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Wednesday, 8 December 1976


Mr HOWARD (Bennelong) (Minister for Business and Consumer Affairs) - in reply- I shall endeavour to be brief because, like the honourable member for Indi (Mr Holten), a quota is placed on my time in this debate. This has been a very interesting debate. I think it is appropriate for me to ask the House what precisely has been said. The first area at which I direct that question is the Opposition. Where does the Opposition really stand on the statement of government policy made last night? What precisely is the attitude of the honourable member for Port Adelaide (Mr Young) to the declarations made by the Government last night regarding the position of Australian industry? The honourable member for Port Adelaide, to start with, cannot make up his mind whether the decision that was announced last night is going to damage or is going to be beneficial to the Australian car industry.

The honourable member for Port Adelaide ought to know, as a person interested in local industry in his own State, that the Government has made it very clear over a period of some months that it intends to preserve for the local car industry of Australia some 80 per cent of the domestic market. Perhaps the greatest gem of all that was produced by the honourable member for Port Adelaide was his statement that the 25 per cent tariff cut made in July 1973 cost only a few hundred Australian jobs. He said this very deliberately. It did not just slip out. It was not one of those frenzied responses to an irritating interjection. He said it quite deliberately. He said that it did not cost 100 000 jobs; it did not cost 10 000 jobs; it cost only a few hundred jobs. Maybe the honourable member for Port Adelaide, and other people who share the view that the honourable member expressed during this debate, have forgotten the text of a report issued in 1973 which dealt with recommendations to the Government regarding the 25 per cent tariff reduction. That report was issued by a committee chaired by the former chairman of the Industries Assistance Commission. As I understand it, it was on the public record. This is the very committee on whose recommendations the then Government took the decision to reduce the tariff by 25 percent.

That very committee, on whose recommendations the decision was taken, estimated that a 25 per cent tariff cut would cost 30 000 jobs over a full year. Its estimate was not a few hundred jobs as was mentioned by the honourable member for Port Adelaide, not even 10 000 jobs as was mentioned by the honourable member for Port Adelaide, but 30 000 jobs over a period of a year. That was not a figment of the imagination of someone who has highly protectionist attitudes. It was the very report of officials on whom the Government's own decision at the time was based. As I have said, the Committee estimated a reduction of 30 000 jobs as a result of the 25 per cent tariff cut. For the honourable member for Port Adelaide to suggest in this House that the 25 per cent tariff cut had no impact on jobs is absolute nonsense.

There was reference to reports of the Industries Assistance Commission during this debate. I refer to page 78 of the annual report of the Industries Assistance Commission for the year 1974-75. A table headed 'Notified Retrenchments in Manufacturing Industry due to Structural Change between 1 July 1973 and 30 June 1975' shows a total of 27 298 people. That is strangely close to the estimate of 30 000 people in the report of the committee on whose recommendations the Government's decision in July 1973 was based. So the suggestion by the honourable member for Port Adelaide, unfortunately echoed by other speakers in this debate, that the 25 per cent tariff cut had minimal employment implications flies in the face of all the advice available to the Government at that time and flies in the face of all understandingpsychological, economic, social and otherwiseof the industries affected by that decision. Undoubtedly the decision by the Government which was announced last night will be of enormous benefit to manufacturing industries in Australia. It will be of enormous benefit to labour intensive industries in Australia. It will give to those industries a confidence and an ability to invest and to re-employ that they have not had in Australia for many years. The Government makes no secret of that. It makes no apology for that. It will not be reluctant in saying that, because that is the reality of the decision.

Understandably, honourable gentlemen who are interested in this subject have expressed a desire to have further details of the decision which the Government took regarding the recommendations of the IAC dealing with multilateral trade negotiations. Those details will be available within the next day or so. They will indicate to honourable gentlemen the precise detail and extent of the reductions in this area. The Government has never denied, since the decision to devalue the dollar was announced, that there would be cost implications so far as import prices were concerned. We do not deny that. We would never deny that. The effect of the decision announced last night will have some moderating impact on those price increases. It will have that moderating impact in concert with the enormous benefits to the competitive position of manufacturing industry in Australia.

The honourable member for Gellibrand (Mr Willis) developed an argument that the entire non-competitiveness of Austraiian manufacturing industry in recent years has been due to revaluations of the Australian dollar. I do not want to do the honourable gentleman an injustice. He referred to the great bulk of the noncompetitiveness of Australian manufacturing industry. He looked a little concerned when I used the word 'entire*. I will say that the great bulk of non-competitiveness of manufacturing industry in recent years has been due to revaluations of the Australian dollar. In some measure I am not arguing with his proposition that revaluation of the dollar causes competitive problems for a local industry. Equally, devaluation of the Australian dollar improves the competitive position of the local industry. Once again I quote from a source on which he relied during his remarks, and that is the most recent annual report of the IAC tabled in this House. It referred to the competitive position of Australian manufacturing industry and indicated that according to a combined index, including currency variation, domestic cost pressures and tariff reductions, there had been a net decline over a period of something like 4 years -


Mr Willis -It is 5 years.


Mr HOWARD -I thank the honourable gentleman. Over 5 years there had been a decline of about 17 per cent. The truth is that the most significant movement of the 3 elements that make up that index during that period was the one thing from which the honourable member for Gellibrand and his colleagues want to run away. That is the enormous escalation of wage costs in Australia during that period. They want to run away from it. They will not face it. During the last 6 years average wage increases in

Australia went up by 130 per cent, compared with 53 per cent -


Mr Scholes - I take a point of order. If the Minister opens up another second reading debate, we will open up a second reading debate on the other Bills when they are called on.

Mr DEPUTY SPEAKER (Mr Lucock)Thereis no substance in the point of order.


Mr HOWARD - The sensitivity of the honourable member for Corio demonstrates very dramatically the fact that the Opposition refuses to face the implications for the competitiveness of Australian industry of wage escalations over the past few years. My quota has run out. I thank those honourable gentlemen who contributed to this debate. I commend to the House the statement of government policy last night.

Question resolved in the affirmative.

Bill read a second time.







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