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Tuesday, 17 February 1987
Page: 197

Mr WRIGHT(9.41) —The constructive remarks that have just been made by the honourable member for Boothby (Mr Steele Hall) are in sharp contrast with those of his Liberal colleague, the honourable member for Berowra (Dr Harry Edwards). After listening to the honourable member for Berowra, the well known economist, I can understand why people lose faith with politicians and in politicians. It seems that for the sake of political point scoring he has presented the House with another lot of misinformation. He talked at length about Australia's foreign debt. There would be many listeners who would not fully understand the situation but the honourable member did not bother to explain that he was talking about the gross foreign debt. I believe he led everybody listening to this debate to think that the $100 billion that he talked about was owed by the Hawke Government.

Dr Harry Edwards —I did not say that at all.

Mr WRIGHT —The honourable member made no variation to that statement; he simply made that point. He purposely omitted pointing out that this nation has reserves of almost $14 billion and that another $7 billion is owed to Australians by overseas people. So Australia has a net debt-I think the latest figures are for the June or September quarter-of about $80 billion. The honourable member further attempted to mislead listeners to this debate because he failed to point out that for every $10 billion owed by this nation, more than 60 per cent-more than $6 billion out of $10 billion-is owed by the private sector.

Dr Harry Edwards —So what?

Mr WRIGHT —The honourable member did not say that. He made out that the debt was all owed by the Government. I am very pleased with the points made by the honourable member for Boothby. He referred to the takeovers that bred so much debt. Maybe the honourable member for Berowra ought to listen to the honourable member for Boothby. Let us go a little further. The honourable member for Berowra also did not bother to point out that another 20 per cent, or $2 billion out of every $10 billion, is owed by the States and the statutory authorities. To take up the case of Queensland, some $3 billion is owed by the electricity authority in that State. The Liberals particularly-I separate a number of the so-called wets who, I think, at least understand what this is about-are trying to make out that the Australian Government owes all this money. However, 20 per cent of the total debt is owed by the Commonwealth and we have reserves amounting to some $13 billion or $14 billion. Whilst it is not a satisfactory situation, it is not as the Liberals are painting it, and it is certainly not as the National Party members are painting it. I follow the point of the honourable member for Boothby and suggest that much of our trouble today stems from the recent takeovers. The high financiers have been providing as much money as people want to take over Australian companies. One can borrow $1 billion or $2 billion. There has been a campaign misinformation. I regret that it is knowingly or unknowingly supported by some members of the media. This Parliament has a special obligation to make sure that these facts are told.

I watched the Channel 9 Sunday program on Sunday morning. I was amazed to see a well known and respected reporter, Charles Woolley, tell the viewers of Australia that a miner in the Northern Territory who is on $50,000 a year is paying almost half of his income in tax. It is totally untrue but because this journalist says it, people believe it because they see it on television. The facts are that under Labor's tax changes a person earning $50,000 a year does not pay $25,000 in tax or 50 per cent; in fact, he pays around 36 per cent. He pays $18,000 in tax. It is not 50c in the dollar; it is a little less than 36c in the dollar. People do not seem to understand that one does not pay any tax on the first $5,100 that one earns and that one pays 25 per cent on the next $7,000. I shall give an easy example. A person on $35,000 a year does not pay half of it in tax, as the Liberals are running around saying. They say that such a person is caught up in the 60 per cent tax bracket, which will fall to 49 per cent. That person on $35,000 a year now pays $10,676 in tax, which is just on 30 per cent-30c in the dollar. I suggest that the honourable member for Berowra has done his profession no good, nor his own reputation, in generalising here tonight and making out that this is the situation in other areas.

