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Thursday, 28 May 1987
Page: 3488

Mr BARRY JONES (Minister for Science)(12.13) —I thank honourable members for their contributions. In the spirit of trying to keep the length of the debate down I will try to cover as much distance as I can in the shortest space of time. The honourable member for Ryan (Mr Moore) led for the Opposition. On the Customs Tariff Amendment Bill, the Government cannot accept the second reading amendment moved by the Opposition. He referred to the Government's decision on the Industries Assistance Commission's report on power electronics, stating that the Opposition regarded a uniform rate of 20 per cent as being too high. A rate of 20 per cent is, of course, the rate which was recommended by the IAC following an extensive inquiry process in which all interested parties had the opportunity to put forward their views. This rate is consistent with that which already applies to related industries, in particular the telecommunications industry and the consumer electronics industry. The 20 per cent rate should improve resource allocations by removing tariff induced distortions in investment production and consumption decisions. In terms of further reductions of assistance in the medium and long term, the Government has a commitment to reduce the dependence on barrier assistance for the whole of the manufacturing sector and to the encouragement of more competitive and export oriented industry through a variety of positive adjustment measures. While the Government has no specific time-table for reviewing the power electronics industry at this point, its attitude to this industry in terms of barrier assistance is consistent with that for manufacturing as a whole.

On the Excise Tariff Amendment Bill, the honourable member for Ryan said that he was concerned that the Government's fuel pricing policy is causing unnecessary increases in fuel prices. I think we cover this ground on each occasion that similar measures are put before this chamber. The important thing is to ensure that there be no misunderstanding about how the system works. The Government fully offsets changes in revenue from crude oil excise and royalty by across the board changes in excise payable on petroleum products. While petrol price changes are kept to a minimum as a result of this policy, about one-third of the effect of the crude oil price increases still flow through to the consumer. The net result is that as crude oil prices change government revenues remain the same over all and petrol price changes are kept to a minimum. I will deal with the point made by the honourable member for Fairfax (Mr Adermann) later on.

The honourable member for Ryan also referred to passenger concessions in connection with the Customs (Valuation) Amendment Bill. He spoke of the new passenger concessions as though they pose difficulty in assessing values. In effect, all that will happen is that the value of the goods will be indexed. The $200 was set, I think, when the honourable member for Ryan was Minister for Business and Consumer Affairs-possibly even earlier. One would have to say that $400 now is perhaps the appropriate equivalent of what $200 was in value in a simpler era. I do not see it as a practical problem. Concessions have always been based on value. The only thing that has changed is the number of dollars permitted. I might comment on valuation at the Committee stage.

The honourable member for Dawson (Mr Braithwaite) expressed concern that the Government should monitor imports of passionfruit products from South Pacific forum island countries. In these Bills we really see the world. A tremendous range of activities is covered. He said that there was no danger from such imports at the moment. He also mentioned the dumping of chemicals and plastics. The honourable member can be assured that we are continuing to monitor this and that we are well aware of developing country imports in this regard. We have to make up our minds whether we are in world trade, whether we are aimed at international competition, or whether, as we were in the old days, we are always essentially defensive, always operating on a basis of saying that we cannot compete and therefore we will put up barriers to protect us.

The honourable member for Denison (Mr Hodgman) raised some points. I am sorry to disagree with the honourable member about his assessment of the customs system. The principal purpose of customs originally, of course, was to protect local industry through the tariff and customs Acts. On the other hand, it is impossible to develop an industry which is export oriented and which is capable of restoring Australia's share of world trade if the emphasis is constantly put on barrier protection rather than raising the quality of goods or on developing strategies for exporting, and so on. There is a community of interest, among the drier members of the honourable member's own Party and the Government on this issue. I detect a slight element of divergence between the position taken by the honourable member for Denison-and I suppose the honourable member for Franklin as well to a degree-and the--

Mr Hodgman —We work for our textile workers and we will continue to do so.

Mr BARRY JONES —Let me just mention something about the textile industry. We all remember that before the changes were brought in for the textile, clothing and footwear industry there were cries of gloom to the effect that if Senator Button's reforms were introduced employment in the textile industry would be decimated. One area that was singled out was the north coast of Tasmania. There was a lot of discussion about what would happen in Devonport. It was said that Devonport, a town with a heavy textile employment, would become a ghost town. The information from Senator Aulich is that not one job in textiles has been lost in Devonport, and there is no projection for job loss either. The reforms to TCF have been accepted by the industry, they have been accepted by the unions, and we believe that in the next few years we will have a much healthier industry, capable of exporting.

