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Thursday, 11 October 1984
Page: 1631


Senator PETER RAE(12.01) —It is my understanding that, whilst the red sheet suggests that the Automotive Industry Authority Bill 1984 and the Industries Assistance Commission Amendment Bill 1984 should be taken together in cognate debate, it is generally agreed that they should not be. Therefore, we are proceeding with the Automotive Industry Authority Bill.

The Bill as I understand it proposes to establish the Automotive Industry Authority, with the following functions: To conduct investigations into automotive industry matters, to and 'automotive industry matters' are set out in very broad terms in the definitions in the Bill; to monitor and analyse automotive industry matters; prepare and give to the Minister reports as required by the Government; to provide or to support by way of financial or other assistance services that could contribute to improvement in management efficiency in the automotive industry; to seek and receive information on automotive industry matters from relevant persons; to consult with State governments on automotive industry matters; to monitor developments and policies of other countries in relation to the automotive industry and advise the Minister on the relevance and possible application in Australia of such policies ; and such other functions as are conferred on the Authority by an Act.

The Bill provides that reports by the Authority will be on the effect of regulatory policies. That is dealt with in clause 10. Under sub-clause (4) of clause 10 'regulatory policy' is defined as meaning a regulatory policy of the Commonwealth in relation to trade practices, consumer protection, environmental protection, prices surveillance, foreign investment in Australia or-this is the one to which I draw particular attention-any other matter. That will mean that the proposed Automotive Industry Authority will be able to be involved in any other matter which it thinks is of interest to it. Presumably the meaning of that is that it is to be in some way associated with regulatory policy. That is an extraordinarily wide power to give to a body such as this.

When we see what powers are provided under the Bill we become even more amazed. Clause 11 provides:

In addition to any other power conferred on it by this Act, the Authority has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

I emphasise, that the Authority will have the power 'to do all things necessary or convenient to be done for or in connection with the performance of its functions'. The performance of its functions can be in relation to a number of specific things or in relation to any other matter. I cannot think of a way in which a body could be given wider powers than those. I cannot think of a good reason why it is necessary to give it such wide powers. It is not necessary to enable the Authority to carry out its functions for it to have absolutely unlimited powers.

The only good part of the Bill is clause 32, which is a sunset clause and states:

On the expiration of 31 December 1992, this Act shall cease to have effect.

I am glad to see that the Government is introducing a sunset clause in legislation such as this. As it is part of a plan which had a time scale, it is appropriate that it does have a sunset clause. However this, I think, shows something of the sham in what the Government has been talking about in recent times, when the Prime Minister (Mr Hawke) in particular has spoken of his concern and his Government's concern about deregulation. Deregulation? This is corporatism at its best. This is the imposition of government control by a government-created authority over a very significant sector of Australian industry. It is the very antithesis of deregulation. I believe it shows the sham in the Government's statements, repeated as recently as today when it talked about holding conferences.

Obviously the Government is trying to catch up with the fact that there has been widespread acceptance of the Opposition's strong moves towards placing a heavy emphasis on deregulation. In our industry and commerce policy, details of which were released in August, and in our industrial relations policy, details of which were released much earlier this year, we gave specific recognition to the very heavy need in Australia for positive deregulation as well as reform in the making of regulations, in the regulatory process. We said in that industry and commerce policy document:

2.30. The Coalition believes that one of the major inhibiting and cost-inducing factors in both the operation of Australian industry and in entrepreneurial activity is excessive regulation.

2.40. Various assessments have been made of the rate of growth of regulatory activity. It is important to remember that it is at a Commonwealth, State, and Local Government level.

2.41. The Confederation of Australian Industry Report, published in July 1980, indicated that for every one dollar of net income, business, on average, spent 13 cents in complying with Federal and State business regulation. It is also indicated that the rate of regulation-making had increased by 62% in the past two decades.

