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Wednesday, 1 November 2000
Page: 21905

Mr HATTON (6:52 PM) —To paraphrase a great President of the United States, who was a candidate in the 1992 elections, `It is the economy, Stupid.' In this debate, we could say, `It's the knowledge economy, Stupid.' What we see before us in this cognate debate on the bills concerning the Australian Research Council is a lack of vision and innovation and a government lacking the touch for what Australia needs in future R&D development and support. Instead, we have the Australian Research Council Bill 2000, which goes a very small part of the way to redressing some of the massive damage that has been done to research and development in Australia since 1996. The core of my concerns in relation to this bill goes to the changes that the minister has made to the relationship between the minister and the Australian Research Council. Instead of there being a position where those who know best how to allocate funds for research in science, engineering and technology are trusted to do their job, this minister does not now trust them to do that. Previously, the National Board of Employment, Education and Training were trusted to use their expertise and scientific understanding and to use the peer review mechanisms to best distribute research funds to the most competitive research programs in universities Australia wide. In this bill, we see a series of mechanisms where the minister can actually determine the outcomes of the funding process and can completely and utterly disregard the advice that he is given by the Australian Research Council.

This is a bill in which the past modalities between ministers and the organisation, which entrusted them to make clear, concise and proper funding decisions, have been utterly turned around. This is very dangerous. This comes from a minister who is really ideologically driven, who has sought day after day to harangue not only the opposition but also the country at large from a very narrowly focused basis. It is a dangerous approach because it takes it out of the hands of a reference group which does not have a vested interest in the outcome, a reference group that we should be able to trust to do the job they have been asked to do in the past, and it puts it in the hands of the minister. I intend to go into that in detail tomorrow in the last part of my speech. At this point, I would like to open up some general considerations. `It really is the knowledge economy, Stupid.'

At the start of this century—we are still in the 20th century, which will not finish until 31 December this year—Australia and Argentina were at the very top of the ranking in per capita income and in quality of living. That was primarily because we could get a great deal in other countries for the commodities we produced—wool, wheat, coal, and so on. We had more than a century before that for the development of those industries. Despite the fact that they are primary industries, they were built only by innovation and research and development. They were made strong only because people like Farrer went out and did the work, developing different forms of Australian wheat, drought tolerant wheat which was resistant to rust—drought and rust are our two chief problems in Australia. The quality of the wheats that we produced meant that we could command good prices. We still face that situation now with all our primary product. We need innovation, we need research, we need development and we need government and private funds poured into producing better and smarter products which people want to buy.

Our great problem currently is due to the fact that, where in the previous 30 years we had a collapse of only one half to one per cent per year in commodity prices, in 1986 we faced the situation over a couple of months where commodity prices collapsed by 25 per cent and they have continued to decline since then. When Herman Kahn visited Australia in 1974, I remember he gave a seminar to our political science group at the University of New South Wales. He was a great futurologist. In particular, he dealt with the problems that Australia would face as a commodity dependent country. He argued that in the mid-1980s to the 1990s, Australia's position would collapse because the terms of trade for us would collapse. Why? Because so many people would be producing the commodities that we had relied upon. He was pretty spot-on.

That underlines the fact that we must continue to put money and resources into things that we can flog to other people, not only primary products but the products of our secondary industries. Most importantly now, because of the changed fabric of the Australian and world economies into what we regard in the tertiary sector as the knowledge based economy—the knowledge economy runs through every sector, primary, secondary and tertiary—its enhancement is dependent upon the support of government and business, remarkably lacking through most of our history, and its willingness to invest in product that will give a return both to businesses and to the country. All of those things need to be pursued at all of those three levels. It is not enough to say—to use Andrew Denton's phrase, `As long as we beat New Zealand.' If we look at the money being poured into our research efforts by business and government, New Zealand is down the table of rankings, but Australia is ranked 19th of the OECD countries. That is a pretty dreadful situation.

Debate interrupted.