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Tuesday, 25 November 1986
Page: 2701

Senator SIDDONS(6.25) —The Australian Democrats have circulated essentially four groups of amendments to this piece of legislation, the Bounty and Subsidy Legislation Amendment Bill (No. 2) 1986. The first one deals with the proposed reduction of bounty and I seek leave to move amendments (2), (6) and (10) together.

Leave granted.

Senator SIDDONS —I move:

(2) Page 1, sub-clause 2 (2), lines 10 and 11, leave out the sub-clause.

(6) Page 6, clause 15, lines 3 and 4, leave out the clause.

(10) Pages 7 to 14, Schedule 1, leave out the Schedule.

The effect of these amendments is quite simple; it restores the 20 per cent cut in the bounty. I believe all that needs to be said about that has been said by me in my debate on the second reading speech. The reduction of bounty represents ad hockery at its worst. It creates a great degree of uncertainty not only for the industries concerned but for all manufacturing industry in this country. It places a great question mark on the fundamental policy of the Government, which the Australian Democrats would agree to, that it is better to have bounties than tariffs because bounties keep the price level constant, whereas tariffs have the effect of increasing the local price. We would support by and large bounties to replace tariffs, but not if the Government is going to do what it is doing in this Bill; that is, arbitrarily and suddenly reduce the bounty. If the Government is going to play that sort of game, industry will have no confidence in receiving a bounty. The whole effect of industry assistance by the Government is negated by that one fact. A bounty given today and taken away tomorrow is no use whatsoever to industry; it is worse than useless. It creates great uncertainty over the industries concerned and over all other industries. The worst possible environment for industry to operate in is an atmosphere of uncertainty. Industry cannot make investment decisions if it is not sure what the long term government policy is going to be. This has a double effect. It creates great uncertainty and indecision in industry and it demonstrates the great fear that industry has always had about bounties; namely, that they are there, ready and waiting for governments to cut back as soon as they feel there is some pressure on their budgetary requirements.

For that reason we believe that the 20 per cent cut in the bounties, which was announced with the Budget, is purely to play to international money markets in the sense of getting the deficit down, and has no other purpose, as the Minister for Industry, Technology and Commerce (Senator Button) admitted when he said: `We were trying to get the Budget deficit down'. If that is not short sighted and against all the principles of long term planning, nothing is. We are attempting to bring some sanity back into the Government's initiative on bounties in place of tariffs and some long term stability in government policy.