Mr SAWFORD(10.49 a.m.) —As far as manufacturing industry is concerned in this country, this is a government without a skerrick of vision and a government without any commitment whatsoever to manufacturing industry. This is a government that sets no positive outcomes for manufacturing industry. Really it is pretty appalling when you sum up the government's total lack of empathy for and response to manufacturing industry. The whole trinity is actually missing. There is no rationale, there is no process, and there are no positive outcomes. The government has gone missing, the minister has gone missing and, particularly, the backbench has gone missing. This is a government that has dumped on manufacturing industry and simply walked away from their responsibilities.

What greater evidence could you submit to support those propositions than the Bounty Legislation Amendment Bill 1996? This is a government made up of the same mind-set as the Fraser government which squandered opportunities for economic and employment growth from 1976 to 1983. This is a government that has learned precious little from the history of the past 50 years. A simple examination of any OECD country from the 1950s tells us that the gap between gross national product and employment is pretty much on a par.

But today there is a huge gap, when you look at the graphs, between GNP and the levels of employment. Albeit brief, any analysis of the last 50 years clearly shows the following trends in industry. Firstly, capital investment in real terms has quadrupled. Secondly, energy consumption has tripled and manufacturing output has tripled. But the real catch is that employment has only grown by one-third. The developed world has created a chronic and endemic employment problem of around 10 per cent and growing, whatever governments do with their figures.

Current economic orthodoxies will not solve the problem. Rather, they entrench unemployment at the unacceptable present levels. Traditional industries such as textiles and iron, steel and metals processing are all declining in employment, whilst electronics, telecommunications, information technology and biotechnology are growing, but not to the extent to take up the labour surplus.

We know the microelectronic industry has spawned whole new industries, but it has also, in a very frightening way, reduced the need for labour throughout the world. Throughout the industrialised world we are substituting capital, energy and increased output for human labour which is in surplus. Traditional economic growth is no longer accompanied by a commensurate increase in the number of jobs.

When it comes to the manufacturing industry, this government is simply not a player. It cannot cut the mustard; it is just not in the game. This government has forced the Minister for Industry, Science and Tourism (Mr Moore) to opt out of manufacturing industry. This government has forced the minister to basically wash his hands of, and walk away from, manufacturing industry.

It is much worse than that. As the shadow minister for has often pointed out in this House, it not just the axing of the bounties contained in this legislation which betrays the manufacturers of this country. There are also cuts in research and development, significant scaling back of the DIFF scheme, huge cuts to the export market development grants scheme, cuts to Austrade and cuts to AusIndustry. All up, that is about a $4 billion belt around the ears for manufacturing industry over the next four years. That cut of around $4 billion by way of industry support over four years is in the Howard government's first budget. No wonder the manufacturers in this country are a little shell-shocked and under siege from this government.

These decisions are driven by an ideological frenzy that fiscal consolidation will solve this nation's problems. It will not. Of course it will not. What will happen will be a loss of economic growth, a loss of jobs and a loss of exports. The signals are very clear. The quarry mentality is back. Value added, manufacturing producing jobs earning dollars from exports cannot get a look in.

When the coalition was last in government the number of manufacturing jobs in Australia dropped by eight per cent in one year. This happened in their last year in government. Now it will happen in the first four years, their first years in government. In the past the coalition did not understand manufacturing industry, and they do not understand it now.

By contrast, under Labor, manufacturing industry exports grew by a whopping 405 per cent. The No. 1 idea of the new government's policy for business and manufacturing is that the government should get out of the way. The government want no role in business or manufacturing and they appointed a can-do nothing minister to achieve exactly that.

The cabinet has frozen out this minister so that he is so perfunctory that his brain seems to be in deep freeze mode. The government wants to eliminate what it calls `business welfare'. The Treasurer (Mr Costello) has stood up in this parliament and called those manufacturers who have claimed the R&D tax concession `tax rorters' on more than one occasion. In fact, he seems to take special pleasure in the tax rorters claim. Research and development is cut.

