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Tuesday, 14 May 1985
Page: 1878

Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to the comments by Mr Len Townsend of the Vehicle Builders Employees Federation of Australia which were reported in today's Australian Financial Review and which indicate disapproval of the just-in-time manufacturing concept. Does the Minister agree with Mr Townsend's very negative view that Australian industrial relations often need time for resolution and that the just-in-time concept would result in widespread stand-downs and cost more than it saved? Do Mr Townsend's comments conflict with the Minister's expressed desire to see a more co-operative union-management system in Australia which would enhance industry's international competitiveness? Will the Minister dissociate himself from Mr Townsend's comments and use the resources of the Government to persuade unions that improved efficiency is essential to the long term interests of manufacturing industry and hence its employees?

Senator BUTTON —The first thing I will not do, of course, is dissociate myself, as I am asked to do, from Mr Townsend's comments. Mr Townsend's comments, which Senator Chaney was good enough to draw to my attention at the start of Question Time, are ones with which I do not agree but which have to be argued out in the context of improvements which have to be made in the performance of the motor vehicle industry in Australia. I looked at Mr Townsend's comments just a minute ago and I will not make any blanket dissociation from them because some of them are quite sensible. For example, Mr Townsend, in referring to the kanban system, as it is called in Japan, the just-in-time system-and it has become very fashionable in the Western world to talk about just-in-time systems-said:

The kanban system is kept in place in Japan because of the strong competition between the many relatively small suppliers which seek orders from the major manufacturers, but its advantage is lost if an 'in-house' supplier is required to hold stocks.

The situation of the Japanese motor vehicle industry, structurally, is totally different from the situation of the Australian motor vehicle industry. For example, we have a great number of monopoly suppliers in the Australian motor vehicle industry as a result of disastrous past policies, in my view, in relation to foreign investment guidelines. I am not being critical of any past administrators in saying that. I think we made mistakes about the circumstances in which we allowed industries to set up in Australia without having regard to some of these factors.

All I am saying is that there do seem to me to be points-I can refer to others-made in Mr Townsend's statement which seem to have some sense about them. Having said all that, I do think that it is a counsel of despair if this Government, or any government, adopts the view that the structure and performance of industry has to be catered entirely to inadequacies in the industrial relations system. I certainly do not accept that implication in what is reported to have been said by Mr Townsend in the article in the Australian Financial Review. My answer is that I think Mr Townsend has raised some quite legitimate issues. I rather suspect, if his Press comment is right, that he raised some of them on the wrong basis, but it is a matter which I would very much like to discuss with him and others in the trade union movement before dissociating myself entirely from what has been said.