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Tuesday, 16 October 1984
Page: 1742

Senator COOK —My question is directed to the Minister for Industry and Commerce. It concerns the recent changes in the Government's shipbuilding policies. Can the Minister say what these changes are and what effect they will have on the competitiveness of the Australian shipbuilding industry?

Senator BUTTON —I understand Senator Cook asking a question like this, because he is from Western Australia where there are at least two outstanding shipyards which have been very concerned about previous government policies and have been concerned to see that there is a change in Australian shipbuilding policy. Senator Cook is to be congratulated for his diligence in asking a question of this kind because the shipbuilding industry is very important to the Western Australian economy. A decision was made and announced last week on the question of government assistance to the shipbuilding industry.

Senator Walters —What about the submarines?

Senator BUTTON —There has been no decision on submarines or whales which, I believe, would be of more interest to Senator Walters. The essential element of that package of policies is the extension of the existing bounty for shipbuilding to cover ships built for export. The second small but important element is that the 2 per cent revenue duty currently charged on imported inputs to the Australian shipbuilding industry is being removed. Honourable senators will recall that in 1979 the Fraser Government-for some revenue gathering purpose, I suppose, rather than for any rational economic reason-imposed a revenue duty on a wide range of inputs into Australian industry. Slowly some of those are being removed. The removal of the revenue duty on inputs into the shipbuilding industry is now taking place.

A third and important element in the policy announced is that the Government and I have had a series of meetings with shipbuilders and the shipbuilding unions. It has been made quite clear in the course of those discussions that the Government was not prepared to offer a package of assistance unless some agreement was reached between the shipbuilders and the unions on a wide range of issues which have been the cause of grave disruption in Australian shipbuilding yards over a number of years and have contributed to the Australian shipbuilding industry's decline in competitiveness. As a result of those meetings a wide range of issues relating to manning practices, demarcation between trades, uniformity of conditions in the industry and so on have been agreed on and placed on the agenda for continuing discussions between the unions and the shipbuilders. Unless those discussions proceed satisfactorily, the Government will not continue to provide the sort of package which was announced last week. That has been made quite clear.

The other point I should mention is that the shipbuilding industry currently has some 80 registered shipbuilders eligible for the bounty which is paid at a rate of 25 per cent of value added to the cost of a ship. We have provided a series of criteria for registering genuine shipbuilders, as distinct from the 80 companies currently registered, so that the number of shipbuilders in Australia will be reduced as part of an essential process of restructuring. I think they are the essential elements of the package about which Senator Cook inquired.

I conclude by making some reference to the Western Australian industry about which I believe he is naturally most concerned. The company, Australian Shipbuilding Industries (WA) Pty Ltd in Perth, has been very successful. It currently has under contract for export about 20 trawlers that are being built for export to South East Asia. Kailis in Western Australia also has a number of vessels under contract for export. The programs of those two yards are very much to be encouraged. ASI is currently competing with Singapore on price and time of delivery in terms of the refitting of vessels. That is a great achievement for an Australian company and should be recognised as such. If we can encourage those sorts of things across the industry by the sort of package of policies which the Government announced last week-that is the Government's contribution to that sort of encouragement-and see other shipbuilders in Australia turning in the same sort of performance, it will augur well for this country and particularly for that industry.