Dr THEOPHANOUS(3.38 p.m.) —I move:

That this House:

(1)   acknowledges the progress made by local car and component manufacturers and their labour force in achieving increased productivity, improved export performance and quality production to the benefit of Australian consumers;

(2)   expresses its concerns at the majority recommendations of the Industry Commission interim report on the automobile industry and especially the recommendation to reduce tariffs below 15%;

(3)   expresses its concerns that the Chairman of the Commission has chosen to publicly advocate this recommendation, while at the same time pretending that he will produce an objective final report;

(4)   expresses its firm belief that when all factors are taken into account (including Australia's obligations under the World Trade Organisation) the overwhelming national interest is for motor car tariffs to remain at 15% after the year 2000; and

(5)   is of the view that the reductions which have taken place in the tariffs to this point have not significantly cut the prices of motor cars for consumers and that to reduce tariffs below 15% will be tantamount to devastating the Australian automobile industry and destroying thousands of skilled jobs in regional Australia.

I gave notice of this motion on 11 February. It is interesting that there have been significant developments since it was put on the Notice Paper . In particular, I refer to the fact that the federal opposition and the shadow minister have chosen to take very significant action in relation to this matter which has been coming up.

When I speak on this issue, I do not speak as just an interested observer. I speak as the representative of the seat of Calwell, a seat which contains the Ford Motor Co.—one of the biggest employers and one of the biggest automobile companies in Australia. I keep in touch with the managing director and the officials at Ford. I must say that in my discussions with them I have been increasingly concerned about the trend which has occurred in relation to what may happen to the car industry if the recommendations of the Industry Commission were accepted. The reason that I decided to bring this matter before the House is that I and the majority of members on both sides of this House are very concerned about those recommendations.

One need not go into the ideological prejudices of the Industry Commission. Over a number of years, it has brought down reports which have been lacking in objectivity and have been based essentially on the presentation of one set of assumptions with respect to economic theory and the approach to the economy. Be that as it may, in this case we are not just talking about some theory. We are talking about the fate of thousands and thousands of Australian men and women who work in these industries, both in the main production plants and for component manufacturers.

As a result of the adoption of the car industry plans under the Labor government, we had a period of consolidation for this industry. The industry had to cope with significant and very large reductions in protection, in tariff levels, over a period of years and an increase in imports. Indeed, imports have increased from 1984, when they were 23.6 per cent of the total passenger market, to 43.8 per cent in 1995—nearly a doubling of imports; and that trend is continuing. Under those circumstances, we are in danger of losing our industries.

We were in danger anyway, to some degree, but the car companies decided to try to adjust to the new circumstances, to the idea that by the year 2000 there would be a reduction in tariffs to 15 per cent. Then what did we do? We have this report which basically says, `That is not enough. We will reduce them even further.' This additional reduction is critical because it will make it virtually impossible for many of these companies to viably continue to produce motor cars in Australia.

If that is the case—just as it has already suited some major multinational companies not to produce a single thing in Australia but to import the totality of their stock—we could have a situation in which some of our companies, including Ford, may at a given moment cut their losses and say, `Irrespective of the investment we made in Australia, it is clear that the Australian government does not support the motor car industry.'

When I say that we have to do something to freeze tariffs at the level of 15 per cent and that we should not go beyond that level at least until the year 2005—and, even then, only on the basis of an inquiry and an objective determination of all the factors—we get support for that view from an overwhelming proportion of Australians. Most Australians want to see a viable motor car industry in this country.

Those who argue in favour of further reductions say that there has been some benefit for consumers. The benefit for consumers has been minimal. There has not been a significant reduction in the cost of motor cars as a result of the increase in the level of imports and the increased competition from imports. It is true that there has been increasing efficiency in the Australian industry and, as a result of that, we have been able to produce and sell cars at a level which is increasingly competitive in international terms. But, nevertheless, when it comes to the crunch we have to think about balance.

The question of balance is a fundamental one which, unfortunately, the current government does not understand; that is, the balance between the national economic interests and the interests of international trade, the interests of the World Trade Organisation and the like. One clause in this motion says that to freeze tariffs at that particular level and to actually proceed along the lines similar to the motor car plan announced in the last few days by the federal opposition is not inconsistent with our obligations under the World Trade Organisation. Why do I say that? Because, as we have said, this matter has to be a question of looking at what we are doing and also looking at what other nations are doing, especially other nations in our region. You cannot go around saying, `Let's all have a free trade situation. Let's all reduce our tariffs,' when the only country that is actually doing a substantial amount in the car industry area is Australia.

We have done enough in this area. It is time for other countries to pull their weight. The Ford Motor Co., in its submission to the Industry Commission, had a table headed `APEC developments on market liberalisation'. The facts in this table are very valid. I seek the permission of the House to incorporate this table in Hansard.

Leave granted.

The table read as follows—

APEC DEVELOPMENTS ON MARKET LIBERALISATION

CHART 33

World Car Import Policies—1996

Dr THEOPHANOUS —What this shows is that many of these nations have huge protection rates. For example, Malaysia has 140 to 300 per cent, Indonesia has 125 to 200 per cent and China has 100 to 120 per cent. Plus, in certain cases, there are additional import licensing arrangements: even South Africa, 61 per cent; India, 50 per cent; Taiwan, 30 per cent; and the whole of Western Europe, 10 per cent—and so on. What we are looking at is a situation in which there is no justification for—(Time expired)

Mr DEPUTY SPEAKER (Mr Nehl) —Is the motion seconded?

Mr O'Connor —I second the motion and reserve my right to speak.