Mr STEPHEN SMITH(3.38 p.m.) —by leave—Whatever the Minister for Trade (Mr Tim Fischer) says about the trade outlook, the outlook for jobs is bad. Whatever Tim says about the trade outlook, the unemployment outlook is bad. That is the first thing that needs to be said about this trade statement.

The second thing that needs to be said about this statement is that it is a collection of grandiose motherhood. It is breathtakingly banal in its content. It is much more notable for what it leaves out than for what it includes. I am surprised, Tim. You are normally so polite, so courteous and so sticking to the forms, but nowhere can I see a paragraph that refers to the good work of Bob McMullan or the previous administration, much of which you are simply continuing. But the key point is that, whatever you say about the trade outlook, the unemployment outlook is bad.

The minister makes great play of satisfying an election commitment. He refers to it as a core commitment. He does not refer to any of the `non-core commitments' that the government has broken in the trade area since it came to office. He makes great play that this is somehow new and accountable and open trade making policy. It is, of course, the case that the previous minister and ministers before him, including Bob McMullan, produced material of similar descriptions but just did not wrap it up with the grandiose format of a ministerial statement. The last time Bob McMullan—

Mr DEPUTY SPEAKER (Mr Nehl) —The member for Canberra.

Mr STEPHEN SMITH —The last time the member for Canberra, then a senator, Bob McMullan, released a trade outlook statement, he made the following point in his foreword:

Importantly, this outcome represents a fundamental achievement in securing the Government's commitment to reducing unemployment to 5 per cent of the labour force by the year 2000.

In the first of the foreword of the statement he has just tabled, the minister refers to `our capacity to create new jobs'. In the executive summary on page 1 he says:

Australia's trade policy aims to create jobs by increasing the sustainable rate of economic growth.

Nowhere do we find the commitment to a target or the commitment to reducing unemployment, which this government has assiduously refused to attach itself to since it came to office. The opening paragraph of chapter 1 of the report that the minister has tabled says:

Australia's net export performance is continuing to make a strong contribution to the overall level of growth in the Australian economy.

It is more notable by what is left out than by what is left in. What he does not tell us is that last year's budget papers forecast that the net export contribution to growth in GDP for 1996-97 would be negative three-quarters of a per cent. In the Mid-year economic and fiscal outlook 1996-97 , released last week by the Treasurer (Mr Costello), we find that that forecast has been revised to a negative one-quarter per cent as a result of the impact of imports, not exports.

The opening line of chapter 1 of the report that the minister has just tabled says that Australia's net export performance is continuing to make a strong contribution. He does not say that that contribution is negative. So far as the labour market and employment are concerned, in table 4 on page 6 of the fiscal outlook document released by the Treasurer in the last few days, we find that the revised forecast for employment—on the labour force survey basis—was unchanged at 1½ per cent. We find that the participation rate was un changed at 63¾ per cent, but we find that the unemployment rate increased from the budget forecast of 8¼ to 8½ per cent. We also find in the same table that the budget forecast for a contribution of net exports to growth in GDP is minus three-quarters of a per cent with a revised forecast of minus one-quarter per cent. In accompanying text, we find variously at pages 4 and 5 the following comments:

The labour market is expected to improve but only at a pace sufficient to generate a gradual decline in the unemployment rate. Achieving faster reductions in unemployment will be dependent upon opportunities taken to adopt more flexible arrangements in the labour market.

That is their only suggested solution to unemployment. But when we come to the contribution that net exports make to GDP, on page 4 we find a reference to the financial years 1996-97 and 1997-98 and the comment:

Net exports are expected to detract slightly from growth in both years . . .

So not only do we find under this regime net export contribution to growth in GDP, a budget forecast for 1996-97 of minus three-quarters of a per cent, down a positive one per cent under the previous budget papers, revised to minus one-quarter per cent for 1996-97, we also find the mid-year fiscal report saying that exports are expected to detract slightly from growth, not just in 1996-97 but in 1997-98 as well.

The first line of the report that the minister has tabled is absolutely notable by what it does not tell you. It says that Australia's so-called net export performance is continuing to make a strong contribution to the overall level of growth in the Australian economy. That is negative and it is forecast to be negative under the Treasurer's own work for 1996-97 and 1997-98.