I return to the legislation before us. The Australian Industry Development Corporation Amendment Bill provides for the current Commonwealth statutory guarantee on borrowings and raisings by the Australian Industry Development Corporation now to become optional at the Corporation's discretion. I noted in a report that the Minister for Industry, Technology and Commerce (Senator Button) released that the AIDC had a record after tax net profit of $19.1m. The amendment simply acknowledges the commercial strength of the Corporation and its proven ability to stand on its own two feet as a successful government owned development bank. I think that the success of the AIDC under the Hawke Labor Government has been one of the many triumphs that this Government has chalked up in the business-industry area since 1983. I congratulate the Minister for Science (Mr Barry Jones) for the part that he is playing in this House. But because of the ignorance that exists in the community I regret to say that many people in the business world simply are not aware of the assistance that is available. I have spent some three months contacting department after department, both State and Federal, to gather information that I can put together in some type of booklet to explain what sort of assistance is available to business. I assure honourable members that an enormous amount of assistance is available, but regrettably most people do not know about it. The report shows that the AIDC approved 853 research and development grants worth $16m in 1984-85, so people ought to know that they can apply for some of that money for research and development programs. The report also shows that total AIDC assistance for 1984-85 was more than $64m. But it is very hard for a business person to find out what is available for him and where to go to get it. I am pleased that for that reason this Government has introduced a new scheme, the national industry extension service, with toll free numbers.

Everyone understands the frustration of any individual trying to ring a department for information. The switch person may be keen to help but has to pass the inquiry to someone else. It may be the wrong extension and the person who answers has to pass the call on to someone else. Fifteen or 20 minutes later the person inquiring still does not have the information. The Federal Government understands this problem. Whilst there have been many types of extension services in the private sector, we now have a government set up national industry extension service using toll free numbers. I am sure it will do much to assist Australian industry. It will help us to develop world class firms in the internationally traded goods and services sector. It is so important that Australians understand what is available to them. We have had problems. Honourable members from both sides understand the problems.

We need to understand also that these problems did not start in 1986 and 1987. In August last year I read the Metal Trades Industry Association report. It pointed out very specifically and clearly that our real problems occurred from 1979 to 1982 when the Liberals and Nationals, through their policies-or lack of policies-brought about the deterioration of our national manufacturing base. Many companies went off-shore. Many companies, simply because of the high cost of the Australian dollar, which was overvalued, and due in part to the high cost of labour, started manufacturing in Singapore, Malaysia, Hong Kong an other places. It is vitally important that we rectify this situation.

I heard an excellent speech made by the Minister for Science (Mr Barry Jones) recently, about the need to get quality into our products. If we are to do this, if we are to broaden our manufacturing base and if we are to get quality into our products so that we can compete, there must be government assistance. It irks me to hear members of the Opposition stand up and say that now is the time to privatise. I put it to all listeners that anyone going to the banks today has to bleed to get money out of them. Whether it be $10m or $10,000, people bleed for it. Then they find that other banks, because they consider some people to be a high risk, instead of charging 18 per cent, they put a loading on. One well known bank admitted to a committee of this House that the normal bank rate was 18 per cent but in some instances, because some applicants were a high risk, it was charging 23 per cent. That is not good enough. We need to come to grips with these particular problems. Now is not the time to walk away from the role of the AIDC or other government instrumentalities in helping business. Now is not the time to say, `Leave it to the banks' because, as I said, the banks make people bleed.

The Opposition also believes that, just as we keep the AIDC in place, and just as we introduce the NIES, the extension service program, we have also to overcome the delays. I ask the Minister at the table, the Minister for Science, to take back to departmental heads, especially on a regional basis that whilst people are starting to understand that money could be available for grants through the gross expenditure on research and development scheme, through the export incentive schemes or from the money we are giving through the States for the Queensland Industrial Development Corporation and the small business development corporations, the delay is unbelievable.

I also appreciate that it is government money, it is the people's money, so the Minister cannot just sign each application, say `It will be okay, mate' and then find out later on that it did not meet the guidelines or that the venture was not viable. But we have to ensure that that assistance is available and, moreover, that people know about it.

