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Thursday, 17 March 2005
Page: 72

Senator BRANDIS (2:15 PM) —My question is to the Minister for Finance and Administration, Senator Minchin. Will the minister inform the Senate of what measures the government is taking to foster a positive investment climate in Australia? Is the minister aware of any alternative policies?

Senator MINCHIN (Minister for Finance and Administration) —I thank Senator Brandis for that good question. One of our key objectives as a government has very much been fostering a positive investment climate for business in Australia, and that is because private business investment really is all about providing the engine room of the economy. That is where you get the jobs growth and that is where you get the overall economic growth for Australia.

I am pleased to say that the latest ABS investment figures underline the confidence that Australian businesses have in the current state of the economy. Total private business investment increased by 5.8 per cent in the December quarter to be 10 per cent higher than it was a year ago, investment in new machinery and equipment is up 13.3 per cent on last year, and new commercial building investment rose by 11½ per cent in the December quarter and eight per cent overall for the year. These are very strong business investment figures. They are very good news for the state of the economy because they indicate down the track sustainable ongoing economic growth and they indicate what we have been doing to turn this economy around.

Yesterday we saw another very good example of this positive investment climate. Hawker de Havilland in Australia announced that it had won a significant work package for the new Boeing 787 so-called Dreamliner project. This new 787 is going to be one of the world’s most technologically advanced commercial aircraft. Boeing are forecasting a market of up to 3,000 of these 787 jets over the next 30 years worth a total of some $400 billion. As a tier 1 supplier to Boeing, Hawker de Havilland in Australia is going to invest $175 million in its Melbourne plant for this project so that it can supply wing parts for the 787.

Minister Macfarlane announced yesterday that the federal government is providing a $12.5 million grant by way of an investment incentive to Hawker de Havilland to ensure that a high proportion of the work will be done here in Australia. The Australian component of the project is expected to create about 200 direct jobs, many of which will be high-tech, and it will inject about $4 billion into the national economy. It is also going to create hundreds of indirect jobs, a lot of them in tooling design and R&D. The R&D that has gone into the design and manufacture of the aircraft wing movable trailable edges has been done in Australia. So, as a result of our investment incentive and as a result of Hawker de Havilland’s investment, a lot of this Australian technology is going to be commercialised here in Australia.

These sorts of announcements reflect the fact that Australian business does have confidence in the state of the economy, and that has been achieved by the hard work we put in when we came into office to pay off the big debts we inherited, to get the budget back into surplus and to keep inflation, interest rates and unemployment low. The 2005-06 budget, which will be announced on 10 May, will continue our very proud record of economic management.

I think the message that we all have to take out of this is that you simply cannot stand still when you are managing an economy like Australia’s. To continue to attract investment like the Hawker de Havilland investment, you have to keep up the pace of economic reform, and that does mean pushing ahead with efforts to reform our industrial relations arrangements so that more and more Australians can find work. You do need to make every effort to boost our productivity, to keep our budget in surplus, to keep interest rates low and to increase our access to overseas markets so we can deal with our current account issues. I implore the Labor Party to really get serious about its economic position and to jettison all the policies that it has stuck with for the last nine years that really are out of date. Join us in the exciting project of making this a truly great Australian economy. (Time expired)