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Tuesday, 16 November 1976

Mr HOLTEN (Indi) -In the 5 minutes available to me I want to say something about the Industries Assistance Commission and manufacturing industry. There is no doubt that the manufacturing industry in Australia, and especially the country's labour-intensive industries, are under serious threat and even attack from the IAC or certain members of that organisation. The IAC was established with the support of the main political parties, but with qualified support from the National Country Party, with the aim of presenting a more coherent approach towards industry development. However, in its annual report, the Commission pays scant regard to the effect its policies will have on the economic, social and physical well being of the people in the communities concerned. This is despite a specific request from the Minister for Industry and Commerce (Senator Cotton) to the Commission on the content of the report, when he said: the Government is concerned to ensure that its decisions upon assistance to particular industries are based upon the fullest possible information about the social and locational as well as economic consequences of adopting the recommendations of the IAC.

The annual report of the IAC blithely recommends a sweeping, major restructuring of manufacturing industry. Resources are to be diverted away from high-cost industries towards industries that are more efficient in the Australian environment. But there is not one practical recommendation from the IAC as to how this may be done.

It discusses at great length efficiency of industrybutnowheredotheCommissionersspellout theirmeaningofefficiencyortheirdefinitionof it.Theypointoutrepeatedlytheneedforindus trypoliciesthatencourageefficientindustries anddiscourageinefficientindustries.Theyadvo- catetheprogressivereallocationofresourcesin favourofthelessprotected,moreefficient,low- costsectionsoftheAustralianeconomyand awayfromthemoreprotected,lessefficientsec- tors.Itmustbeassumed,therefore,thathigh protectionmeansinefficiencyandlowprotection impliesefficiency.Whatanincredible proposition.

I could name many industries that are dependent on protection but whose record is one of excellent productivity and maximum use of capital and labour resources. Yet these industries, because they have relatively high levels of protection, are classified as inefficient. There is no point in anybody saying that resources should be reallocated unless he says where they should be reallocated. Where and what are these new lowcost industries which, according to the IAC, are supposed to spring up? They seem to be mythical. There is no point in the Chairman of the IAC saying that it is not the Commission's responsibility to point out what low cost industries should be encouraged or developed. There is no point in saying that people can be retrained if no concrete suggestion is made. For what purpose can they be retrained? Where can they be retrained? There is no point in saying that industries should become more efficient. How can they, when efficiency itself is not clearly defined?

It is this one sided approach of the IAC- this is not only my opinion; it is shared by many responsible and leading Australians in the industrial world- that is completely eroding any confidence that industrialists may have in investment in Australian industry. What is needed is a more positive approach with practical recommendations for a more efficient use of resources in a competitive world environment. We need long term plans from government to restore confidence in industry, to restructure if necessary, but at a pace and price which the community can afford. Above all, we need a policy that takes into account not only the effective functioning of manufacturing industry but also the well-being of the community as a whole. The Chairman of the IAC is reported in last week's news as saying that tariffs are escapist and that anyone who supported tariffs was guilty of escapism. All I can say is that many developed countries must be escapist.

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