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Tuesday, 30 August 1994
Page: 559

Senator SPINDLER —My question is directed to the Minister for Industry, Science and Technology. I refer to the $1.8 billion current account deficit for July, caused largely by a three per cent rise in merchandise imports and a 3 per cent drop in merchandise exports. I ask the minister: is he aware that these figures are continuing the trend of manufactured imports rising twice as fast as manufactured exports, causing an $8 billion blow-out in the deficit of manufactures over the last three years, according to ABS figures? Should Australians celebrate, as he said yesterday, that the admittedly valiant export efforts of Australian manufacturers are being increasingly outpaced by rising import penetration? What measures, if any, is he proposing to take to address this fundamental structural problem of Australian industry?

Senator COOK —Senator Spindler deserves marks for being a constant exponent of this view of industry policy and for being one of the few people in this chamber who actually takes an interest in the subject. I would end good marks for Senator Spindler from this point on because the issues that he takes up, I would argue, are wrong in policy terms, wrong for Australia and represent, by inference, a return to the levels of high protection and an inward looking, low growth economy.   Taking a snapshot in time at any one stage in a transition process, one can make a case that the change is not working. However, when we opened the Australian economy and began to internationalise it, we knew that it was not like turning on an electric light—it does not suddenly happen that all the things that we want to see arrived at in policy terms occur. Transition involves long hard work, government leadership and industry change. We are in the midst of a transition now, so figures halfway through or part-way through the transition process do not reflect the underlying direction of change, nor do they reflect the fact that these are desirable changes for the Australian economy.

  Senator Spindler refers to manufacturing exports. For the last five years manufacturing exports have grown, year on year, at 12 per cent. Over the last five years elaborately transformed manufactures have grown, year on year, at 19.1 per cent. We are seeing massive growth in manufacturing exports from this country, and most of it in elaborately transformed manufactures. That continuing growth reflects a major restructuring of the Australian economy and our economic capacity. That is the important figure to look at.

  Senator Spindler refers to the balance of payments. I have the balance of payments figures here. Senator Spindler neglected to remind us that the export of merchandised goods went up 12 per cent in the last 12 months—a growth of 12 per cent—while merchandised imports went up at a rate of 8.4 per cent, and most of the merchandised imports are probably manufacturing imports. So Senator Spindler has not drawn the obvious comparison: on the latest balance of payments figures, manufacturing exports are growing faster.

  We have to ask what we would do as an alternative. Given what Senator Spindler has said on many occasions in the past, the only alternative is a return to high protection, a return to selective protection—to ignore the international outcome of the GATT and do industry specific things. Of course, there is no record in Australia of that type of policy working. If there is a bipartisanship in Australian politics it is that we have to make this economy more competitive by opening it up to international competition and lowering the levels of protection.

  The other thing about the balance of payments figures is that they show that we are importing a lot of capital equipment. That is a good thing because that means the productive ability of the Australian economy is going up, we are adding to our ability to produce more goods and taking advantage of the booming markets to our north. They are positive, not negative, signs.