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Wednesday, 16 February 1977
Page: 109


Mr HOWARD (Bennelong) (Minister for Business and Consumer Affairs) - When I read the notice paper for today's sitting I thought for one moment that at long last the Opposition might be prepared to address its mind to the fundamental problem which faces manufacturing industry in Australia. To my recollection, this is the first occasion in 13 months on which the Opposition has shown any formal concern at all for the problems facing Australian manufacturing industry. But, having listened to the remarks of the honourable member for Port Adelaide (Mr Young), having listened to him use his 15 minutes as an opportunity to make generalised and emotional attacks on the Government in order to draw attention to the problems of unemployment-they are problems of which the Government is very conscious- we then heard the honourable member conclude his remarks by berating the Government for failing to face the problem besetting manufacturing industry. I believe, and the Government believes, that the great problem of manufacturing industry in Australia at the present time is a problem of competitiveness, and until such time as the competitiveness of manufacturing industry in Australia is restored and until such time as the entire community recognises the extent to which this country has priced its way out of world markets and the extent to which the domestic cost structure in this country has created difficulties for its import competing industries as well as its export industries- until that realisation come to all sections of the Australian community which are involved in, affected by and concerned with manufacturing industry- the great problem of the industry is not going to be solved.

Of course, the percentage of people employed in manufacturing in Australia has declined very sadly over the last five or six years, and the Opposition must bear its very full share of the blame for that decline. Honourable members opposite know, as do honourable members on this side of the House, that the total number of people employed in Australian manufacturing industry declined by 100 000 between May 1974 and July 1976. That was a decline of 100 000 in a period of little over 2 years. They also know that in the 5 years between 1970 and 1975 average wages in Australian manufacturing industry increased by 123 per cent, compared with a 50 per cent increase in West Germany and a 73 per cent increase in the United States. Those figures demonstrate better than any the massive decline in competitiveness which has occurred in Australian manufacturing industry. It is no use the Opposition pretending that it has an alternative solution that does not recognise the problem of uncompetitiveness in Australian manufacturing industry. Until that realisation comes to its own supporters, until that realisation comes fully to all of those involved in sections of manufacturing industry, we are not going to have any lasting solutions to the particular problems of that industry.

There is no way that considerations of wage restraint, productivity and good industrial relations can be separated from consideration of the problems of manufacturing industry in Australia at the present time. Those 3 issues will underpin recovery in manufacturing industry if the right policies are adopted towards the solution of the problems in those 3 areas. From the time this

Government came into office it has pointed to the inflationary effects of the unrestrained wage growth that occurred, particularly in 1974 and the early part of 1975. This Government has never made any apology for pointing to that growth. It has never shirked its responsibility to say to the Australian people: 'You will not have economic recovery, a revival of manufacturing industry and thus re-employment of people and retention of people already employed unless you make your industries more competitive. You cannot make them more competitive if you continually bloat the cost structure of your local industries'. That is what occurred in a massive way between 1972 and 1975, and that is what would occur if the wages policies still, as late as today, espoused by the Opposition were adhered to. That is why the Government attaches such tremendous importance to wage restraint as an element in bringing about economic recovery and particularly in bringing about sustained recovery and growth in the import competing sector of Australian industry.

Perhaps the other illustration of the extent to which the Opposition refused to face the basic problem of manufacturing industry is the rather glib way in which it dealt with unemployment when in government. We all are concerned about the problems of people who are unemployed. This Government will yield to nobody so far as practical demonstrations of that are concerned. But the fact of the matter is that the greatest blow struck to employment in manufacturing industry over the past 10 years occurred in 1973 through the previous Government's indiscriminate reduction in tariffs by an across-the-board figure of 25 per cent. In this House last December the analysis given by the Opposition spokesman on manufacturing, the honourable member for Port Adelaide (Mr Young), who has now left the chamber, of the employment consequences of the 25 per cent tariff cut was that it probably cost 200 or 300 jobs and no more. Yet the very document on which the then Government's decision was based estimated that the total number of people who could be affected by that tariff reduction would be of the order of 30 000. That figure was verified by notified retrenchment information given to the then Department of Manufacturing Industry by manufacturing industry affected by that tariff cut.

