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Thursday, 25 March 1999
Page: 3270

Senator MURPHY (1:01 PM) —I just want to say a few words. I do not want to go over many of the points that have been made with regard to application of the bounty and when it was introduced. It is a very important bounty in terms of my state and a shipbuilder known as Incat in Tasmania. With the greatest respect to Senator Murray and the Western Australian shipbuilders, through Incat we are leading the way in terms of fast ferry technology. Incat has just delivered its 27th fast ferry to Europe. Indeed, it has built almost 50 per cent of the high-speed passenger ferries operating around the world. It employs almost 1,000 Tasmanians. Its export value last year was around $212 million. It is very important to us; it is the state's largest employer. That is why we, as Labor senators and as opposition members, have fought very hard for the retention of this bounty.

As Senator Murray said, it was always the intention—and the intention of Labor in government as well—that the bounty continue until the OECD agreement was ratified. That is the very important point. I think it is worth noting that since the coalition won government there has actually been a decline in the number of developments in terms of shipbuilding. The government now have a proposal not only to phase out the bounty but also to link it to research and development, which will lead to a significant decline in the amount of money the shipbuilders will actually get. That is having an impact.

I agree with Senator Murray that we should be endeavouring to improve this bounty while supporting the maintenance of it. In the face of the types of assistance that are being paid to European shipbuilders, we should not be proposing a further decline in the bounty. We must maintain this very important industry. I know that a lot of it is in my state, but it is important. We should ensure that we maintain a shipbuilding industry in this country by making sure that there is, to at least some degree, a level playing field.

As I said, there has been some decline in shipbuilding but the money that was earned for this country in export dollars was almost $1 billion—it was $926 million—in the last financial year. This bill proposes to introduce what is known as the SIS which will see the bounty being paid on eligible research and development expenditure at a rate of 50 per cent for innovation expenditure, up to a total of two per cent of the eligible construction costs of a bountiable vessel. That is a significant decline compared with where we were with regard to five per cent—or, indeed, I think it is only going to be three per cent through to June 1999.

I was able to obtain some information from the Australian Shipbuilders Association that shows the investment decline that has occurred since 1996 under the coalition government. That is a very sad thing, and it is something we should look at very seriously with a view to turning it around. Like other senators, I do welcome the fact that we at least have got some half-hearted attempt to continue this bounty. I just wish that the government could see its way clear to actually improving it and enhancing the opportunities, or at least making sure that some degree of level playing field continues, for Australian shipbuilders in this country.