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Thursday, 17 October 2002
Page: 5415

Senator LUNDY (3:56 PM) —The Space Activities Amendment Bill 2002 is designed to support Australia's space industry. It does this by capping at $750 million the amount of insurance required to be provided by the proponents of each space launch. It also provides for the Commonwealth to accept liability for third party Australian nationals above this $750 million for up to $3 billion. As it stands, the Commonwealth is already liable under United Nations conventions for damages to third party foreign nationals, so it is fitting that Australians are to be similarly protected under this bill.

This bill also strengthens the safety test being applied to commercial applicants. The existing legislation provides for a test of risk that is sufficiently low, whereas this amendment makes for the provision of a test of risk that is as low as is reasonably practicable. The bill also provides for a more practical application and assessment process and a lower fee regime for scientific and educational organisations. The government's reasoning behind this is as follows. Activities undertaken by scientific and educational organisations are usually on a one-off basis and do not involve the construction of major infrastructure. It is reasonable that these organisations are subjected to a modified and more suitable licensing regime. It is hard to argue with that. Finally, the bill contains a number of small administrative and technical amendments intended, I am assured, to improve the operation and efficiency of the act. As my colleague in the House of Representatives Dr Emerson stated when this bill was before him, Labor sees no compelling reason to oppose this bill. In fact, if it facilitates innovation and growth of the space industry, it is a positive sign.

We are aware of the proposed amendments that are to be moved by Senator Bartlett of the Australian Democrats. However, Labor will not be supporting these amendments. The Democrats say that some of these amendments are designed to further improve the safety of space launches, but the measures they propose to enact through these amendments appear to be over the top. Labor has been assured that there are suitable measures in place in this bill both to address safety concerns and to cover the liability in relation to such launches. Arguably, the further regulation of space launches entailed in these amendments could unduly impede the operation of our space industry.

The bill reminds me of another space related event that occurred last year. In June of 2001 the then Minister for Industry, Science and Resources, Senator Minchin, announced the government's intention to provide up to $100 million to facilitate the building of a space port on Christmas Island. Quite obviously, the government was keen to support and, indeed, to subsidise an industry which it felt would be of great benefit to Australia. That is why I am quite hopeful that the government will realise the massive potential to Australia of another industry: the information and communications or ICT industry. Australia possesses within its shores some of the best and most innovative ICT small and medium sized businesses in the world. Some of Australia's small to medium sized software developers are particularly strong. Unfortunately—and this is actually a problem— we have many Australian owned SMEs in the ICT industry but few if any large, homegrown enterprises. This is a problem that the government needs to address when it makes policies.

The fact is that although Australians have a reputation for being very big consumers of information and communication technology—in fact many key sectors of our economy, such as manufacturing and education, require this technology to remain competitive—the Australian market for ICT products and services is comparatively small when you look at other markets around the world. Therefore, if our small to medium sized ICT firms are to grow into big firms such as the kind we are used to seeing come out of the United States, they need to be globally orientated—they need to be exporters and they need to be building their size and capacity and thinking and acting globally. This is obviously easier said than done, especially with the coalition government doing very little to support these opportunities for significant growth. The coalition appears to be quite happy to help establish Australia's fledgling space industry—certainly something Labor does not object to—but it does not do much to help these small to medium ICT businesses become medium and large sized ICT businesses that are globally competitive.

All this government needs to do to promote Australia's ICT industry is to consider how it spends the information technology dollar and look to its own backyard. This is obviously a crucial element of a range of complex policies that are necessary to promote worthy and deserving industries like ICT. On 13 August this year the Australian Financial Review reported that the federal government would spend around $14.6 billion on ICT. I am not sure if it is quite this amount, but I think it is fair to say that it is a very significant expenditure of taxpayers' money. The question is, how much of this money will be spent on Australia's SMEs and how much will go to the same old multinationals, bypassing local businesses at the expense of local sustainable jobs and further blowing out the ICT trade deficit—in other words, creating greater demand for imports of ICT goods and services without supporting companies that could in turn offset that trade deficit by building their own exports.

If past policy is any guide, the answer is not too good. The conscious policy of the coalition has been to favour large foreign owned multinationals over Australia's innovative IT SMEs. This has been, and still is, a disgrace. The coalition like to deny this and make out that they are doing something about it. I note that they have even put together a working group to try to do something about it. However, they have not changed the situation. They are constructing tender processes that they say are improving the situation facing ICT SMEs, but these tender processes continue to discriminate against and make it much harder for Australian SMEs in the following ways. Some of them—and I have seen advertisements to this effect—give only five days for businesses to respond to a tender request. For a very large company with the human resources to redirect and devote to such an exercise, it may be possible. For a small SME with specific expertise, this constitutes a very tangible barrier to participating in that tender. There is also the requirement of onerous and unreasonable professional indemnity commitments, even to an extent that might exceed the requirements of the project.

I have certainly had representations suggesting that, far from streamlining tender processes, employing an endorsed supplier agreement scheme has made it more burdensome for SMEs to participate in tendering for government work. For the many small ICT businesses I have spoken to, these are just some of the barriers they face to competing for, and winning, government tenders. It is often when they are successful as a subcontractor to a multinational that they are handed just enough business to keep their wheels turning, but that gives them very little ability to make the necessary investments in research and development and to keep globally competitive and active in growing their export markets. Many SMEs have told me that they will not bother going through the process of tendering for government work at all. This is a very disturbing situation because, as I have previously stated in this place, some 40 per cent of expenditure on information and communication technologies in this country is in the government market. It is a very important market for these companies.

It is worth while looking for a minute at the coalition's latest efforts to give the appearance that they are interested in helping the ICT sector, published in a press release entitled `Commonwealth Government ICT Procurement and Strategic Industry Development—New Guidelines for Suppliers'. The media statement tells us that the coalition assumes that locally based branches of multinationals equate to local firms. It tells us that local ICT industry development is whatever crumbs these same multinationals that win the juiciest prime contracts choose to toss to Australian SMEs. It tells us that the coalition's guidelines designed to assist Australian industry only apply to contracts over $20 million, thus excluding a great deal of government business. It also tells us that the minimum SME participation requirements are themselves merely trifles—10 per cent of hardware supplies and 20 per cent of services. Finally, the statement adds the following proviso:

These requirements will be administered flexibly to ensure that tenderers and agencies are not unjustifiably disadvantaged.

So these trifling guidelines, with all their flaws, are not even mandatory. The government or multinational contract winner may be `flexible' if they consider themselves to be disadvantaged.

I remind the Senate that these companies do not want special favours. The domestic ICT sector is incredibly innovative and competitive. These companies are ready, willing and able to fight for work and build their own capability, obviously in their own interests as companies but also in the interests of Australia's long-term economic outlook. They need fair treatment by this government. However, such a straightforward, meaningful and logical approach has so far eluded the coalition, leaving many people in Australia's ICT sector to wonder what the space industry has that they do not. Obviously software is not as exciting as rockets. In the meantime, as I said, Labor do not oppose the attention that this government is paying to the space industry and we will be supporting this bill.