As I mentioned earlier, we have paid a great deal of attention to regulation, to the extent that we have a policy on regulation, deregulation and reform of the regulatory process due to be published within the next 24 hours or so. The policy has been carefully prepared and is part of the total policies of the Opposition. It is not something that was dreamed up at the last minute as a means of finding a way to gain a temporary advantage, which appears to be what the Government is doing whilst at the same time going ahead imposing more corporate state-type institutions on the Australian industrial scene. We already have the Steel Industry Authority overseeing all the steel industry. We now are to have the Automotive Industry Authority. Yet we had talk about deregulation. I refer again to what the Opposition sees as some of the ways that need to be taken towards deregulation or regulation reform. I quote again from our industry and commerce policy document:

2.42. As has been found by those States such as Tasmania who have commenced a program of deregulation and regulation reform it is not going to be merely a matter of eliminating or abrogating various regulations without careful study of the consequences.

2.43. Four different methods of approach are necessary:

(a) the identification and supervision of regulatory control must be brought firmly under Parliamentary control. Several possibilities for this exist and we shall at the time determine which form of Parliamentary Committee supervision is both most readily available and suitable.

As I said, a policy statement in relation to that will be made within, I anticipate, 24 hours. That statement has been prepared and accepted. It has gone through all the policy making processes. The statement goes on to say:

(b) (i) we shall adopt regular reviews of regulation by the use of a system of advisory bodies. (ii) each advisory body will be chaired by the Minister. It will be comprised of the 'victims' of regulation as well as the 'beneficiaries' rather than by the regulators themselves, and its membership will be changed according to the area of regulation being reviewed. We would wish to ensure that we avoid the creation of simply another QANGO. Those who have to work within the regulation and those for whose benefit it may have been created will have the opportunity to recommend upon its value, simplification or abolition.

(c) through the Council of Ministers, we shall consult with the States to encourage removal of any unnecessary State regulation, particularly where it is possible, by co-operation, to avoid duplication by the Commonwealth and the States.

(d) we will require a 'Regulation Impact Statement' with every proposal for new regulations. This will identify what existing regulation has been superseded and can be abolished, and ensure that 'as you create so shall you terminate' regulation.

2.44 Further continuing attention on deregulation and regulation reform will be achieved through a requirement that each Department, Statutory Authority, or other Government agency shall include in its Annual Report (or where not presently required to report, then make an Annual Report) upon the following:

(a) steps taken to reduce the burden of and to simplify 'the paper war'- particularly so far as this imposes costs rather than benefits upon the private sector;

(b) the initiation of more simplified processes and services to the public;

(c) the extent to which they have undertaken any, and if so, what, program evaluation and the progress and results, if any, obtained; and

(d) the proposed order of future program evaluation.

I think that statement shows that the Opposition is serious about the question of regulation, regulation reform and deregulation. We have given a great deal of consideration to these matters and have come out with firm proposals in relation to them in particular policy areas. These are drawn together in an overall policy document. I make that point firmly because I believe that a sham is taking place so far as the Government is concerned in its trying to catch up with the attractiveness of the Opposition's policies in this area by pretending to be doing something while at the same time creeping socialism is taking place. The Automotive Industry Authority Bill is a good example. If one is having this sort of legislation, why on earth does one have to have the extraordinarily broad powers given by this Bill? I wonder how the Government justifies the incredible cost of the various authorities which it is establishing as part of its corporate state. Some $4m is identified for only a relatively small group of the industry authorities which are to be imposed upon the freedom of decision- making of industry in Australia.

