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Wednesday, 10 February 1999
Page: 2314


Mr BRERETON (12:07 PM) —by leave—I am reluctant to rain on the Deputy Prime Minister's parade—no one can doubt his enthusiasm—but I think some balance is required in consideration of the government's performance and its objectives in this vital area of public policy. Self congratulation is a common political weakness, and we have certainly heard a dose of it today.

The World Economic Forum in Davos, Switzerland, was held less than two weeks ago, with 40 heads of government in attendance. Yet John Howard did not deign to appear. Peter Costello could not fit it into his schedule. Alexander Downer, the Minister for Foreign Affairs, went but his was not really a serious economic presence. One member of the Australian delegation was quoted as saying, `We asked for a special session on Australia, but the organisers told us that, unless the Prime Minister came, we couldn't have one.'

Last year's APEC meeting in Kuala Lumpur lacked focus and direction. Most disappointingly, APEC failed to achieve an agreement on the early voluntary sector liberalisation. We saw from Australia absolutely no ambition whatsoever. On that occasion, the Prime Minister blew the opportunity to push for further trade liberalisation to help regional economic recovery. In Auckland later this year, it will be 10 full years since the Hawke government established APEC.

We saw, with President Clinton's recent call for a new WTO round, the opening of the prospects for a new dynamic phase of world trade negotiation, especially in this year—the WTO year of agricultural trade liberalisation. Yet where is Australia? I will tell you where we are—we are dragging our feet. For example, we just missed the deadline for ratifying an important WTO agreement on financial services—an agreement concluded more than a year ago. Just what kind of a message does that send? There is scant sign now of the leadership shown by Hawke and Keating in the past.

The Deputy Prime Minister makes much of the flexibility of the government in assisting exporters to switch from our traditional markets in South-East Asia into new markets in the Northern Hemisphere. But the reality is that a large part of this shift is due to the much lower value of the Australian dollar making our commodity exports cheaper overseas. Hidden amongst the figures here today, we see a range of exporters who are having real difficulty switching to the new markets. Penetrating these markets takes time, effort and an understanding of local conditions, preferences and regulations. It requires support from Austrade, and it is all the more difficult when Austrade's budget has been slashed by this government.

In the present environment, there is a pressing need for Australia to shift into new industries. These include the information technology industry, but also others less often talked about such as biotechnology, genetic engineering, environmental protection and communications. The main criteria for attracting such high-tech industries is not low wages but good scientific infrastructure, a well-educated and adaptable work force and a government committed to putting in the resources required to encourage research and development.

The Deputy Prime Minister has said today that our exporters are doing a great job and that they would do an even better one if the Senate passes the tax changes. That was his statement. In this House, we all know that the tourism sector in Australia is one with great potential to grow, but we also know that the number of tourists visiting Australia has fallen by around four per cent—equating to a loss of about $665 million for the many small businesses that depend upon tourism for their livelihood. Murphy—the government's own modeller of choice—says that tourism will decline further as a consequence of the GST. Dixon, the other modeller—the independent, world renowned modeller—makes the point that the GST will discriminate against labour intensive industries in favour of capital intensive sectors. He concludes that the high growth export sectors of tourism and education exports will be hit—and hit hard.

There was no recognition of that by the Deputy Prime Minister today. His assertion that things will be better for the export sector with the GST is not borne out by the facts. Treasury's own analysis indicates that the GST will lift the exchange rate by some 3.5 per cent, while Murphy says it could be as high as 4.1 per cent. This will certainly make our goods more expensive in overseas markets—there is no doubt about that. For the export market sector, let me say, the Deputy Prime Minister's assertions today are the statements of a false prophet.

The Deputy Prime Minister acknowledged that our exporters face a much more difficult and challenging environment in this coming year. In these circumstances, the government should be doing a great deal more to assist our exporters to maximise their marketing opportunities. Where is the ambition in this statement for the active trade promotion so vital to Australian jobs? Money spent on the Export Market Development Grants Scheme has a major multiplier effect in our economy. Instead, this government has gutted it. As against Labor's last three years in power, the coalition's first three years saw the Austrade budget slashed by over 30 per cent. Over the same period, the EMDG scheme was cut by over 25 per cent. So we see Austrade not attending the recent Milia Multimedia Festival—not attending at all—and we see Victoria left to lead the charge for Australia.

As a middle-ranking power, Australia's future lies in APEC and the WTO. Labor negotiated the Uruguay Round and won significant improvements for Australia's farmers, especially in beef, rice, wheat and a range of other products. Labor's WTO legacy includes the declaration of 1999 as the WTO year for agricultural trade liberalisation. Yet the government has almost nothing to say about this issue so vital to the interests of Australian farmers. What else is missing from the statement, is a substantive declaration of Australia's position on the upcoming WTO Millennium Round. All we get from this government is silence and secrecy, just as they gave us until they were smoked out on the Multilateral Agreement on Investment—same story, same secrecy, same silence.

What we needed today was a statement of ambition and defined goals—that is what we needed. We needed real plans on how Australia can achieve those export goals, and it is exactly this that the Deputy Prime Minister has failed to deliver. Little wonder that, for the first time ever, the cumulative goods and services trade deficit in the 1998 calendar year topped $10 billion.