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Wednesday, 4 May 1994
Page: 231

Senator SHORT (5.29 p.m.) —The Customs Tariff Amendment Bill 1994 is an omnibus bill which makes a number of amendments to the Customs Tariff Act 1987. These amendments are largely of an administrative nature or, alternatively, provide the legislative framework for policy measures which have previously been announced.

  As I say, this is an omnibus bill; it deals with a wide range of matters. I wish to dwell on one or two of them. My colleague Senator Ian Macdonald, who is to speak later in this debate, will deal with one or two issues as well. In particular, he will deal with the excise on aviation fuel.

  The provision in the amending bill that I wish to comment on particularly relates to the implementation in this bill of one of the measures announced in the government's March 1991 industry statement, which was called Building a competitive Australia, one of the 23 statements that the government has now made to produce solutions to Australia's ills—ills which, I might point out again, are essentially of the government's own making.

  This afternoon we saw the Prime Minister (Mr Keating) deliver a new white paper called Working Australia. That is the 23rd in the series. Going back a couple of years and four or five white paper statements, we had this March 1991 statement, which was called Building a competitive Australia and which, like all the other statements that the government has made over its last 10 years, has virtually sunk without trace.

  The 1991 statement by the government modified the textile, clothing and footwear industry plan, which had been developed in 1986 to encourage the rationalisation of the TCF industry and the development of firms which are efficient and internationally competitive. Key elements of that plan included an industries development program, reforms to import arrangements and a program to assist employees displaced through restructuring. That 1986 plan was reviewed in 1990 and subsequently modified in March 1991.

  The modifying measures that were announced in that March 1991 statement are to be phased in by 1995 and will conclude in the year 2000. Those measures included the abolition of TCF quotas by 1993, the phase-down of tariffs to 25 per cent by the year 2000, some extra funding for what was called the industries development strategy, the introduction of an import credit scheme and, finally, the abolition of bounties on 1 July 1995 and their replacement with a five per cent tariff.

  The bill before us today has a provision which seeks to implement that last measure by amending the principal act to provide for a five per cent tariff on textile yarns. The five per cent is to be applied to all imports and, as such, the Australian system of tariff preferences, which gives preferential tariff treatment to developing countries, will not apply in this case.

  The opposition does not oppose this measure—as I say, it is simply implementing a policy decision of three years ago—but I point out that this provision means an increase in the level of protection being afforded to the production of textile yarns. At the moment, the bounty, which is currently 15 per cent of value added but which is to go to zero as of 1 July, will be replaced with the five per cent tariff. So we are replacing a zero bounty payment by a five per cent tariff. That constitutes an increase in the protection accorded to the industry. It is, therefore, contrary to the policy trend of this government and the policy of the coalition over recent years to progressively reduce the level of tariff assistance in the process of making Australian industry more competitive and more productive. I would want the Senate to note that.

  On the other hand, we do not oppose the measure. It has the support of industry—it would be strange if it did not—and it is a central plank in the TCF plan to which industry has been working. What it draws attention to is the disastrous lack of progress there has been in this country in the last few years on the government's part so far as micro-economic reform is concerned.

  If we look carefully at what has happened in the area of micro-economic reform we will find that, even by our own standards, it has proceeded as at a snail's pace. When we compare it with what has been happening in other countries, particularly our major trading partners against whom we have to compete if we are to have the development of our export markets and export growth and the correction of our chronic balance of payments problem, we can see that in order to fix those things reform of our infrastructure industries is absolutely essential. We have to do it better and faster than our competitors. Indeed, compared with the movement in those areas by our competitors, our progress can be described only as glacial.

  Fundamental to any sustainable economic and employment growth is competitiveness and flexibility. It is somewhat ironic in that sense that we are debating this customs tariff bill on the day when the government has produced what the Prime Minister himself claims to be the most important statement by this government since it came to power in 1983. Yet he produces a statement today which in no way tackles this fundamental problem of the need for reform in our infrastructure industries.

  The privatisation push is absolutely essential if we are to increase efficiency and productivity in many areas that are now owned by government business undertakings. That asset sales program is in an absolute shambles. It has failed to reach its targets since its inception six years ago. Some assets nominated for privatisation as long ago as six years, when the program started, are still on the books for sale. The Australian taxpayer, therefore, still controls an airline, a telephone company, a bank, an insurance company, a rail corporation, a car leasing service and a shipping line—all businesses which should be owned and run by the private sector if we expect to have any chance of getting the efficiencies and productivity growth that we need.

  The government's commissioned report, known by the name of its author as the Hilmer report into competition policy, found that numerous areas in the public sector are in urgent need of reform—areas from law to electricity, and beyond. The public sector in Australia has largely escaped the need to compete. I certainly acknowledge that there have been significant improvements in some areas of public sector activity. I think the government's introduction of the financial management improvement programs and the like and some, but by no means all, of its rearrangements of the public sector have been positive, but a lot of them also have been negative. The fact remains that the public sector in Australia has largely escaped the need to compete. It is very interesting to see the movement by several of the state governments, under the control of Liberal or coalition party administrations, to implementing at rapid speed the many long overdue reforms in the public sphere.

  I regret to say that Canberra has been very slow indeed to respond and follow the lead of the states. A very important case in point was the decision last year to abolish compensation to states that privatised their corporations. That decision sent all the wrong signals to the states on this very important area of reform. The number one priority for reform is the area of industrial relations and the need for flexibility. The government's moves in that area—quite contrary to what is needed—have been retrograde. The government has gone backwards and has overridden attempts by the states to provide flexibility and deregulation. That has been a major setback for competitive reform of the Australian labour market.

  There is a long overdue need to make government regulations and legislation much more user-friendly and to make the law easier and clearer to understand and comply with. Instead, this government is seeking to increase the cost and complexity of the law. The recent changes to the fringe benefits tax are a classic example. The changes are enormously complex and very difficult to understand. The changes are very costly for firms to administer. The changes go absolutely in the wrong direction if we are looking seriously at increasing the competitiveness and the efficiency of Australian industry. The government keeps saying in its rhetoric that that is its aim, but when we match the rhetoric against performance we find a yawning gulf.

  The pressing need for microeconomic reform seems to have gone completely off the government's agenda for a variety of reasons. There are very different viewpoints within the government on this matter. The government Left is resisting these changes. This imposes a very heavy cost on the prospects and potential for growth—not just of our economy but, more importantly, of jobs in Australia. It is hypocritical in the extreme for the government to bring down white papers when it is not prepared to adopt measures that are necessary if we are seriously going to get Australia and Australians back to work.   The opposition does not oppose the measures in this bill. Senator MacDonald will deal with one or two of the other issues—in particular the excise on aviation fuel. There are several other very interesting measures that are not largely important, but they are of an interesting and desirable nature. I refer particularly to the removal of duty on reference materials which are, of course, materials with an accurately known composition and which are used as the standard against which other like materials and processes are measured or marked. At the moment those reference materials are dutiable, and this bill abolishes that duty. I will not go into the details of the other desirable moves because collectively and individually they are not of great moment. They are all largely of an administrative nature or, alternatively, provide the framework for policy measures which have been previously announced.