It is impossible to isolate the economic problems of any sector of Australian industry from the general economic problems of this country. It is impossible to talk about economic recovery being sustained without talking about the problems of wage escalation and inflation and the industrial problems this country has. It is very intriguing to hear a reference to the 1945 commitment to full employment that was made by the Chifley Labor Government. That Government did make a commitment to full employment- a commitment that remained fulfilled by successive governments until the Whitlam Government came to office in 1972. The record speaks for itself. For that period of 20 years during which sensible economic policies were pursued the commitment to full employment made in 1945 was essentially discharged.

I take the opportunity that this debate presents to inform the House of a number of decisions taken by the Government earlier this week regarding the operations of the Temporary Assistance Authority. As honourable members will be aware, the Temporary Assistance Authority is governed by the provisions of the Industries Assistance Commission Act and essentially, but not exclusively, deals with the short term import problems of our import competing industries. Honourable members will be aware that the Government has had the operations of the Temporary Assistance Authority under review for some weeks. I am now in a position to announce to the House during this debate details of the changes that the Government has made. In doing so, I remind the House of the commitment contained in our November 1975 policy statement dealing with manufacturing industry, namely, that we would maintain an efficient emergency procedure to provide prompt temporary assistance to safeguard industries from damage by undue import competition and that, as necessary, we would amend the Industries Assistance Commission Act.

I make it quite clear at the outset that the effect of these amendments will be to provide both the Temporary Assistance Authority and the Government with greater flexibility in dealing with requests for temporary assistance. They will confirm the role of the TAA as the principal, although not only, body dealing with cases involving requests for temporary assistance. These decisions are quite consistent with the policy of the Government that industry assistance, temporary or long term, will not be granted without the benefit of prior investigation and report by either the IAC or the TAA. I should add in this context that one of the amendments decided upon by the Government is to make it mandatory that any inquiry by the TAA be conducted in public.

Details of the changes in their particularity are as follows: Firstly, the Act will be amended to provide that in future the Temporary Assistance

Authority will be able to recommend to the Government any form of assistance it considers appropriate. That is the current position in respect of recommendations of the IAC, whereas at the present time the TAA is limited to recommendations concerning tariffs and import restrictions only. Secondly, the present requirement in the Act that a reference be sent automatically to the Industries Assistance Commission in the event of the TAA recommending emergency assistance will be modified. In future, under the amendments, temporary assistance recommended by the Authority and granted by the Government will not continue for a period of more than 12 months without review by either the IAC or the TAA and, in addition, any industry which receives temporary assistance for a total period of 2 years within any period of 4 years will automatically be referred to the IAC for a long term report. Furthermore, the TAA will be required to recommend whether an immediate reference should be given to the IAC on the long term assistance required by the industry.

In addition the provisions of the Industries Assistance Commission Act which deal with the circumstances in which a reference for temporary assistance should be sent to the Authority will be amended to incorporate in the relevant section of the Act words to the like effect of those contained in Article 1 9 of the General Agreement on Tariffs and Trade. Fourthly, the Government also will amend the Industries Assistance Commission Act to provide the Government with the same flexibility in dealing with recommendations of the TAA as apply in respect of recommendations by the IAC. This change will mean that upon receipt of a report from the TAA the Government may not only accept, reject or partially adopt the recommendations of the Authority but also take any other action it thinks fit in the circumstances.

There are a number of other subsidiary amendments which time precludes me from mentioning. The purpose of my announcing these decisions in this debate is to indicate in a practical way the manner in which the Government is prepared to respond to the particular problems of an area of Australian industry without in any way compromising the essential principles on which the industry assistance policy of this Government is based. Those principles contain, amongst other things, the maintenance of a process of independent and open inquiry and a system whereby government decisions are not taken without that process of open and independent inquiry having been utilised.

I believe, and the Government believes, that these changes to the temporary assistance procedures of the Industries Assistance Commission Act are an intelligent response to the deficiencies that exist under the Act. I believe that they will be seen as being of practical assistance to solving particular problems without in any way departing from the basis on which our industries assistance policy is predicated. The changes are another illustration of the practical concern of this Government for the continuing problems of manufacturing industry in Australia. I will conclude where I began. Essentially the problems of manufacturing industry in this country are problems of competitiveness, and until such times as the entire community accepts and realises these basic problems the long term future of manufacturing industry will continue to be difficult.

Mr DEPUTY SPEAKER (Mr Lucock)Order!The Minister's time has expired.







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