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Wednesday, 13 May 1987
Page: 3139

(Question No. 4739)

Mr Price asked the Minister for Communications, upon notice, on 8 October 1986:

(1) What is the estimated annual value of the PABX market in the (a) private sector and (b) government sector.

(2) Is there any PABX system currently available on the Australian market designed, developed and manufactured in Australia.

(3) What is the (a) percentage and (b) value of components made in Australia used in the assembly of PABXs for the Australian market.

(4) What is the value of PABXs exported from Australia.

(5) Does the government have targets for Australian industry participation in this field of manufacture; if so, what are they.

Mr Duffy —The answer to the honourable member's question, based on advice from the Australian Telecommunications Commission, is as follows:

(1) I do not have access to a detailed, authoritative assessment of the annual value of the Australian PABX market. Based on external studies, the estimate that Telecom and many in the industry work with is $130-160m per annum. The dissection of that amount between the private sector market and the government sector (Federal, State and semi-government) varies over time depending on economic circumstances and the budgets of the various governments concerned. As an approximation only, the purchases from the government sector vary from 25-40% of the total value.

(2) There is no such PABX system known to Telecom. However, all PABX systems involve some element of design and development to meet Australian network requirements and market needs.

(3) The Minister for Industry, Technology and Commerce, Senator John Button has informed me that his Department does not have available the information sought by the honourable member. However, his Department has received informal advice from an Australian supplier of PABXs to the Telecom Market, which indicates that on average a small PABX system with say 10 lines and 40 extensions assembled in Australia has Australian value added of between 15-20% with the Australian material and content consisting of:

base printed circuit boards

sheet metal parts, plastic moulding, extrusions; and

a small number of electronic components.

The above percentage excludes software. The value of this Australian value added componentry amounts to about $1100.

(4) Telecom advise me that the value of PABX systems exported from Australia is very low or nil, basing its advice on the fact that no endorsed PABX supplier has claimed points for exports during 1986 under the PABX Supplier Endorsement Local Content Scheme.

(5) The Government as such does not have targets for Australian industry participation in this field. In exercise of its powers under the Telecommunications Act 1975, Telecom has established a policy of only connecting PABX systems to the public switched telephone network that are approved in terms of compliance with technical standards, and that are supplied by endorsed suppliers. To be endorsed, a supplier must give formal commitments in terms of:

(a) maintenance support and

(b) local content.

The local content commitment involves achieving, during the period of endorsement, at least a minimum threshold level of 550 points out of a maximum of 1,000. Points are available for local employment, local sourcing and production, investment, multi-State servi-cing, and exports. In order to gain any points at all for local sourcing and production, a supplier must achieve at least 30% Australian manufactured value. Under the Closer Economic Agreement, New Zealand content counts as local content for this purpose. Suppliers must achieve a minimum threshold of 550 points in a very competitive market. There are 10 endorsed suppliers at present-namely, AWA-Nortel, Siemens Industries, IBM Australia, NEC Australia, STC, Philips, Plessey Australia, Teletrade Australia, Datapoint, and L.M. Ericsson. In addition, there are many resellers, of which the largest is Telecom itself.