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Tuesday, 3 May 1994
Page: 81

Senator MINCHIN (7.02 p.m.) —I move:

  That the Senate take note of the document.

I move this motion with pleasure as a South Australian senator and obviously one representing a state which has two very significant manufacturers. This report is an opportunity to congratulate the automotive industry on its very significant progress in recent years. As the report notes, there was a 17 per cent increase in productivity in this industry in 1993 and a 31 per cent increase in productivity over the last two years, which is a tremendous result and a great credit to the industry. It just shows what can be done when the industry is faced with tariff reductions. In the last six years the industry has had a tariff reduction of one third and it has met the challenge.

  For all the doomsayers who said the industry would go down the gurgler because of a reduction in tariffs, this result is the answer. It is to the government's credit that it bit the bullet on tariffs because it had confidence that the industry could respond. The report notes that the quality of Australian produced motor vehicles has increased significantly. Everyone who drives an Australian car would recognise the fantastic increase in quality that the companies have achieved, particularly Mitsubishi and General Motors in my own state. The quality of their products and the workmanship of Australian workers is to be commended.

Senator Teague —It is much better.

Senator MINCHIN —Exactly. They are producing world quality cars. It is important to note that, when some of our Australian industries are exposed to competition and face the real world, they can respond. Workers and management can respond to produce real quality products. It demonstrates the virtues of freer trade and greater competition. The results in this industry, as highlighted in this report, are a classic example of that.

  Of course, the real winners—the people about whom we should be most concerned—are Australian consumers. They are getting a better product for their money. The report notes that car affordability has declined over the past 10 years and is continuing to decline, partly due to the recent depreciation of the Australian dollar. That must be a matter of considerable concern. The report notes that is a matter with which the industry must grapple if it is to overcome the fact that we have one of the oldest car fleets in the world.

  Most importantly, on page 9 the report notes the role of the government. It says that governments determine a significant part of the cost structure of the industry through taxing charges and the cost of government-owned enterprises in transport, power, et cetera. The report says that it is just as important that efficiency gains are made and passed on in this area as in any other. To that I say, `Hear! Hear!' I hope that the government takes note.

  Obviously this body will understate the importance of what it is saying. However, as we said today in the MPI and in commenting on the white paper on employment, nothing could be more important than the government taking careful note of the impact it has through its taxes and charges and its role in the ownership and regulation of various instrumentalities which affect the costs of production of things like motor vehicles. That is how we will get gains for consumers and employees in Australia.

  So I hope that the government takes careful note of what the industry says because, as tariffs are being reduced to 15 per cent by the year 2000, it will be critical that the government matches those tariff reductions with reductions in its effect on the cost of production, particularly in the motor vehicle area.

  Debate (on motion by Senator O'Chee) adjourned.