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Wednesday, 18 March 1987
Page: 878

Senator CHILDS —My question is directed to the Minister for Industry, Technology and Commerce. Has the Minister's attention been drawn to an article in today's Australian Financial Review entitled `Concerted effort needed to turn the $A depreciation to advantage'? Does the Minister agree with the conclusions of the survey by the National Institute of Economic and Industry Research, mentioned in the article, that the domestic market focus of foreign-owned enterprises in Australia had `greatly inhibited a speedy export-oriented investment response to devaluation'? Can the Minister outline the action that the Government has taken and is proposing to take to persuade foreign-owned manufacturers to invest for a concerted export drive?

Senator BUTTON —Senator Childs's question might be put in another way-why has not the J-curve operated as quickly in Australia as some people thought it might? That is another way of putting the same question.

Senator Puplick —He was not game.

Senator BUTTON —He is not a man lacking in courage. That is a very rude remark to make about a senator. I am aware of the article by Michael Stutchbury in the Australian Financial Review today. I have not seen the study to which it refers, but according to that article the study by the National Institute of Economic and Industry Research suggests that foreign ownership of Australian industry has been a factor behind Australia's comparatively poor investment in export activities. I think a variety of factors are responsible for poor export performance. Most of them can be associated with the policies of former coalition governments which were wimpish about restructuring industries and saw the solution to industry problems in made to measure tariffs for every industry which asked for them. The Institute's survey of 45 larger companies found that only 27 per cent of the foreign owned manufacturers surveyed saw investment opportunities in export, compared with 66 per cent of Australian owned companies. All of that 66 per cent referred to export potential as a spur to investment.

In some ways, I would agree with the Institute's view that the domestic market focus of foreign owned enterprises in Australia has inhibited a speedy export oriented investment response to the devaluation. This focus on the Australian market has not been confined to foreign corporations trading from Australia. There has been a past preoccupation with domestic markets rather than world markets; not just foreign companies per se. I refer to industry policies of the past which have encouraged that sort of attitude.

The notion until two or three years ago of what I would call good corporate citizenship by foreign companies in Australia was totally absent from government policies and the environment for industry set by government. Now that foreign companies operating in Australia are increasingly having a different attitude to these things, I would hopefully suggest that the improvement in manufacturing exports shown in yesterday's figures is some evidence of that, as, it is evidence, similarly, of better performance by Australian companies. That is all I can say to the honourable senator at this stage. Some of the implications are right and some are not.