Mr MARTYN EVANS(5.55 p.m.) —The other industries which these bounties concern, and with which we have dealt this evening, are the IT and communications industries. We have seen the government admit the error of its ways in relation to the shipbuilding industry, a vital industry for Australia and particularly for some of our regional parts such as Tasmania and the east coast—shipbuilding is a very significant part of their work force. But the reality is that the IT and communications industries are an even more substantial part of Australian industry. Shipbuilding is important, books are important and the robot and machine tool bounties all have a significant role to play. Yet IT and communications is a multibillion dollar industry for Australia and, unfortunately, it is a multibillion dollar industry where we are losing the race in terms of our regional commitments.

Australia has a $7 billion trade deficit in IT and communications areas. Unfortunately, we import some $10 billion worth of IT and communications products every year. We export some $3 billion, leaving a $7 billion trade deficit in IT and communications. It is important that Australia does import substantial components of IT and communications because they are vital to productivity in the economy. They add enormously to the productivity of the manufacturing and services sectors and, of course, that will happen more so into the next century.

The reality is that 10 years ago we had a significant position in this industry. Labor built it up steadily through the bounties, through coordinated industry policy, through a whole range of activities, as the honourable member for Hotham (Mr Crean) has said, to a point where we were mounting substantial exports and where we did have a significant base on which to build. What has this govern ment done? It has attacked every component of the IT industry that it can find. It has broken an election promise; it has removed the bounty; this evening it is opposing again the Senate's attempts to restore that bounty and to force this government to maintain and honour its election promise.

Apart from that, this government seeks to attack the IT industry in the outsourcing areas. Outsourcing by the federal government will have a very significant and negative impact on the IT industry in this country. How will small and medium-sized enterprises in the IT industry maintain their contribution when overseas multinational companies take over the government's IT outsourcing and all of the componentry—all of the small manufacturing sector in this country that want to contribute through government purchasing to Australia's export in IT and communication services? How will those companies cope when multinationals are sourcing their componentry from overseas, where they, not the domestic industry, will dictate the standards and the level of commitment which those companies have?

The government purchasing component of IT is very substantial. By outsourcing that, you will destroy the very basis of the industry in this country. You have attacked it through the bounty, you are attacking it through outsourcing, and you have failed to illustrate the way in which you will gain any substantial savings from that IT outsourcing. The reality, if we look at the Intergraph example in Victoria, is a complete disaster, costing the government money and not saving it. If you look at the EDS example in South Australia, you can see that outsourcing to multinationals does not produce savings. Those savings are completely illusory and you lose all control over the industry. You lose all control over the supply of components; you lose all control over government purchasing and you will have no control over the privacy aspects of this important industry.

Government data is substantial. Government has a vast investment in personal data held on behalf of citizens in this country, and there is no way that the government will be able to maintain that once it has outsourced it. The reality is that the Bevis report of the industry, science and technology committee of this parliament, which was tabled a few years ago, illustrated the importance of government purchasing policy, particularly in maintaining IT and communications. The reality of this decision is that not only is the government attacking IT through removing the bounty, but it is also attacking IT through outsourcing and failing to maintain a coordinated industry policy which will allow government to make some real impact on the IT trade deficit. That is where this minister and this government have failed us; that is where the government's policy will not take us down any productive path. (Time expired)