Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 20 June 1994
Page: 1756


Senator MARGETTS (6.54 p.m.) —The Greens (WA) support the changes to the pooled development funds contained in the Pooled Development Funds Amendment Bill 1994. In principle, the pooled development funds are an excellent idea. We applaud the principle of supporting small and medium businesses. As the government knows, we put forward a number of ideas along these lines in our budget submission. While we support the pooled development funds in principle and have no problem with reducing taxes on investments and requiring more funds to be invested in small and medium enterprises, we feel that the way the government has set up the pooled development funds leaves much to be desired.

  I frequently speak on problems in the areas of international trade, workers, the environment and keeping any measure of influence on our economy. Development of a viable economy based on small and medium enterprises owned and controlled locally or within the region represents an answer to many of these problems. It is already well known that most of the employment gains occur through small and medium enterprises. Most people work in small and medium enterprises, and most self-employment is on a fairly small scale. These people live in their communities and so understand that what they do affects their communities. The health of their communities has a direct impact on them. Social interest and personal economic interest most closely coincide. If an enterprise abuses or exploits the community, the community is able to make its views and needs felt. In addition, this is where the famous economies of scope, the flexibility to meet specific needs, take over from economies of scale.

  I am not saying necessarily that all small enterprises are good in their labour practices; however, I am suggesting that they can be made to be more responsible for what they do within their local community. This can take the form of finding unique solutions to local problems, using local materials and skills to meet specific needs in innovative ways. As communities are not informationally or economically closed, they have the ability to communicate or market these innovations—an ability which is often lacking if one must compete on a global basis to gain entry to a market at all. Therefore, the local sphere is properly the ground where innovation which may be applicable more broadly is initially developed.

  In order to have this happen, there must be a framework where small and possibly innovative enterprises can get access to capital. Ideally, this should be local, since it is a local framework which is needed for proper assessment of the potential of such an enterprise. If we leave it to the big money managers, they will stick with conventional approaches that emphasise safety in all cases and profit maximisation according to rules which see much of the money tied up in land speculation or big business. In many cases, this has meant that development funds, such as superannuation funds, have concentrated investment in a smaller and smaller number of areas.

  For pooled development funds to work most effectively, they should be under the control of the local community and they should specifically encourage certain types of enterprises, such as those which replace imports to the region. It is ridiculous to have Darwin importing bricks from the Perth area. Clay is not a unique resource. Small businesses such as Broome Bricks have found such a lack of local sourcing that they now supply bricks from Karratha to Darwin. There is no reason why Darwin cannot have its own brickworks.

  It is both environmentally and economically stupid to cart bricks halfway across the continent. Bricks are not light or of high value, and petroleum is an import. It does not make bricks in Darwin cheaper or benefit anyone except the brickmakers of Perth. This is just one example of poor regional development through poor local sourcing. Pooled development funds could be used to support sanity in development and to improve the situation for regions, creating jobs as they diversify the economy. It would also benefit the environment if transport were minimised and the consequences of actions taken for an area were felt within the area.

  In this and other amendment bills, the government has shown its willingness to address a number of problems with pooled development funds. We call upon the government to take a broader approach, to transform the pooled development funds into a truly creative tool and to support them to the extent that they have a real impact on regions around Australia.