I am most concerned about the failure rate of business in this country. I recently saw some figures that showed that in the small business sector some 60 per cent-six out of 10-of every small business that starts up, fails within three years. Regrettably, in my home State of Queensland, that statistic has jumped to 72 per cent. So 72 businesses out of every 100 that start up fail within three years. I often wonder whether this is because of not only a lack of management skills, but a lack of knowledge. It surprises me, when all the information is available, when we have, through the Commonwealth Department of Industry, Technology and Commerce, some 50 different booklets, films and cassettes on every aspect of business, such as on the buying and selling of a business, on small business and the law, on presenting a case for finance, on job costing and estimating, on advertising, on credit management that businesses still continue to fail. I believe that with the States we have a very serious task ahead of us. We first have to educate businesses as to their special difficulties and we also have to educate them as to the advice and financial assistance that are available, and then, importantly make sure that that assistance can be given to them forthwith.

I am impressed with what we have been able to do in Australia over the years. I read recently of a fellow from Sydney, Arthur Bishop, a veteran Sydney inventor, who can now say that half the cars made in Australia use his steering gear components. I am told that a third of the cars in Germany now use his Australian invention, and that within a few years something like 30 per cent of all American cars will be using this invention. I read also of a new etching process, discovered by the Australian National University, which could develop into a multi-million dollar industry. A Commonwealth Scientific and Industrial Research Organisation scientist, John Coleman, has invented a high speed process for waxing cardboard boxes. It is so simple, but it actually means $5m to our country already and we can project this into tens of millions of dollars in the future.

We also have an exciting world reputation for our inventions and our innovativeness. Back in 1870 the Smiths, Robert and Clarence, invented the stump jump plough. The rotary hoe was invented by Australians by the name of Cliff and Albert Howard. It was Falkiner who developed the mechanical cane harvester. In 1880 the Australian James Harrison invented commercial refrigeration. Four years later, in 1884, McKay invented the combine harvester. The rotary mower was the brainchild of another Australian, M. V. Richardson, in 1952. Barely a decade ago Graeme Clark invented the bionic ear. Everyone has heard about the black box flight recorder, which is another Australian invention which was invented in the 1950s by David Warren. There are all sorts of other inventions that we can be proud of. But I regret that so often the records show that these inventions have gone overseas and we have not gained from them. So it is important that we do not start privatising the AIDC. It is important that we take note of the innovativeness, the expertise and the skills of Australians and that we back them. I give full credit to this Government and to the Ministers involved for the role that is being played here.

Recently a farmer in my electorate was given approval in principle for a $30,000 loan because he has come up with a quick freeze process for freezing paw-paw or papaya, as many people know that fruit. It looks as though we can crack the Japanese market with this process. Another fellow in my area has marble deposits which the other day were estimated to be worth about $400m. Regrettably, he cannot get money. Regrettably, he needs some $1m to get the project moving. He needs $350,000 for the saw, but under the rules that exist today he cannot get it. He can get a subsidy on the interest that he might pay on a loan up to $100,000 through the QIDC and he can get an export grant if he can get the things going. Austrade, the Australian Trade Commission, can find markets for him. We can subsidise interest rates and do all sorts of things for development and research, but many projects just do not fit into that mould; they do not fit those guidelines.

I come back to my final point. We need to make sure that people know what assistance is available. We have to make sure that that assistance is available readily, that it can be expeditiously made available, and finally, we need to understand that today people do not need just an interest subsidy, they do not need just assistance in finding markets, they do not need just this back-up for research and development, they need up-front capital.

There is a barramundi farm in my region. The locals have already spent $150,000 on it, but they need capital right now. Another project that they have developed is a harvester that can cut range grasses and inject nutrient feed for arid countries and for drought ridden Australia, but again, this needs up-front capital.

I conclude simply by saying that Australia has the expertise. We have the potential in our population. We certainly have noted that, with the assistance given by this Government, and previously by the Fraser Government, in setting up the AIDC. But there is a need for this Government to understand that today companies need not only the other assistance that is available, but also direct, up-front capital. I would like to think that if we do this, Australian inventions will stay in Australia for Australians.