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Tuesday, 15 October 2002
Page: 5137


Senator COOK (3:23 PM) —The report of the Joint Standing Committee on Foreign Affairs, Defence and Trade has been adequately described by my colleague opposite, Senator Ferguson. It ought to have commanded far more attention than it did. The purpose of the report is best set out in its title: Enterprising Australia— planning, preparing and profiting from trade and investment. As anyone who looks at the balance of payments or Australia's trade situation knows, an imperative to greater wealth creation in this country is that more Australian companies export. If more Australian companies are to succeed as exporters, they need to be globally competitive. Characteristic of a globally competitive company is a focus primarily on the world, not on the domestic market. They have a high incidence of innovation in their company structure and a high investment in research and development. They recruit skilled labour that has been well educated, they are able to be flexible and adaptable to new market situations that they confront in the world and they penetrate markets successfully.

This is not some sort of dry academic exercise. This goes to the engines that drive economic growth, improve living standards and create jobs for ordinary Australians. From that point of view, this is an extremely worthwhile report. I congratulate Mr Prosser of the committee at that time on promoting the investigation. Having said that, Senator Ferguson has also referred to the reasons why the committee did not take this report further; certainly the election was a big factor and a new committee was another factor. The real reasons—the poor response to this inquiry, the quality of the submissions garnered by the inquiry and, indeed, the advent of the Blackburne report—are all adequately set out in this document. However, we could have focused more on the findings of the Blackburne report and the implementation of them. But that is not a reason to criticise the effort that has been undertaken here.

I want to say a few words about some of the issues covered in this report. In 1994, when the Australian Manufacturing Council existed and created a forum for all the players in the Australian manufacturing industry to examine the issues in their sector and to seek remedies from government to improve that industry sector, which is vital for jobs in Australia and vital for our innovative edge in the world, a study was undertaken headed `Leaders and laggers'. It examined the characteristics of what makes success for Australian companies and looked at successful exporters and manufacturing enterprises. It also looked at the characteristics that are true of companies that do not succeed, and these were the laggers.

Overwhelmingly, the emphases of the leaders were, as I have said, a global view of the market, investment in research and development, capacity for innovation and a general outward drive to capture new market prospects. The characteristics of the laggers—those that did not succeed—were a preoccupation with the level of taxation they might pay, difficulties with their industrial relations system as they managed it in-house and a series of navel gazing issues of that nature which meant they were not focused on global opportunity; they were focused on what was going wrong with their company and, therefore, did not think about how to turn the company into something that was going properly and correctly.

That was an important study because it looked at real life experience of successful Australian companies, and it finds some echoes in the document that we have today. It is not surprising that there is a continuity of theme of those key issues. One of the weaknesses in this report is that it does not address issues that have occurred since the advent of the Howard government. For example, it does not adequately deal with the reduction in the research and development tax concession, which went down in 1997 from 150 per cent to 125 per cent. R&D is a driver of export growth and international competitiveness. The fact that there has been less incentive and less take-up of research and development means that we are now becoming a lagging nation under that demographic.

The report did not deal with the impact of the capping of the Export Market Development Grants Scheme. We offered a scheme to encourage Australian companies that are mostly small to medium sized enterprises to go overseas and examine the market. That scheme has been capped, so not all those companies that want to go and examine the market can get access to the scheme or, if they do, it is at a lesser level. Under the previous government it was open-ended, so all players that wanted to be exporters could be and not just those that were ahead of everyone else in the queue and lucky enough to get a grant. It did not examine the abolition of the International Trade Enhancement Scheme, which encouraged Australian companies to get into the international market. Nor did it look at the abolition of the Development Import Finance Facility, which ensured that Australian aid spent abroad also created opportunities for Australian business.

The report did not look at the abolition of support for the business angels program, where experienced entrepreneurs were being matched with small high-tech start-up businesses, nor at the abolition of the Australian Manufacturing Council, a body that I think has played a magnificent role in resolving problems that confronted the growth of the Australian manufacturing sector and is indeed one of the reasons why we now have a vibrant export sector whose total value outranks that of the agricultural sector in export earnings. Nor did it look at the cessation of a $20 million operating subsidy to the Commonwealth Development Bank for small business financing, an area in which the bank, as an expert lender in this field, is ideally placed to make assessments about the competitiveness of potential enterprises. That $20 million operating subsidy was an essential way of levering those small enterprises into something better.

The outsourcing of government IT, at a cost to taxpayers of several hundred million dollars—which is something that this government has done—has meant as well that we have not kept in-house the possibility of structuring a major IT provider in this country and rather have brought in from overseas foreign IT providers to meet our needs. The freezing of the R&D Start program in early 2002, with the government cancelling new applications from 115 businesses, was the wrong signal to send. We are trying to encourage people to be more innovative, to use R&D. To cancel the R&D Start program early this year was the wrong signal for industry to receive. The abolition of the Printing Industries Competitiveness Scheme occurred ahead of schedule and, more importantly, the government's own resources were cut back, meaning its ability to pick trends in this sector was diminished and its ability to find solutions and to provide the necessary support programs was diminished.

This report looks at Singapore and Ireland as two tigers—one a Celtic tiger and one an Asian tiger—that have very active industry policy agencies at government level. The cutback of 30 per cent in the department of industry's funding over four years—the largest fall in any spending of any department— and a cutting back of 10 per cent in staff mean that, while this report looks at other countries to find out how you lift yourself to excellence, Australia is cutting back the infrastructure on which you build the necessary programs to encourage that same development in Australia.

I conclude by saying that, just last week, quite importantly, Dr Craig Emerson, Labor's shadow minister for innovation, industry, trade and tourism, tabled a policy discussion paper—Thriving industries in an innovative Australia—which does provide a very good blueprint for how to get Australia back to work and properly started again. This country has been the best in the world for creating part-time work and not full-time jobs. The jobs we have created over the last several years have been part-time jobs in the main, not full-time jobs that offer full-time career prospects for Australian workers. (Time expired)