his fierce ambition to make a very significant contribution in this parliament, then the shadow minister will need to come back to some real innovation in his thinking and move away from those failed policies of the past, because regurgitating that stuff will not convince anybody.

Ultimately, it will not convince the Mimosa presses or the Ms Donovans or the Bert Evans or anybody else because they know the real problems of this nation are substantially more than whether or not they receive a bounty.

The Australian government has made this decision. I would like to run through, for the benefit of the House, the various areas where the computer bounty, the books bounty, the machine tools and robots bounty and the shipbuilding bounty have been changed because it is not as gross as presented by the shadow minister. It is not as difficult as presented by some of the firms that appeared before the Senate committee. It is a change, but change was in the wind and it had been flagged by both the previous government and the Industry Commission.

The Industry Commission reviewed the computer industry and reported in June 1995, a little over a year ago. The Industry Commission recommend the bounty be allowed to expire in December 1995. It recommended that the bounty be allowed to run for a few months further. According to the Industry Commission, its recommendation to the government was that the bounty be allowed to expire at the end of last year. However, the then government subsequently introduced legislation to extend the bounty to the year 2000.

The opposition of the day agreed with that and, regrettably, we included a continuation of that bounty in our policy. However, we have changed our policy in regard to bounties. Nobody likes doing that to the bounty in regard to computers. It is a shame that that has had to occur but one must look at the total picture and the total goals of the government. This government, on finding it had responsibility for a $10 billion black hole in the budget that it was not expecting to find—although it was prepared to accept the responsibility and fix it—had to make some hard decisions, and it did make some hard decisions. Unfortunately, the computer bounty has to be terminated and the budget will terminate it on 30 June 1997. It has a few more months to run. It runs, I would point out to the House, far beyond the recommendation of the Industry Commission.

As for the books bounty, the draft Industry Commission report released in August this year recommended that the bounty be allowed to lapse when the current scheme terminates in December 1997. However the book bounty is to be ended about one year prior to that recommendation.

With the machine tools and robots bounty, the draft Industry Commission report recommends the scheme be allowed to lapse when the current scheme terminates on 30 June 1997. The budget terminates that bounty in August 1996, a year early.

As for the shipbuilding bounty, the Bureau of Industry Economics reviewed the bounty in early 1995. The Bureau of Industry Economics concluded the Australian shipbuilding industry had matured and no longer required direct support. The bounty was due to be terminated on 30 June 1997 but this legislation will terminate the bounty on 20 August 1996. There is a shortening of the term of the bounty. It would be impossible to say that is not the case.

However, when one looks at all the reports and the previous government's attitude towards the payment of bounties, one would have to say that the writing was on the wall. The writing was on the wall for these industries and they should have been making some sort of changes. If they were not making some sort of plans to take into account that there was going to be a termination of the bounties then that would have been most foolish. It would have been dreadfully short-sighted management.

The bounties were never considered to be an infinite source of assistance. The former government industry minister, Alan Griffiths, said on Lateline in April 1993 in response to a question about the continuation of government assistance to industry:

. . . there'll be opportunities for government to assist, to offer assistance during that nurturing phase, but of course, taking the shipbuilding example, government involvement there will be temporary.

That was a warning issued by a previous minister in the Labor government three years ago. The shipbuilding industry was aware of that government's intention to terminate the bounty process. It is no good coming in here crying crocodile tears that it should have continued because the industry was on notice. It knew that this was a temporary arrangement and it should have been aware of that and been making plans, and I believe that many in the industry were doing so.

The Liberal government has taken additional measures to ensure that Australian industries are prepared for the challenges ahead. In relation to shipbuilding and books, there are generous transitional arrangements. In the case of computers the government has convened the Information Industries Taskforce to consider whether and in what form assistance might be required in the future.

That task force has been established. I have reams of press releases from the minister about it, what it is going to do, what its terms of reference are and everything else. Yet there was not a word from the previous speaker about whether that task force had appropriate terms of reference or whether it would meet the objectives of the industry. The member for Hotham just gave that the flick and said, `That doesn't count at all.'

Unlike Labor, this government does not advocate unproductive handouts to industry. The government is committed to providing meaningful policy support and assistance to Australian industry. Our commitment is real because we know where the problems are. We know that the policies of the previous government failed time and time again. Under the Minister for Small Business and Consumer Affairs (Mr Prosser), a report has been released regarding the deregulation of small businesses and business at large to see how they can be assisted by the government.

Business people made a number of claims. They wanted fringe benefits tax to be cleaned up and something to be done with that. They wanted red tape to be changed. They wanted the reform agenda to be pushed ahead by this government. This group, which was established by the Minister for Small Business and Consumer Affairs and which reported to the Prime Minister (Mr Howard), was looking at the deregulation of business. It reported that business people would prefer to have an optional pay-as-you-go voluntary payment system of taxation. They wanted easier ways to handle paperwork.

They provided a series of very solid and practical recommendations concerning the conduct of the Australian Taxation Office. They commented on sales tax, the Income Tax Assessment Act and how it worked, and payroll tax. They also had a lot of things to say about industrial relations and employment issues.

These issues have even been mentioned in the Senate Economics Legislation Committee in the last few days by people who are claimed by the Australian Labor Party to be most strongly opposed to the removal of the bounty. Those people have said to the committee, `The real issues are not bounties.' These are the issues identified by the Small Business Deregulation Task Force. These are the matters that are of significance to Australian businesses.

The Labor Party comes in here crying crocodile tears about what should or should not happen. I would like to remind the House that the Keating government spent $165 million on the new Department of Foreign Affairs building down the road. Businesses in Australia are really happy that public servants in the elite Department of Foreign Affairs are better housed than they were previously. Some $394,000 was spent on a fountain there. Some $88 million was spent on housing for surplus staff in Canberra and $994,000 was spent on a ladder to get into buildings occupied by terrorists.

I have a list of examples as long as your arm. Millions and millions of dollars have been wasted, including the subsidies paid to musicians in the union movement so the Labor Party could claim a donation from those same unions coming into the election campaign. What a dreadful way to use taxpayers' money. Then the Labor Party people come in here crying crocodile tears and saying, `It's a pity you cut this bounty off.'

Australia has greater priorities than this. This government is prepared to make the hard decisions. The minister at the table knows industry. He is gifted with vision for and understanding of Australia's manufacturing industry. He is applauded in every factory into which he goes, both by the workers and the management. I know that he will lead the manufacturing industry out of the morass of failure in which the Australian Labor Party left it when Labor was forced from office on 2 March 1996.