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Textiles clothing and footwear and cars given the challenge but what about the opportunity



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TEXTILES CLOTHING AND FOOTWEAR AND CARS GIVEN T H E CHALLENGE BUT WHAT ABOUT T H E OPPORTUNITY?

W hilst the Governm ent m ight boast about its toughness in announcing accelerated reductions in protection for the Textile, Clothing and Footwear (TCF) industries and its acceptance of the Industry Commission recommendations for the car industry,

the really tough decisions have yet to be taken, Shadow M inister for Industry and Commerce, Ian McLachlan said today.

'The Governm ent has failed the test, th e only relevant test, of m aking A ustralia a more attractive place for investors and a more competitive place to do business,' he said.

'It's task was made a lot easier by the Coalition's path-breaking decision last year to reduce all industry protection to at m ost negligible levels by 2000. Indeed acceleration of the TCF plan has been Coalition policy since 1989.

'It's a great pity, however, it has rejected the possibility of bipartisan support for equally essential microeconomic reforms.

'Because w ithout fundam ental changes to reduce costs, m anufacturers will find it extremely difficult to m eet the challenge of international competition,' he said.

'Some will succeed against the odds as some are now, but m any m ore would a ttain world standard if obstacles such as the ludicrous Trans Tasm an Shipping Agreem ent and w aterfront inefficiencies were removed and they were given a real opportunity to compete.

'For example the Industry Commission calculates th a t the car industry would increase its output by 8.5 per cent if a comprehensive reform package were implemented, w ith the bulk of the gains flowing from tran sp o rt reform.'

Com menting on specific elements of the plans, Mr McLachlan said th a t the

strongly opposed introduction of an im port credits-cum-export subsidy scheme in the TCF sector, surprisingly ungenerous though it was, because it would create new distortions, penalise efficient exporters in other industries and seriously underm ine Australia's credibility in arguing for freer world trade;

Coalition

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PARLiAMEl- iVARY LioRARY MICAH

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- reluctantly supported continuation of export facilitation in the car industry because it would be far too disruptive to w ithdraw it now and the export subsidy implicit in the scheme would w hittle away as the ta riff fell;

- welcomed the Governm ent's acknowledgment th a t the luxury car sales tax was a stupid m istake;

- would continue to oppose m inimum volume sanctions in the car industry; and,

- supported w ithdraw al of eligibility of automotive exports to New Zealand for export credits.

Mr McLachlan also noted the Coalition had some concern about continuation until 2000 of the autom atic duty-free by-law entitlem ent which allowed car-m akers to bring in 15 per cent of th eir production duty-free and would be discussing this further with industry participants.

'But clearly the greatest problem w ith the Government's whole approach is its failure to deliver an integrated package of structural reform w ith ta riff cuts and all A ustralians will pay for its weakness in jobs and income foregone.'

CANBERRA 12 M arch 1991