A survey of 125 large and medium sized companies revealed that, as a direct result of the decision to cut R&D tax concessions, 34 per cent of companies were considering moving their R&D operations offshore, 57 per cent would reduce their research and development, and many more will now import the technology rather than conduct their own research and development. What a recipe for disaster. This bill axes four industry bounties despite promises to the contrary during the election campaign. It terminates the ships, books, machine tools and robotics bounties.

A couple of months ago I asked the Prime Minister (Mr Howard) whether he would refer to his cabinet unemployment committee the impact of the abolition of the book bounty on companies like Griffin Press in Adelaide, where 140 full- and part-time workers were given redundancy notices. It has to be said that he basically avoided giving a real answer in stating that the decisions cannot be disaggregated.

The book and publishing industry were operating on the understanding that the bounty would continue until the end of 1997. In fact, contracts, which in this industry operate from periods of up to five years, were entered into on that basis. This government has compromised the ability of this industry to make sensible business decisions.

Printing and publishing firms estimate that around 50 per cent of the 2,600 jobs in the industry could be at risk and lost. This is an industry that the book bounty encouraged to increase exports by over 200 per cent. Its premature abolition threatens export earnings, 1,300 jobs and 1,300 families. Opportunities for young Australians are diminished and, basically, it is just a kick in the teeth to the printing and the publishing industry.

The abolition of the ships bounty just defies commonsense. The government wants to cut the five per cent support for Australian shipbuilders of vessels, nearly all of which are exported. In the eight years since Labor introduced the bounty, the Australian shipbuilding industry has grown dramatically. It is a world leader in high-speed catamaran production. Production is up by 200 per cent. Exports are up by 150 per cent. Employment is up by 50 per cent. You would have thought that that is a very good recipe for growth, progress and jobs. But the government's response is to give it a belt around the ears. At five per cent support, Australia could more than compete with Norway, with a subsidy of 13.2 per cent, with Denmark, at 13 per cent, and with Italy, up to 25 per cent. But they cannot compete at zero per cent.

Has the government taken into account the fact that the so-called OECD agreement to end shipbuilding subsidies by the end of 1998 will not go ahead now because the USA will not sign up to it? Consistency certainly is no hallmark of this government. The government continued to support the ships capital grants scheme by funding $23 million to help companies like Shell and BHP import ships made in Holland, but it will not help Australian shipbuilders. For a saving of a measly $9 million to the budget, the abolition of the ships bounty cost one company $225 million in lost contracts. The company suffers. The employees suffer. The nation suffers.

In addition to the abolition of the book and shipbuilding bounties, the government has terminated the machine tools and robotics bounties and will abolish the computer bounty on 1 July next year. That the computer bounty abolition is to be delayed raises some very interesting possibilities. Is it not the case that the minister has considerable interest in companies that claim the computer bounty?

But the impact from this legislation is far greater than books, shipbuilding, machine tools, robotics and computers. It sends a chilling reminder to manufacturing industry, the steel industry—and we are setting up a steel committee—the car industry, the pharmaceutical industry, the plastics industry, the automotive supplier industry, and you could go on and on, that this government simply does not seem to give a damn about them. It is going to hang them out to dry and simply let the market rip.

The signals are clear from this legislation that not only will existing manufacturing industry be affected—the ones that improved exports by over 400 per cent under Labor and which secured economic and employment growth directly assisting the battling families this government so fraudulently purports to represent—but it has been a complete vacuum, an empty void, as to what the future holds for industry policy. Where is the government providing leadership to the future enhancement of job growth?

Take a simple move to solar energy: that would create jobs. The production of solar collectors for space and water heating includes glass or plastic for the covers, copper, aluminium and steel for the frames and absorber plates, and fibreglass, rigid foam or the wool stockpile for the insulation. All of these are established industries, many working below capacity. The occupations include sheet metal workers, carpenters, plumbers, pipe fitters and construction workers, many working in regional areas.

