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Monday, 20 June 1994
Page: 1702


Senator WATSON —I direct my question to the Minister representing the Treasurer because of his interest in and responsibilities for certain trade matters. I refer to the government's frequent direction to business to export. Given the considerable risks in carrying on a business outside Australia, why does the government create barriers? For example, treating certain foreign earnings less favourably than those derived from Australian sources; the cascading effect of business indirect taxes and other user charges such as public sector exploitation of natural monopolies as revenue sources; and Australian representatives stationed overseas who are frequently at a significant disadvantage compared with expatriates from other countries. Will the government examine each of these impediments with a view to their removal so as to make Australian goods more competitive on the export market?


Senator COOK —The Senate would know, as my colleague Senator McMullan, the Minister for Trade, has often said, that Australian goods in overseas markets are increasingly competitive and are winning, increasingly, a larger market share. One only has to look at the composition of our export table. It is but a few years back that we were a major exporter of agricultural and mineral commodities and a virtual non-exporter of manufactured goods and/or services. Looking at that table, one can see now that we have a huge growth and a huge expansion in our export of manufactured goods, so much so that it outranks the value of agricultural goods. Significantly, the manufactured goods part of our export composition is not in low-end manufacture but in what the statistician calls elaborately transformed manufactures; that is to say, the most sophisticated manufactured goods are the ones that are growing most in export. Indeed, we are a massive exporter of services and our services export account is in balance.

  Taking that perspective, and referring to the question that I have been asked, the government of course keeps under review all of the elements that are necessary to make this country competitive. We have a strong industry policy platform; we have a strong commitment to ongoing micro-economic reform to increase greater efficiency; and, from time to time, we include issues of taxation in the examination of those sub-elements of our economy. One pitches those tax issues on the basis of looking at an all-round commitment to the economy. It is not looked at one-dimensionally through an export window, but it is looked at multi-dimensionally, including through the social policy window and other windows for a mature and balanced tax system.

  Given the growth of exports, given the absolute growth of manufacturing exports and the increasing competitiveness of the economy, while I note that from time to time we have received complaints along the lines that this question refers to, nonetheless, it is wrong to pretend that Australia is not a competitive economy. It is, and it is an economy that is increasingly competitive. That is a statistical fact. It is an economy that is winning a greater share of the international market. That is also a statistical fact.

  Those elements have to be borne in mind when considering other issues because there will always be a lobby for no or zero taxation. That means no or zero other benefits from the central government in the form of welfare payments, education, health and a myriad of defence and other things that come from the Commonwealth. So one needs to keep these things in balance. While I acknowledge that there is a zero tax lobby out there, and sometimes there is the justification of exports to support it, nonetheless, we believe that our tax settings are appropriate.