I must take up a comment from the honourable member for Denison. At one stage he spoke about what he described as the loss of 650,000 jobs in manufacturing. I would be curious to see his arithmetic. It is perfectly correct that there has been a decline in the proportion of people in the labour force employed in manufacturing in Australia since its high point in 1965. In 1965, there were 1,282,200 people-or 27.6 per cent of the total labour force-employed in manufacturing. By February 1987, that proportion had fallen very sharply by 40 per cent to 1,135,700 or 16.2 per cent of the total labour force. The actual reduction in the number of manufacturing jobs was 146,500. The same people are not involved because so many new people have come in to replace those who died or retired in the meantime.

Mr Hodgman —That I challenge.

Mr BARRY JONES —Of course, one can make any kind of projection that one wants. If we say that the 1965 figure was the `right' figure and that that 27.6 per cent should be an immutable figure that goes on forever, if we deduct the difference between 27.6 per cent and the present figure of 16.2 per cent, I suppose we could say that the number of jobs lost is the difference of 11.4 per cent. From a statistical point of view the honourable member for Denison would concede that this would be a nonsensical methodology. We cannot apply it at all.

Mr Hodgman —I didn't use that method; I just used industry figures.

Mr BARRY JONES —It is simply not correct to say that 650,000 jobs have been lost in manufacturing.

Mr Hodgman —It is.

Mr BARRY JONES —The honourable member must produce the figures.

Mr Hodgman —You talk to the Australian Manufacturing Council because that is its figure.

Mr BARRY JONES —That is just nonsense. I confirm from my own experience what was said by the honourable member for Bendigo (Mr Brumby). Who would have thought five years ago that we would be selling steel to the United States of America? But we are. Who would have thought that we would be selling motor engineers to Europe and Japan? And we are. Who would have thought that we would be selling completed motor vehicles to Japan? And we are. The honourable member for Bendigo also spoke of a whole number of operations involving new, small, innovative and lively companies which are getting up their products and selling them on the world market. The honourable member for Denison also said that my predictions about sunrise industries had not happened in Tasmania. If that is the case, Tasmania is the only State where it has not happened. Back in 1982-83 I made a number of predictions which were not very popular in Tasmania at that time, but subsequent events have borne them out. The first was that Tasmania's reliance on high and rising per capital electricity generating capacity would not be a powerful contributor to job growth. That has proved to be absolutely true and the Hydro Electric Commission and even the Tasmanian Government have now conceded as much. My other prediction was that the reliance on traditional industries would not be enough. Tourism, I am gratified to see, is developing as a significant area of job growth. There are underlying problems in Tasmania which, I suspect, relate to the skill base and perhaps more than anything else to the flight of capital from Tasmania. In fact, Tasmania with 3 per cent of Australia's population is not spending 3 per cent of investment capital. The people of Tasmania who own a lot of the capital choose to apply that money somewhere else. I think that the failure to generate venture capital in that State and the fact that it has failed to make the area attractive for innovators to develop their own prospects is a tragedy.

I thank the honourable member for Chifley (Mr Price) for his appropriate reference to the Minister for Industry, Technology and Commerce (Senator Button) and his generous reference to me for our role in promoting industry restructuring. I think that will be one of the outstanding achievements of this Government.

Both the honourable member for Franklin (Mr Goodluck) and the honourable member for Fairfax (Mr Adermann) asked questions about petrol pricing. That matter is outside the reach of the three Bills currently being debated. Differential pricing for petrol in various locations throughout Australia is due to a host of variables. I will respond to that in more detail on a later occasion. There was a particularly significant example in Victoria around the Easter period when, for reasons of their own, the petrol companies in the Melbourne metropolitan area decided, perhaps as an Easter gift, to drop the price of fuel very sharply. Once Easter was over they quite arbitrarily raised the price. Of course, needless to say, the blame for the rise in the petrol price, which looked so arbitrary, was attributed to either the Victorian Government or the Commonwealth Government. It had nothing to do with either government-it was the petrol companies themselves in a frolic of their own.

Mr Adermann —They do it frequently.

Mr BARRY JONES —Absolutely. I would be very happy to ask the Prices Surveillance Authority to investigate this matter immediately and come back with more specific information which can be debated at the first opportunity in the new Parliament. As a final point, I refer to the comment of the honourable member for Denison about citrus fruit. The Government's decision to reimpose the higher duty is to help the industry. The honourable member referred to dumping. I point out that there was a preliminary dumping finding against Brazil last November. This has had the effect of raising the effective cost of imported juice by about 30 per cent. Since then the world price of juice concentrate has risen by over 50 per cent, anyway. I thank honourable members for their contributions to this debate.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.