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Monday, 1 December 1986
Page: 3049


Senator RICHARDSON —Is the Minister for Industry, Technology and Commerce aware of a report titled `Manufacturing Industry Productivity Growth' released yesterday by the Bureau of Industry Economics? According to a report in today's Australian, the BIE has warned that thousands of jobs in the manufacturing sector are at risk unless the Federal Government moves to improve productivity and expand the market for manufactured goods. Does the Minister agree with the conclusion of the report that productivity growth is an important path to international competitiveness and hence to economic and employment growth? What is the Government doing to encourage this?


Senator BUTTON —I am aware of that report, or a series of reports, which was made public yesterday. Those reports are based essentially on 1981-82 data. A lot has happened since then, of course. Nonetheless the conclusions reached I suppose are of very considerable relevance to the situation of manufacturing industry today, although the revelations are not particularly new or startling. The study is important in explaining the basis for past productivity growth and in indicating broad directions for future policy initiatives. There are, in fact, four studies with which the BIE has dealt. One is on manufacturing industry productivity. A second draws the conclusion that if future productivity trends follow those of the 1960s and 1970s, average annual rates of growth and the volume of production would need to be more than 4 per cent a year just to maintain or raise manufacturing employment. A third study discusses the technological progress made by Australian industry during the post-war period. The fourth deals with the question of productivity and economies of scale.

Senator Richardson has asked what the Government has done by way of response in relation to the broad conclusions indicated by the BIE study. First, let me make the point that subsequent to the BIE study we had the substantial depreciation of the dollar, which raised the price competitiveness of Australian manufacturing industry. There are a number of other measures which are available in order to take advantage of that change and to help capture new overseas markets. Some of those things include the substantial tax concession for research and development, a revised export marketing assistance scheme, the availability, for the first time, of venture capital and development finance through the management investment companies scheme, the Commonwealth Development Bank and the Australian Industry Development Corporation, and the development of the national industry extension services which are more devoted to quality and other issues associated with competitiveness other than price.

Inevitably, as the BIE study points out, changes in many sectors will involve new labour saving technologies. This is inevitably worldwide. I think the Australian Government, business and the trade union movement have to grasp the need to make substantial improvements in produc- tivity in order to raise competitiveness in world markets and to expand Australia's share of world trade. There has been an enormous change in attitudes in relation to those issues in the last two or three years which is widely recognised throughout the business community and in industry. Senator Newman is shaking her head. I hope it does not fall off.