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Manufacturing needs competitive environment



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MEDIA RELEASE SENATOR FRED CHANEY LEADER OF THE OPPOSITION in t h e s e n a - e SHADOW MINISTER FOR INDUSTRY.

TECHNOLOGY AMD COMMERCE j

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MANUFACTURING NEEDS COMPETITIVE ENVIRONMENT 17/89

Today's CAI-Westpac Survey of Industrial Trends for the March quarter confirms fears about the Government's lop-sided economic strategy.

Instead of concentrating on providing an environment which will, help our manufacturers compete internationally, the Government has opted for a comparatively quiet life. Like the rest of the economy, the manufacturing sector has become a pawn in the Government's stop-go monetary policy game.

Manufacturing exports have dropped to a three-year low, business confidence has hit its lowest level in 15 months, and forward orders have fallen substantially. Not surprisingly, capital expenditure plans have also been revised downwards.

Yet the Government still refuses to accept the need for change in its approach.

Apparently it cannot understand that Australian manufacturers cannot compete internationally with an inflation rate double that of our competitors, nominal unit labour cost growth consistently above rates overseas, and prime lending rates of around 17% and with further rate rises in the pipeline.

It is generally agreed that we urgently need more manufactured exports and less manufactured imports to reduce The chronic current account deficit. But to achieve this there must be fundamental changes to the environment in which Australian

business operates.

Labour market reform is absolutely essential to ensure both a sensible wages outcome in relation to productivity and productivity growth itself. Tax reform and reductions in government spending are needed to release resources to the private sector and to encourage effort and saving and investment.

Exporters must not be made uncompetitive by an inefficient waterfront and transport system.

The real challenge remains of providing a genuinely competitive environment for Australian manufacturing on a stable long-term basis.

PERTH 13 March 1989

Contacts Keith Kessell (09) 325 8179

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