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Thursday, 5 May 1994
Page: 348

Senator CHAPMAN (4.03 p.m.) —The Report on the state of the automotive industry 1993 presented by the Automotive Industry Authority is the report presented annually by this government instrumentality on the progress being achieved under the auspices of the government's automotive industry plan towards greater efficiency, productivity and competitiveness on the part of the Australian automotive industry. In the report this year it is pleasing to see that the Australian automotive industry is making further progress towards the goals which the government has set for it in its automotive industry plan—obviously goals which the opposition also would seek to have the industry achieve—but there are also shortcomings highlighted in the report.

  Firstly, I will briefly deal with some of the good things about the Australian automotive industry that are contained in this report. The first thing to note is that in 1993 there was a 17 per cent improvement in the industry's productivity overall. That means that over the past two years—1992 and 1993—the combined improvement in productivity has been of the order of 31 per cent. Productivity improvement was a desperate need in the Australian automotive industry if it was ever to become competitive on an international basis.

  The report also indicates that employment levels stabilised during 1993. Another positive note is that the quality of Australian motor vehicles continues to improve. The report states that local models made further gains in quality during 1993. That improvement in quality was not only with regard to the passenger motor vehicle producers—the manufacturers—but also the manufacturers of components for those motor vehicles. The report highlights that both of those factors contributed equally to fault reductions which have been identified since 1988.

  Perhaps not quite so encouraging is the fact that the price of vehicles rose sharply in 1993, and that price rise outstripped both the increase in the consumer price index and the increase in average weekly earnings, with the consequence that car affordability declined. The result of that was that the purchase of vehicles by private buyers, as distinct from fleet buyers and government buyers, fell for the third consecutive year.

  This is of concern because if the industry is to have a successful long-term future, then obviously private purchases must remain a significant segment of the market. It is important, therefore, that manufacturers make every effort to contain cost increases. The government has a role to play in that regard as well. Governments do play a significant part in the cost structure of the industry through taxes and charges and through the cost of services such as transport, electric power provided by government-owned enterprises. As the report itself highlights, it is important that efficiency gains are made in those sectors as well as in the automotive industry itself, if price rises are to be retained at the minimum level possible.

  I am pleased to see that the authority has now initiated a program to monitor progress in the area of government taxation and the costs imposed by services provided by government instrumentalities, and that it is going to report the results of that monitoring on a regular basis. So we will have highlighted in future reports the impact of government charges and the provision of services by government instrumentalities with regard to their effect on motor vehicle manufacturing.

  The final issue I want to address is another negative and that is the concern which the authority raises about deteriorating industrial relations in the industry. The report indicates a significant increase in industrial disputation during 1993 compared with earlier years. This is certainly a matter for regret because, as the report indicates, if there is to be sustainable improvement in both productivity and quality in the industry it is important that a peaceful industrial environment prevails in the industry. The report indicates that for the first time since 1989 the number of working days lost per thousand employees exceeded that for total manufacturing. So that is an area that requires serious attention which this government completely ignores in its approach to industrial relations.

  Question resolved in the affirmative.