In that context, what has this government done in the trade area since it came to office? Let us have a look at its performance and the litany of sins. Firstly, we have seen—this is not referred to in any way other than by code in the report—the gutting of trade and export enhancement measures, most of them in breach of election commitments. We have seen the slashing of EMDG by $426 million over four years, capped at $150 million per year, but that capping including the cost of administration. So the real amount available to Australian exporters is about $142½ million.

We have also seen Austrade slashed, again in breach of an election commitment. In the documents tabled by the then shadow Treasurer in the run-up to the last election campaign, the commitment on the part of the coalition, then in opposition, was to cut no more than $58.6 million out of EMDG and Austrade combined. They have taken $426 million out of EMDG over four years and $90 million recurrent out of Austrade.

In addition, the government gave an absolute commitment to continue such programs as ITES, the international trade enhancement scheme. That has been abolished. What have we seen in the industry area? We have seen the Prime Minister (Mr Howard) refer to industry policy as quite peripheral and minimal. In the industry support and enhancement measures since the government came to office, we have seen the gutting of research and development by $2 billion, the effective abolition of things such as the shipbuilding bounty, shipbuilding now being an exclusive export industry in Australia, the effective abolition of the book bounty and now worry about factor F.

In addition we have seen the litany of foreign affairs, trade and industry debacles. This is not an administration that can walk and chew gum at the same time. A range of things have adversely affected our economic performance, our social standing and our trade and industry performance. We have seen the DIFF debacle—no mention of it here. There has been a deafening silence from the Prime Minister on the issue of race and the adverse consequences that that has had for our standing internationally and our future trade performance.

We have seen the involvement of the Minister for Foreign Affairs (Mr Downer) in the European Union debacle over human rights. No wonder Europe is one of the trade areas that the minister has put off until next year. We have also had a deafening silence from the Minister for Trade in the run-up to APEC and the World Trade Organisation meetings. We have seen the effective blowing up of his so-called aggressive bilateralism, none of which we see here, through the Howe Leather debacle. We have also seen the combined consequences of the activities of the Minister for Foreign Affairs, the Minister for Primary Industries and Energy (Mr Anderson) and the Minister for Trade so far as our relations with China are concerned.

In addition, what we have seen from the minister for primary industries was made breathtakingly apparent by the release yesterday of ABARE commodity prices. In January we heard the minister for primary industries say that we need to go back to an area of exports that this country left behind over 10 years ago. An article headed `Anderson backs focus on raw material exports' states:

Australia should focus more on improving its exports of raw materials than developing processing industries, according to the Minister for Primary Industries, Mr Anderson.

Minister Anderson, in his lame answer to the House today, effectively refused to say that that was not his position. Why is that juxtaposition of events important? When one looks at some of the detail of the paper that the minister has tabled, one finds at page 25 a section headed `The Composition of World and Australian Trade' together with a table, figure 4.8, and the following summation:

The importance of manufactures and services in international trade is increasing. Australia's export composition has changed in line with this global trend . . . Indeed, Australia's move towards manufactures and services exports has been more rapid than that in the rest of the world.

When we look at the composition of Australia's trade and international trade, we see what has happened during the period from 1980 to 1995. There has been a reduced level of international trade in agriculture and a substantially increased level of manufactures.

So what does that mean? It means that, if Australia is to take the maximum benefit from trade liberalisation, we need to ensure that we are in there with the value added, the elaborately transformed, manufactures. It is not sufficient for the minister for primary industries to try to take us back to a complete dependency on primary commodities and place us at risk, as we have been historically, from the effect of commodity prices.

Mr Tanner —Back to the 1850s.

Mr STEPHEN SMITH —That is right. If you want to proceed along those lines, then you do so at your own peril. Yesterday's ABARE outlook brings home the importance of Australia improving its production of elaborately transformed manufactures and value added items in order to keep Australian exports growing. If you want to do that, you need a good dose of support for Australian industry, a good dose of support for Australian research and development, and a good dose of support for Australian exporters—none of which we see in this document and none of which we have seen from the government since it came to office. Indeed, we have seen quite the reverse.

