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Tuesday, 22 February 1977

Mr MALCOLM FRASER -The honourable gentleman is nothing if not persistent in the pursuit of his approach in these matters. I do not think that even the constituents in his electorate would really recommend returning to wheelbarrows instead of trucks or to horses instead of tractors, although they might have less of a spare parts problem if they did. The honourable gentleman forgets that within a society the rate of change is of the utmost importance. If the rate of change in economic matters, or in other matters which are of fundamental concern, proceeds too fast there will be grave disruptions which society will not be able to accommodate without grievous harm to significant groups of people. What has happened is that the natural processes of moving from wheelbarrows to trucks, about which the honourable gentleman spoke in his normally eloquent way, were given a tremendous boost in the 3 Labor years, not only by tariff reductions but more particularly by other policies that promoted the vast inflation and, at the same time, by policies that promoted enormous increases in wages.

Under these circumstances it was obviously much more difficult for Australian industry to compete and to maintain its position. Firms that sent about one-third of their products to the United States market now do not send anything to the United States market as a result of these changes. I refer also to firms that went off-shore and that were encouraged to go off-shore during the time that the present Opposition was in government, exporting Australian jobs to countries overseas in the circumstances that prevailed 2 or 3 years ago. The pace of change was much too fast. If that pace of change had been allowed to continue at the rate at which it did as a result of these forces working through the Australian economic community, quite plainly there would have been grave disruption, and it would have been very difficult indeed to provide jobs for Australians who wanted to work. So it is a question, where change is inevitable, of the change being accommodated in a way that is sensible and realistic. The honourable gentleman pointed out some areas in which change was inevitable.

I would like to make one or two other points about this general question of protection and free trade. Whilst everyone claims not to be of the extreme position on one side or the othereveryone claims to be in a reasonable position saying that he wants reasonable protection for reasonable industries- the only difference comes over the definition of the word 'reasonable' in each case. In that area people differ very greatly.

Australia is at the end of long transport routes and comparisons are sometimes made with countries like Sweden that have been able to concentrate in certain areas. But people forget that whilst the populations of Australia and Sweden are not dissimilar, Sweden is close to the large and affluent markets of Western Europe and has minimum transport costs. That country therefore is in a vastly different position to a country like Australia which is not close to any other market except with very significant transport costs.

In these circumstances it is inevitable that if Australian industries, with the size market that we have, are to compete, there has to be a proper level of protection. In a situation such as the one which has resulted from the inflationary policies of our predecessors many Australian industries are in difficulty and the question of restructuring industry is all the more a difficult question. If most industries are prosperous and we find that we wish to restructure an industry, because its rate of protection is too high, there will be jobs for people in that industry to go to. But in a situation where most of industry has an excess capacity and a decision is made to restructure industry, we are restructuring people into the dole queues. That is not going to be the policy of this Government.

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