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Wednesday, 4 May 1994
Page: 233

Senator SPINDLER (5.45 p.m.) —The Customs Tariff Amendment Bill 1994 has four purposes. Its first purpose is to designate Eritrea as a developing country qualifying for concessional rates of duty under the Australian tariff preference system.

  Secondly, the bill abolishes the import duty on so-called reference materials—materials that are used to establish standards for goods produced in Australia. Both of these measures are welcomed.

  The third measure is the validation of an increase in the rate of customs duty payable on aviation gasoline and aviation kerosene. This measure raises a number of questions. First of all, it is an attempt to recoup from the industry the cost of the provision of safety measures at airports, but at this stage it only recoups a very small part of the cost. I understand that negotiations are still continuing with the industry. This measure recoups something like $4.5m, whereas the total cost of these services provided to airports at Commonwealth expense is of the order of $46 to $47m. No doubt some further adjustments will be made in future.

  A matter of concern that needs to be raised is that the increase in the rate of duty payable on aviation gasoline will fall far more heavily on communities in remote areas than on travellers between metropolitan centres. My concern is a little assuaged by the fact that we are looking forward to another bill to be introduced by the government called the Excise Tariff Amendment Bill which will be before the Senate shortly. That bill both increases and decreases in various measures the excise duty on aviation gasoline. The Australian Democrats will be watching very carefully what is being done by the government in a way to ensure that people in remote areas of Australia are not disadvantaged by these measures.

  The fourth measure that this bill seeks to address is to replace the value added bounty on textile yarns from July 1995 with a 5 per cent tariff. I find it a little difficult to follow Senator Short's reasoning when he says that this represents an increase because the bounty is 15 per cent and, while it is certainly going to be abolished, it is being abolished in anticipation or parallel with this particular measure. It is only being abolished because it is being switched to a tariff. Therefore, the comparison between a zero bounty and a 5 per cent tariff is, with respect, not very factual.

  We are looking at a reduction in protection from a 15 per cent bounty to a 5 per cent tariff. In itself, a 5 per cent tariff is not of great moment. It is really little more than a cost recovery measure for the Australian Customs Service. As most of the yarns that are being imported are used in textile manufacture in Australia, we do not oppose this low level of protection. We have had consultations with the industry on this matter.

  I take a strongly opposing view to that taken by Senator Short, namely, as to the unilateral reduction in protection of Australian goods. In this particular industry this has meant that currently two-thirds of the textile products sold in Australian shops are imported, and one-third only is produced in Australia. Going back only five or six years that proportion was reversed: we produced about two-thirds of all goods sold in that bracket in Australia and imported only one-third.

  I think that we would all agree in the long term we must reduce our involvement in highly labour intensive industries and concentrate on the higher quality end of the market. Therefore, I had great pleasure two or three weeks ago to visit the Fletcher Jones factory in Warrnambool. That factory has been struggling under the adjustments undertaken by the government in the past few years in the TCF industries. However, that factory is now concentrating on reviving its old tradition of highly customised, high quality products, also emphasising the fact that they are Australian products. I believe that Fletcher Jones has turned the corner.

  I think that it is a good example of parts of the TCF industry which, after suffering considerable pain, have been able to adjust. The pain need not have been as deep and as sharp as it was. Hundreds of jobs were lost for a number of years and will be only partly recouped in Warrnambool. This has knocked the local community to such an extent that unemployment rates have been of the order of 16 to 18 per cent compared with 10 and 11 per cent in metropolitan areas.

  That could have been avoided if the TCF plan had taken account of the need to change the shape of the industry, and that need still exists. In our budget proposals we have suggested that the government should allow a further $20 million of funding to the TCF Development Authority. It is quite clear that while some of the larger operators have been able to benefit from the restructuring plans and from the funds available under those plans, many small operators have not done so as yet. Yet the plan is reaching a point where most of the funds have been committed.

  It raises an interesting principle. Here at least we have an industry that has had a plan. There are a number of other industry sectors which have been affected by the government's policy of opening up Australia unilaterally to world markets. Although other countries are protecting their industries through tariffs, quotas, subsidies, bounties and so on, and indeed by other non-tariff measures, the government has decided to throw open Australia and let those who can swim do so, and let the others sink. It is unfortunate that Australia has followed such an utterly stupid policy when other countries have taken a more strategic approach. Those countries have developed sectoral industry plans which rely on a careful assessment of the prospects of each industry, of the opportunities in domestic and overseas markets which, to my mind, and to the mind of any sensible person, would be an intelligent and strategic approach to the development of industry in Australia and in safeguarding jobs.

  This is my first opportunity to make a brief comment on the white paper which contains a number of measures that one must applaud. I mention briefly the reduction in the threshold for research and development taxation deduction purposes from $50,000 to $30,000—a measure that was contained in the Australian Democrats' budget proposals. One must applaud a few such measures, such as the extension of the EMDG scheme to the tourism industry, although at only half the rate of reimbursement as applies to other industries.

  However, the white paper has once again ignored the strategic opportunities offered by sectoral and geographic regional plans, and by and large has relied on `churning' the unemployed through training measures. Apart from that, it says that industry must help itself and the government will sit back and twiddle its thumbs and let them take such a course. However, we feel very strongly that the Australian government is responsible for creating the conditions which would enable our Australian industries to take full advantage of the growing world economy and to provide jobs for our workers.

  I believe my remarks stand in stark contrast to the statements made by Senator Short. He seemed to be applauding the free market sink or swim policy which envisages the government having no responsibilities in this field, except to cut costs and provide no infrastructure and certainly little in the way of services to industry or to the community generally. Having had current consultation with the TCF industry, I would point out that the Australian Democrats will be supporting the bill.