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Department of industry and commerce bureau of industry economics "stocktaking" study of Australian industry - problems and prospects

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News Release News Release IMMEDIATE RELEASE_____ 17 April__19_84__________ 27/84


The Minister for Industry and Commerce today announced a study being undertaken by the Department of Industry and Commerce and the Bureau of Industry Economics into the past performance and future prospects of Australian industry.

The study is part of developing a comprehensive approach to industrial development in this country.

Speaking at the Bureau of Economic's conference at Melbourne, ■ Senator Button said that it was necessary to move away from the Λ sterility of policy based either upon direct interventionism or ” pure market forces or, as has more commonly been the case in the past, an unhappy, ad hoc, bureaucratic compromise between the two. -

"Industry restructuring is not simply a matter of lowering the level of protection (desirable as that may be), and leaving it to the market mechanism to pick up the pieces, adjust and grow into a new and better world.

"There is a real role for positive policy measures to ensure that the benefits of restructuring are realised.

"More importantly, there is a need for carefully thought out industrial development strategy based on a clear perception of the kind of industrial structure we wish to see emerging over the next decade. Such a strategy must be market-oriented both to the domestic market, and beyond, to the world market.

"But (and this is most important) that is not the same as saying it must be industry neutral. There are, of course, those with more faith than I, who would have us virtually alone - certainly among small to medium·advanced economies - in pretending that

industry neutrality will suffice. Countries such as Sweden, Austria, Japan, Canada, for example, have not the same confidence in the invisible hands of the market that many in Australia believe to be so self-evident.

"If one says this kind of thing, there is a danger of being

assailed by adherents of that brand of economic thought who say that governments can't pick winners. Let ‘ me make it quite clear that we are not in the business of 'picking winners' in the sense

of detailed prescriptive economic planning - that approach is unsuited to Australia, and it is a role in which governments are highly accident prone.



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"But s o m e h o w , and by agreement and c o n s e n s u s , we have to arrive at a more t a r g e t t e d , purposeful set of attitudes than we now h a v e .

Senator Button said that a generally agreed med i u m term industrial strategy would be central to acheiving those more postive a t t i t u d e s .

"At an appropriate time following the completion of the DIC/BIE study I would intend to consult with the m a nufacturing councils on industry development aspects. On wider economic a s p e c t s , it is

appropriate then to ask EPAC to consider these matters.

"An industrial strategy will be central to co-ordinating the various functions of the government in providing the

informational, educational and physical infrastructure for economic growth.

"I will be co-ordinating policy at the Cabinet level by chairing the Cabinet sub-committee on industrial restructuring.

Senator Button said that similar challenges were being faced by all developed c o u n t r i e s , and b y m a n y developing countries.

"We are not e x c e p t i o n a l . Japan is restructuring its t e x t i l e , garments, aluminium, petro-chemical and steel industries. America's n o r t h - e a s t , the old industrial heartland, is undergoing dramatic structural c h a n g e . Singapore is phasing out light

labour-intensive industries, concentrating n o w on the production of skill-intensive m a n u f a c t u r e s and tradeable services activities.

"In that international environment, inaction and complacency by government, business or employees is a recipe for disaster.

"As a g o v e r n m e n t , we are not prepared to preside over the demise of manufacturing industry in Australia. To do so would be

wasteful of our m a n y advantages in terms of raw material

e n v i r o n m e n t s , well-developed economic infrastructure, skilled labour force, research and innovation capacities, and

entrepreneurial talents in sectors of m a n u f a c t u r i n g . It would also ignore the wealth of openings which are available to us in our region. Our task is to halt a long-term decline, to generate an environment in which success in industry is appreciated and

rewarded, and to help our industry to take up the opportunities and the challenges which lie a h e a d . If we can do this, then

together we can achieve results."

CONTACT: Geoff Evans

or Nick Gruen

72 7078