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Tuesday, 10 May 1994
Page: 482

Senator COLSTON —I direct my question to the Minister for Small Business, Customs and Construction. My question relates to an initiative in last week's white paper, Working Nation, namely, the government's announcement of assistance to the Australian construction industry in the preparation of bids for major infrastructure projects in Asia. Is the minister able to provide information to the Senate on how this initiative will operate to the advantage of Australian companies?

Senator Ian Macdonald —I would say no.

Senator SCHACHT —Only Senator Ian Macdonald could be negative. Only he could say no to any positive move to improve Australia's trade outlook and it is typical of him. The only amazement I have is that he is still on the front bench.

  One of the major initiatives in the industry paper last week was the announcement of a $12 million program of loan funds over four years to the Australian construction industry to form single consortiums from Australia to bid for some of the major infrastructure projects in Asia. We anticipate being able to fund 24 of these consortium bids at about half a million dollars each over the next four years. It will be on a risk sharing basis with the consortium concerned. If the consortium is successful, the public money will be repaid and put back into the fund to pay for further funding or future consortiums.

  We point out that estimates anticipate that until the end of this decade infrastructure projects in Asia will total around $A600 billion, and some people even estimate it going close to $US1 1/2 trillion by the middle of the next decade. So there is to be a major building construction program in that region, probably the biggest in the world's history. Until now, Australian companies have been bidding against each other as well as against companies from overseas, despite the fact that our construction industry is, in most aspects, world best practice, innovative and using the latest technology. But often in these countries we find that if Australian companies are bidding against each other, a company from another country—a sole bid with the support of the government of that country—comes through the middle and wins the project. Therefore, we believe that by encouraging consortiums of Australian companies to come together to bid and prepare the feasibility study, we can enhance our chances of winning some of these major projects.

  This consortium idea is not about picking winners. It is an idea that came from the industry itself. Mr Duff, in particular, from Fletcher Construction, prepared a report on this as part of the construction industry reform process over the last two or three years. This is a major initiative that will be advantageous to the Australian construction industry—an industry that has the potential to earn a lot of export dollars for Australia when it starts winning some of these major contracts that are now available in the region.