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Wednesday, 27 May 1987
Page: 3392


Dr THEOPHANOUS(12.12) —I address my remarks firstly to the main issue in the Customs and Excise Legislation Amendment Bill 1987 which concerns the imposition of Customs duty on Commonwealth authorities such as Telecom Australia. I do so because this matter has created some debate amongst members of the public and, indeed, some concern within those authorities. Obviously, some arguments have been put forward by those who have raised this issue. Their arguments have a point which must be met.

I want to raise a couple of questions. I was surprised that the honourable member for Ryan (Mr Moore) did not raise some of these issues in his contribution. In particular, we must ask ourselves whether we will set the parameters of our customs policy in such a way that will impact on the development of high technology products by Australian industry. That is the fundamental issue, because there is no question that the fact that some of these Commonwealth authorities have not had to pay customs duty has meant that they have not encouraged purchases of Australian produced goods. I know that in some cases goods have not been available in Australia. There is a kind of chicken and egg argument-that is, because many enterprises in Australia were aware of the fact that Telecom and other authorities were exempted from paying customs duty, they did not put into place measures which would have assisted in creating those industries in Australia. The Government has now made a decision which I think will be beneficial in that it will encourage companies in Australia to produce more high technology goods that can be sold to Telecom and other government corporations. (Quorum formed)

I was speaking about the importance of these provisions for the Government's industry policy, and in particular, for the development of high technology industries. This Government, during the time that it has been in office, has worked very hard to turn Australian manufacturing around so that we can develop high technology industries in this country. I think it is true to say that no previous government even attempted this task, because previous governments always relied on the sheep's back to provide Australia's wealth, rather than on high technology industries and, in fact, on industrial development generally. This situation is being turned around by a number of measures that have been put into place by the Government, including the Management and Investment Companies Bill which provided for companies to acquire venture capital so that they could move into the high technology area.

These provisions came from the recommendations of the Committee of Review on Government High Technology Purchasing Arrangements. That Committee put forward these proposals to change the customs duty provisions for Commonwealth authorities. Its view was that in so doing it could help to promote more investment in Australian industry, especially high technology industry. We want to see more judicious decisions of this kind to help promote industry development. A good job has already been done, but more needs to be done. This is one of the provisions that needs to be put in place if authorities such as Telecom are to be made to invest more in Australian production and Australian research and development, especially in high technology areas.

We certainly support this key provision of the Bill. We believe that it ought to be supported by all members of this House. It is true that in the short term there could be some increase in the burden imposed on Telecom and other authorities, but we must recognise that that is a price that needs to be paid for the medium and long term development of Australian high technology industries. The boards of Telecom and other authorities ought to be looking at ways and means of purchasing from Australian industry. That is the way in which they should deal with this problem. They should be looking at ways and means of purchasing from Australian industry, and even encouraging Australian industries to get into projects at an early stage so that they can actually make some things in Australia. Unless we do this the future of this country, without industrial production in high technology industries, will be bleak indeed.

We have the skills in Australia for this sort of thing. If honourable members want to know what Australians are capable of doing in the area of high technology telecommunications equipment, I urge them to visit the Ericsson factory in Broadmeadows in Melbourne. They will see that the standard of production at that factory compares to the standard anywhere else in the world. Indeed, the Ericsson people there are exporting telecommunications equipment to the whole South East Asian region and in some cases are capable of exporting back to Sweden itself. So if we take the development of high technology industries in these areas seriously, we can not only produce for the Australian market but also export to the whole South East Asian region. As I say, unless we build on those skills that we have we will not be able to turn the economic situation around. I want to say to anyone who thinks that Australians do not have those skills and capacities that they ought to visit the Ericsson factory and to see what we are capable of doing. We are capable of the best high technology production in the world and we will be promoting that high technology production by supporting provisions of these kinds.

Rather than the boards of those authorities saying `We will just have to pay this fee and keep importing these products', they should look at the alternatives, which in some cases would be to go into joint ventures with Australian companies, to work with Australian companies and to make a lot of this equipment here. In that way we can not only provide more jobs for our people but also provide a future in terms of high skills for them. I would urge people to support these provisions. As I have said, I would urge the boards of those authorities to take on board the comments that I am making and in fact to concentrate on purchasing arrangements that focus on what we can do in Australia.

As you know, Mr Deputy Speaker, I have been involved in the Joint Committee of Public Accounts inquiry into offsets projects. I believe that one aspect of this must be the provision of offsets programs in cases where we are purchasing overseas, because in the past we have been lax with our offsets requirements and we need not only to emphasise the Australian content provisions of what we purchase overseas but also, in cases where the Australian content is insufficient, to emphasise the offset requirements of those high technology products. That is an area that we have been trying to get into further and further. When we came to government the situation in relation to offsets programs was absolutely disgraceful. Anyone could get out of the offsets program in this country simply by giving some cock and bull story to the offsets authorities about why he could not meet his offsets obligations. That situation has been substantially tightened up as a result of the various inquiries. But with every government purchase overseas of any substantial magnitude we need to keep emphasising the importance of the offsets requirements. If authorities are going to continue to purchase overseas, as I said, they should firstly look at what alternatives there are. If there are no alternatives in the short or medium term for them they should certainly try to ensure the maximum amount of work for Australian enterprises either in that area, through the Australian industry participation requirements, or in the offsets program, because it is only through these various provisions that we can ensure that we get the maximum industry development in this country in relation to these matters.

I want to touch briefly on a couple of other provisions in the Bill that have been referred to. One of them is the increase in relation to duty free goods from $200 to $400 and the limit on what can be brought into Australia. There is no doubt that a number of people have been abusing the duty free provisions that exist not only to get around the customs duty that is required in relation to the importation of products, but even effectively to undermine the establishment of industries in Australia. I was surprised when the honourable member for Ryan said in his contribution that somehow the consequence of all this will be more imports from overseas and fewer domestic developments.


Mr Lee —Who said that?


Dr THEOPHANOUS —The honourable member for Ryan said that. I find that quite extraordinary logic because I would have thought that the limits that the Government is putting in place were precisely to ensure that there would be more purchases from Australia. The kinds of abuses that were occurring in relation to the importation of a large number of electronic goods through the use of the duty free provisions will be circumscribed and limited. It seems to me reasonably fair that we have increased the limit from $200 to $400. We just do not want people to get around the customs duty provisions in a very large way by being able to import whatever they like simply because they have taken an overseas trip. There was talk about the poor fellow who manages only one overseas trip in 30 years. Okay, that case could arise, but what about the businessman, for example, who goes out of Australia five or six times a year and every time he returns he brings in all these electronic goods--


Mr Lee —For his mates.


Dr THEOPHANOUS —For his friends, as the honourable member adds. We do not consider this to be a harsh provision. We think this is a tightening up that is important and, most importantly, it will assist Australian industry. This has been the key element of my contribution here today-the importance of our doing all we can to ensure that we are producing more in this country from our domestic resources, not only to meet our domestic needs but also to export high technology products. I conclude by saying that we support the Bill and we hope that the Opposition will do so as well.