Simply raising the goal of the current five to six per cent of homes with solar heating to 25 per cent—and this has been done in a study by the Australia New Zealand Solar Society—would create 25,000 jobs nationwide, without importing anything. Solar potential in this country remains largely unfulfilled. Incentives are required not only for research and development but also for the manufacturing and marketing on a large scale to make it cost efficient. This country has the potential to be the world leader in and a major exporter of manufactured solar thermal technology.

Take another area, weatherisation—energy efficient housing. For every $1 million spent in that area, you get 80 jobs. Again, Australia has the potential to be a world leader.

What about public infrastructure? In this country you just want to pull your hair out at the idiocy of transport policies from state and federal governments over the last 30 or 40 years. A German study shows that, when you spend $1 billion on road construction, you create around 10,000 to 14,000 jobs. But if you spent that same $1 billion on heavy rail, you get 22,000 jobs—and we are talking about permanent jobs. If you spend it on light rail, you get 23,000 jobs for the same expenditure—around double the jobs you would get for anything on road construction.

Every year in Australia the cost—`subsidy' is more correct—for road transport is well in excess of $10 billion. In fact, I think it is more like double that. That is $5 billion we spend on the actual road building and maintenance and $5 billion on the result of road trauma, and goodness knows how much on compensation claims and associated legal costs. Little thought appears to be given to the size of this subsidy for road transport. A country rail line loses $20 million or $30 million and everybody goes feral in this country, but they never apply the same rules to the building of roads.

Subsidies for light and heavy rail, as we all know, are not so kindly treated. That does not make sense. It is dumb. It is stupid. A balance is required between all forms of transport. Unlike road building, which imports the road making and the road maintenance equipment and the majority of vehicles that travel upon roads, investment development in heavy and light rail could be 100 per cent Australian—materials, design, manufactured, marketed, exported.

We live in an area of the world where many cities in South-East Asia have enormous urban transport problems. Enormous potential exists for the export of cost efficient urban transport systems in our region. I think the Hong Kong light rail system was planned and marketed in Melbourne. It is not only Sydney, Brisbane and Adelaide; it is Taipei, Bangkok, Ho Chi Minh City, et cetera.

The fundamental role of any economy is to provide jobs. That is the role of government, and governments around the world are just running away from that responsibility. They replace public good with private good. They replace moral good with a principle of user pays.

The second principle is that there be a fair distribution of income among its citizens. For that to occur, governments need to lead. They need to be proactive. They need not to opt out of their responsibilities because they do not have the guts to raise the necessary revenue to meet the expectations of citizens.

There is a belief around the Western world that corporations and business will deliver full employment. What absolute rot! How can people think so stupidly? It is the role of government that will look after families. Why would a corporation—a big business or a small business—take on the responsibility of the citizens of a country? That is just absolute nonsense. Why would they? Of course, they would not. They do not have the long-term responsibility for stability in families that governments have.

Governments—this government and governments in other parts of the developed world—are moving away at a rate of knots from the commitments and the social contracts that governments should have with battling workers. This legislation is yet another example of the abandonment of public good and the moral contract governments should have with their citizens.

It is interesting to note that the leaders of government and the leaders of industry around the world in the 1950s and 1960s went through school in the 1930s and the Depression. Many of these people, highly skilled people, waited sometimes three or four years before they got a job. They went through the Second World War, the Korean War and the Cold War, but they believed in the responsibility and were acutely aware of unemployment.

Today, the leaders of government, our own generation, and the leaders of business have come from an era of full employment due to the efforts of that previous generation. The sensitivity and the edge for jobs is simply not here. It is something we need to rediscover. It is something that this government should rediscover. If it does rediscover this, then the government may have the courage to lead. We might then have ministers on the front bench over there who have the courage to lead.

If the government cannot do that and if governments around the world cannot follow their own advice and do not get out of the way, electorates in this country and many other countries in the developed world will very quickly change government in the next 10 years, because the expectations of their citizens are high. So they should be. If governments walk away from their responsibilities, as shown in the Bounty Amendment Bill 1996, they will act at the ballot box far more quickly than people imagine.