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Opportunity for car industry to look ahead



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IAN M cLA C H LA N M E M B E R FO R B A R K E R SH A D O W MINISTER FOR IN D U STR Y AND CO M M E RC E

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EMBARGO: 8.00 PM Wednesday 6 February

OPPORTUNITY FOR CAR INDUSTRY TO LOOK AHEAD

The Shadow Minister for Industry and Commerce, Mr Ian McLachlan tonight urged participants in the car industry to use the current review of the industry to their advantage by broadening the ambit of reform.

'By putting the spotlight on the industry - and indeed applying pressure on it to become more competitive - the review process itself provides an opportunity to reciprocate this pressure on government to remove obstacles which impede the industry's progress.'

Mr McLachlan was addressing the Southern Region Meeting of the Federation of Automotive Products Manufacturers in Melbourne.

He said it was crucial that this period was used to look ahead, in order to meet future challenges and not to re-hash arguments of the past.

'It would be a waste of the industry's valuable resources to concentrate on a temporary respite in the rate of tariff reduction, when so much else needs to be done to ensure it has a viable future whatever the level of protection.

Ί would also caution the industry against rushing into superficially attractive 'solutions' such as a one-union industry which could merely replace existing inefficiencies with new rigidities. Union structure must be driven by the needs of individual enterprises.'

Mr McLachlan noted that the Federation itself in its submission to the Commission stressed that the industry was not capable of surviving even at current rates of assistance without significant changes in the broader economic environment.

'Nevertheless many in the industry concentrate almost exclusively on the rate of tariff reduction. This perhaps is understandable given the government's woeful record on removing business cost impediments, but ultimately they will find this line of argument barren. x

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'The industry's efforts should be directed instead to ensuring the Government delivers those reforms all agree are vital for the industry's success, including industrial relations reform, a more efficient transport system, introduction of a goods and services tax and lower inflation and more competitive interest rates.

'If these areas were addressed, as the Coalition proposes, industry protection would become virtually redundant: the benefits flowing from an improvement in the general economic climate would dwarf any benefits the industry believes it currently receives from protection.

'According to the Industry Commission even limited reform would generate additional national income of $22 billion, more than 50,000 jobs and expansion of all sectors of the economy. No one else is promising economic growth of this magnitude,' concluded Mr McLachlan.

MELBOURNE 6 February 1991

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