Ms BURKE (10:26 AM) —I rise to speak in support of the Industry Research and Development Amendment Bill 1998. I welcome the mainly administrative elements contained within the bill and would like to take the opportunity to make some comments more generally about the importance of research and development.

Research and development, as we all know, is the way of the future for Australian job growth. Too often we hear of worthy Australian initiatives having to move offshore because they struggle to gain the initial support required to develop their innovative ideas. Whilst I rise in support of this amendment bill, it is a case of too little, too late for many Australian industries. The paltry commitment by this government to R&D and its narrow-minded decision to withdraw from the field of industry policy have resulted in a decline in the growth of many businesses.

The government's decision to significantly water down Labor's 150 per cent R&D tax concession saw the government nationally abrogate responsibility for industry development and leave emerging industries to the mercy of market forces. On the other hand, Labor is the party that believes in genuine national development. We recognise that market forces alone cannot deliver the sort of results Australia demands in an era of unprecedented globalisation of capital. For Labor, intervention is necessary to make the most of our opportunities and talents.

The notion of mutual or reciprocal obligation is a concept that has been canvassed by the House at length recently. The government is keen to extract reciprocal obligations from the unemployed, but it is not so keen about acknowledging its own reciprocal obligation to support Australian industry. Labor, on the other hand, sees the need for genuine reciprocal obligation to be shared by all parties. In relation to industry policy, Labor is committed to a partnership with industry to ensure business growth that in turn produces employment growth. The extension of a reciprocal obligation principle to industry would mean the government provides assistance to industries in return for firm commitments from industries on jobs, investment, exports and R&D.

There are 6,778 registered businesses in my electorate of Chisholm. There are companies that manufacture construction steel, plastic, ducted heating, power tools, trucks and drilling equipment, just to name a few things. In addition to this, there are many companies within my electorate that are at the cutting edge of new growth industries—namely, modem products and infra-red optical links, scientific apparatuses and manufacturing chemicals. These industries would undoubtedly be supportive of the administrative changes set out in the bill before the committee today.

However, I am sure that they would be assisted far more by a return to the level of R&D tax concessions they enjoyed under the Labor government. Even the Industry Commission recognised there was a net benefit to the Australian economy provided by the concessions. The ABS industrial figures for 1996-97 demonstrate that this government's small government mentality has resulted in a significant downturn in R&D expenditure across the board.

The figures show a seven per cent fall in spending by businesses on R&D in average 1989-90 prices with $275 million shaved from business R&D spending in 1996-97. This is compared to an average annual increase of 17 per cent over the five years from 1993 to 1998. There are 850 fewer people working on industrial R&D and it is anticipated there will be further falls in 1997-98. These are the most current and up-to-date figures we have.

This was the first drop in industrial R&D spending in the more than two decades that records have been kept. It is no coincidence that it happened in the first full year after the government's massive cuts to R&D incentives—some $2 billion over four years.

As I mentioned, my electorate contains a wide range of traditional manufacturing companies and new niche industries. Together with the south-eastern region of metropolitan Melbourne the area has suffered the loss of large employers in recent times with the closing of the Lovelock Luke company and other manufacturers. These closures have resulted in significant job losses and have seen several of these industries being relocated overseas. Many of these industries would have benefited greatly from a more interventionist approach to industry policy and a strong commitment to progressive approaches such as Labor's 150 per cent R&D tax concession.

At recent Australia Day celebrations in my electorate of Chisholm, Whitehorse City Council awarded their young citizen of the year to Simone Schoenwaelder for her endeavours in the field of medical research. On collection of her certificate Dr Schoenwaelder made the observation that science is often overlooked when achievements are being recognised. Dr Schoenwaelder completed her doctorate of medicine at Box Hill Hospital in the department of medicine which is undertaking world breaking research into blood borne diseases.

The centre for blood disease is leading research into areas of understanding how blood clotting is triggered—and the relevance this has to diseases such as heart attacks and strokes—the discovery of new genes that may protect against the development of blood cancer and an understanding of how blood clotting dissolves. The centre has established an alliance with a newly established biotechnology company to develop a new class of antithrombotic drugs. Such dynamic research facilities need ongoing support and funding for without proper assistance for the new concepts and products that emerge from research and development there can be no long-term benefit for the community.

One of the worries for this type of facility and others like it is the potential loss of talented researchers overseas and the resultant brain drain. This situation is more likely to occur in a climate when sufficient substance is not given to emerging research facilities and their associated industries.

The centre of blood borne disease's recent alliance with the business community is a recognition of the need for research endeavours to be linked with business. This example demonstrates that innovation is occurring throughout the country, including in my seat of Chisholm, and illustrates the potential benefits that can be wrought when government, universities and business work in partnership with R&D endeavours.

Whilst welcoming the amendment to the principal act contained within this bill I also note that we need further reform which encourages the following: investment in infrastructure; assistance in turning good ideas into commercial ventures; a successful venture capital market; and making the most of our natural resources, skills, motivation, education and creative strengths. Again, I say that I rise to support the bill before the committee today, but believe it is too little too late.