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Thursday, 19 February 1987
Page: 273

Senator CHANEY (Leader of the Opposition)(3.04) —Opposition senators have not had a chance to read this statement and there will not be an opportunity this afternoon to debate it. Therefore, I want to make a number of preliminary comments before seeking leave to continue my remarks. There are of course a number of things in the statement which are welcome to the Opposition; there are a number of areas of shared concern, and we express the hope that there will continue to be bipartisan support for the view that Israel's right to exist must be recognised by all parties in that troubled region and also bipartisan support for the proposition that there is indeed a Palestinian problem and a need for a just and peaceful solution which takes account of the fundamental rights of the Palestinians.

There are a couple of matters in the statement which caused me some concern and to which I should like to refer at this first opportunity to comment on what the Prime Minister (Mr Hawke) has had to say. I noted with approval the Prime Minister's acknowledgment of the importance of Australia's participation in peacekeeping. The Prime Minister expressed himself as being impressed during his visit by the commitment of both Israel and Egypt to maintaining the peaceful relationship they established through the Camp David process. I note that with some satisfaction because the Camp David process occurred during the time of the Fraser Government, and the outcome of that process had the support of that Government. At the request of the participants, Australia volunteered to be part of that peacekeeping force which was established to try to ensure that the Camp David accords had a practical impact on the Middle East and would lead to peace. I note that the Prime Minister in his statement accepts credit for the fact that Australia has participated. He said:

. . . we have, for instance, contributed personnel to peacekeeping activities in the region . . .

I remember when we went through the difficult process of determining that Australian troops should be sent overseas to that troubled region, a decision not lightly taken by any government. We did so in the hope that it would amount to a substantial contribution to keeping peace in the Middle East.

Last year Senator Peter Baume led a group of Liberal parliamentarians and one National to Israel. This followed a number of visits by Labor members of parliament, and it was at the time when the Australian peacekeeping force was still involved in the Middle East. The view was put to us very strongly at that time that both the Egyptians and Israelis were anxious to see the maintenance of the Australian contribution to that force. I would like to record my disappointment at the fact that, notwithstanding the Prime Minister's endorsement of the value of our participation in these matters in the Middle East, the Prime Minister and his Government saw fit to end that contribution. I am pleased that neither the Israelis nor the Egyptians chose to make a great deal of that, but it was quite clear that that occurred against the wishes of those participating countries. I record the rather odd tone of this statement with its apparent support for our history in this region and yet this Government's failure to proceed, to deliver and to continue to support what has been a most valuable contribution to maintaining peace in the Middle East.

Senator Button —All good things come to an end.

Senator CHANEY —The Leader of the Government interjects that all good things come to an end, and nobody is suggesting that there should be a permanent Australian presence in the Middle East. But the reality is that at the time the peacekeeping force was withdrawn there were still difficulties in the region, in the sense that elements of the Camp David accord were still being worked through. It was the view of the countries concerned that the Australian contribution was valuable. Indeed, it was put to us that the Australian peacekeeping force had been unusually valuable because of its capacity to work easily with all the other participating nations. It was flattering as an Australian to be told that our Australian contribution had a peculiar value in that force because of the high regard that all the other participants had for the Australians. I record that withdrawal as one of the negatives in what otherwise in many respects has been a continuation of good relations between Australia and countries which themselves have considerable differences in the Middle East. The other matter that is worthy of comment at this stage is the part of the Prime Minister's statement that refers to his address to the World Economic Forum symposium. I understand that he was accompanied there by Senator Button. The statement says:

. . . Senator Button and I-

that is, the Prime Minister-

made a special presentation describing the significant investment and trade opportunities that exist in Australia as a result of my Government's economic policies. I outlined the strengths of the Australian economy and the principal elements of the Government's economic strategy, while Senator Button detailed the specifics of our industrial and investment policies.

I do not think the Minister for Industry, Technology and Commerce (Senator Button) has any grounds for complaint that the Opposition, either within Australia or without Australia, or indeed in any forum, has sought to obstruct the positive elements of industrial policy which go to trying to produce a more outward looking, internationally competitive and more efficient set of industries in Australia which have a chance of competing and exporting. The Opposition's continuing concern is that there remains so much to be done internally in Australia if those industry policies to which we have given support are to make sense to the people we are asking to invest in industry in Australia. Again, it seems to me to be of limited value to make speeches about the desirability of having an internationally competitive economy when we have interest rates that are something like twice the average that people are likely to see overseas and taxation rates which many business representatives say are simply not competitive. For example, one industry leader suggested that a return of 25 per cent in Australia was required for the equivalent of an after tax return of 14 per cent in Hong Kong.

Senator Button —That would probably be right.

Senator CHANEY —Senator Button says that that would probably be right. I make this point because it is necessary to expand the area of bipartisanship in this matter rather than diminish it. The point on which we are able to get any clear acknowledgment from the Government is that all of these areas-interest rates, inflation, movements in wage rates, productivity, taxation and the rest of it-unless one can say that Australia is offering a genuinely competitive situation, a great deal of the efforts which are being made by the Government and which have had the support of the Opposition are simply irrelevant to our future welfare. The Prime Minister is again talking about the strength of the Australian economy and our capacity to attract international investment. I use this opportunity to remind the Government that it has a huge distance to travel if it is to provide a genuinely competitive international environment for Australia.

We talk a great deal about the straight labour costs. The Government is at present arguing this matter before the Australian Conciliation and Arbitration Commission, where it has had a falling out with the Australian Council of Trade Unions and where there has been a clear breach of the accord because of differences between it and the trade union movement about what the economy can afford. It is important to note that if one looks at the costs of most industrial establishments one finds that direct labour costs tend to be a relatively small percentage of the total costs. Tax costs, capital costs, material costs and transport costs impose burdens which are simply heavier in Australia than in the countries with which we are competing for investment. I express some disappointment that the Government's overseas rhetoric in these matters is not matched by a comprehensive policy approach to deal with these other areas of policy which are so fundamental to our economic recovery.

That moves a long way from the Middle East which is, of course, the prime issue dealt with in the Prime Minister's statement. In this area, as in other areas, the Opposition makes no attempt to create artificial differences between us and the Government. I am sure that there is a clear recognition, both internationally and within Australia, that basic support for the existence of the state of Israel, for example, and a basic concern that there should be a fair resolution of the problems and difficulties facing the Palestinians, are continuing strands of policy which, one would hope, would continue to maintain considerable bipartisan and non-contentious status in this country.

However, I believe that the economic side of the statement is one which has all the hallmarks of the deficiencies of this Government. It has had the great benefit of a co-operative Opposition in such major matters as floating the currency, deregulating the financial market, adopting a more open approach to the question of tariffs and an approach to industry policy which is traditionally difficult in Australia but which has been supported by us; yet it has totally failed to acknowledge the need to provide that genuinely competitive framework for our industry which would give meat to the skeleton which is described by the Prime Minister in his speech. I seek leave to continue my remarks later.

Leave granted; debate adjourned.