I chided the Minister for Trade for not giving the member for Canberra due credit for the work that he has done. We find in the executive summary on page 1 of the report some of the highlights. It states:

Over the past year some notable wins for Australian business have been scored on the trade front. These will contribute to creating jobs in Australia and raising living standards, now and in the future. Highlights include: a substantial bilateral market access package with Taiwan as part of its accession to the World Trade Organisation (WTO)—

started by Bob McMullan—

a big cut in Mexican tariffs on wool—

effectively started and concluded by Bob McMullan—

. . . the development of a first package of Individual Action Plans by all APEC economies—

thank you very much previous government—

. . . the conclusion of the recent WTO Ministerial Conference in Singapore—

thank you very much previous government for taking the lead in APEC and WTO.

I would like to briefly speak about the big cut in Mexican tariffs on wool, because I think this very nicely demonstrates the juxtaposition between the attitude of the minister for primary industries in his attempt to drag us back to commodities and the failure of the Minister for Trade to fess up to the fact that very much of what we find in the statement was done by or was a continuation of the work done by the previous government.

On 15 January the Minister for Trade and the Minister for Primary Industries and Energy issued a joint press release headed `Australia welcomes cut in Mexican wool tariffs'. It stated:

Mexico's decision to eliminate wool tops, noils, and waste demonstrates the effectiveness of the Australian Government's strategy of carefully targeted bilateral trade representations, the Deputy Prime Minister and Minister for Trade, Tim Fischer, said today.

I go back to a joint press release issued on 10 January 1996, just over a year ago, by Senator Bob McMullan, then the Minister for Trade, and Senator Bob Collins, then the Minister for Primary Industries and Energy. They said:

The Australian Government's strategy to increase the value added to Australia's primary products before they are exported received a major boost today with Mexico's decision to eliminate tariffs on processed wool, the Minister for Trade, Senator Bob McMullan, and the Minister for Primary Industries and Energy, Senator Bob Collins, said today.

Australian wool growers and processors stand to benefit greatly from Mexico's decision to remove tariffs on wool tops and scoured and carbonised wool, the Ministers said.

"This breakthrough is yet another successful outcome of the Government's program of carefully researched and targeted bilateral trade activities on behalf of Australian exporters.

Two points should be made here. The Minister for Trade's joint press release with the Minister for Primary Industries and Energy of a month ago referred to `carefully targeted bilateral trade representations'. They cannot even change the press releases. More importantly, any reference to `value added' has been deleted. Why? Because, as we know, the minister for primary industries is not handcuffed to valued adding. He is handcuffed to the days where Australia was left to the risks of commodity prices.

Today we see headlines such as `Bleak outlook for rural industry' and `Low prices kill rural recovery'. Even Black Jack McEwen in his own way believed that it was possible to have commodity exports in primary and mineral resources while at the same time having a manufacturing capacity. He had different ways of sustaining a manufacturing capacity, but he actually believed that you could do the two things at the same time. That is not what the Minister for Primary Industries and Energy said to the Weekend Australian.

I want to very quickly touch upon a couple of other items in the report which the minister has tabled. On page 41 we find some glorious code. Under the headings `Trade Promotion' and `Austrade's role' it says:

Specific initiatives included:

.   refocusing and simplifying the Export Market Development Grants scheme and providing the tourism industry with full rate access to grants . . .

`Refocusing and simplifying the EMDG' is code for gutting it by $426 million over four years. It goes on to say:

.   the requirement that Austrade more actively promote an export culture in Australia.

They do not tell you that Austrade is expected to do that with $90 million less per year. There is a final point that I want to make in relation to Australia being an aggressive multilateral trading country. If we are to take the full benefit of trade liberalisation, we need to do a couple of things. Firstly, we need to be aggressive multilateralists so far as the obligations on our trading partners are concerned. Secondly, we need to absolutely maximise our industrial development capacity to take advantage of the market that is there and growing for elaborately transformed manufactures.

So far as being an aggressive multilateral country is concerned, I complimented the Minister for Trade in recent days when he announced that he was proposing to commence WTO dispute resolution procedures against Hungary. I said, by way of press release, that I hoped this was the start of an equivalent to the American approach of a coherent enforcement trade strategy articulated by acting trade representative Barshefsky. Unfortunately, when we look at these documents, it appears to be the case that Hungary, rather than being the tip, is the iceberg.

So if we want to maximise our position, we have to do all the things that are not contained in this particular statement. We have to see a good dose of support for Australian industry, a good dose of support for research and development, a good dose of support for Australian exporters and a good dose of aggressive multilateralism—none of which we have seen from this government to date and none of which we see in this particular statement.