Whilst the motor vehicle policy was welcomed in broad terms by the Opposition, we thought it was extraordinary that the Government failed to do anything about one of the most important ways of making the industry competitive, that is, by doing something to free up the constrictions imposed by the prices and incomes accord, the whole of that cosy arrangement between the administrative or parliamentary arm of the Australian Labor Party, that is, the Government, and the industrial arm, the Australian Council of Trade Unions which comprises the majority of trade unions. When the policy was produced we pointed out that what Australia needed most to be able to make itself competitive in various areas of manufacturing industry was a sensible wages policy and not a centralised, indexed wages policy. We find that the Government is indexing not only in relation to wages costs but also all sorts of other costs, so that automatically next year we will have the sort of thing that is feared by so many people. Syntec and other bodies have expressed their views and fears about what will happen to this economy next year as more and more of these automatic costs increases start to bite.

The Government's high borrowing requirements to enable it to engage in its various types of corporatist state activities will also have their impact. I fear that we will find that the situation Australia enjoys at the moment, having recovered from the drought, having had the benefit of the wages pause introduced by the former Government and having had the benefit of the recovery in world trade, will no longer continue. If the present Government's policies are continued we will have a depression of that recovery to the degree that Australia will suffer severely. That will happen unless the Government's policies are changed. That is why we would prefer to see the automotive industry freed from some of the controls which have been imposed on it and not have more controls imposed on it. The automotive industry has been a troubled industry. It is necessary to have a plan. The Opposition had a plan which was due for review this year. This Government is not doing something novel in introducing a plan for the automotive industry. It is not novel that that plan seeks to overcome some of the problems between the manufacturers and assemblers on the one hand and the automotive parts manufacturers on the other. I am more than curious as to why it is necessary to have this extremely powerful Automotive Industry Authority presiding over that plan. We hope to find that, in the second half of 1985 and in 1986, as the plan develops and when the real crunch hits, members of the Federation of Automotive Products Manufacturers will not be adversely affected by the problem of imported components, that is, by manufacturers who have the entitlement to do so importing completely built up units as opposed to components.

A number of welcome changes have been going on in the industry. The car companies have got together as a group to tackle problems that arise in the industry on an industry rather than a company basis. John Lysaght (Aust.) Ltd has been involved in discussions about reducing specifications on steel from some 200 to 40 or 50. That again is a means of reducing the cost of production and making Australian industry more efficient. The Opposition believes that the various steps being taken to make manufacturing more efficient, such as inventory control, flexible manufacturing systems and Cadcam generally will all help the industry to become more competitive with other sectors of the industry in other parts of the world. The Opposition, of course, believes that it should support steps that can be taken. However, I do not support steps being taken in isolation to impose more regulation on the industry while there is an inflexible wages policy which can only increase the cost and undo the advantages which are being achieved by other means.

Sections of the automotive industry have expressed their considerable concern that the Chairman of the Automotive Industry Authority will be totally independent. One of the problems within the industry is that there are significant differences between various sectors of it, particularly between the manufacturers and the members of the Federation of Automotive Products Manufacturers. A number of sectors of the industry are concerned about the potential for government interference in the self-help programs being developed within that industry. I also understand from reports I have received that the very wide powers given to the Authority and to which I have already referred have been a matter of concern to sectors of the industry. It is for those reasons-that we see this Authority as an extension of the corporate state, as a form of unnecessary intervention and unnecessary cost as something that will restrict rather than assist the development of a flexible and successful automobile industry in Australia-that we do not propose to support this legislation.

As was indicated earlier, we support in broad terms the Government's motor vehicle policy plan. We have criticised previously, and I made reference to them again today, some specific areas where we believe the plan could be improved. As to this aspect of it, the imposition of a body to second guess, to control, to slow down the decision-making process within the industry, to give the Government a controlling influence on the industry without it actually acquiring the industry, is typical of the worst examples of the development of the corporate state where government obtains control, government intervenes with government-imposed costs on an industry, and then pretends to leave the industry free of government intervention. The fact is that something which is an expensive and unnecessary cost, with extraordinarily wide powers-obviously the most extraordinarily wide powers in any legislation to come before this place-is something which the Opposition does not see as contributing to the restoration and development of the automobile industry in Australia. For that reason we will be opposing the legislation.