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Problems Facing Industry



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ρς MAY 21, 1974.

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FROM SENATOR THE HOn /*ROBERT COTTON . LIBERAL & COUNTRY PARTY SPOKESMAN ON MANUFACTURING INDUSTRY

S en ato r R o b e rt Cotton· L ib e ra l arid C ountry P a rty S pokesm an on M anufacturing Industry] sa id today th at the A u s tra lia n com m unity m u st take a re s p o n sib le look into the fu tu re as r e g a r d s m an u factu rin g in d u stry .

The p re s e n t a p p aren t p ro s p e rity is re a lly cloaking a g r e a t d eal of p o ten tial tro u b le .

L ittle attention is being paid to th e v e ry tight liq u id ity situ a tio n com m on to all m a n u fa c tu re rs .

We a re seein g tim e tak en fo r c u sto m e r paym ents s tre tc h in g out, and if th is c o n tin u es we could find th e re is som e b an k ru p tcy , p a rtic u la rly am ongst s m a lle r firm s who a re not able to e sta b lis h lin e s of c re d it in the p re s e n tly e x istin g high in te r e s t r a te p o sitio n .

It is a fact th at s a le s and o rd e r s a re s till v e ry high and the dem and on lo c a l

m a n u fa c tu re rs is s till v e ry stro n g . H ow ever, lab o u r s h o rta g e s and in d u s tria l u n re s t a re cau sin g chaotic conditions am ongst m a n u fa c tu re rs . It is becom ing a lm o st a n ig h tm a re fo r m a n u fa c tu re rs try in g to c o u n ter c o n sta n t s tr ik e s , la rg e wage dem ands and indem ic sh o rta g e s of la b o u r.

som e in d u s trie s , the wage b ill has r is e n 26% in five m onths and even to take r e of p a st wage in c r e a s e s would re q u ire p ric e in c r e a s e s of the sa m e am ount.

M anagem ent is co n ce rn e d - although p re s e n t r e tu r n s look good, re p la c e m e n t c o sts a re so a rin g and it is v e ry d ifficu lt to m ake p ro p e r p ro v isio n fo r the fu tu re .

It is not p o ssib le to s e t a sid e adequate am ounts fo r d e p re c ia tio n when c o s ts of c a p ita l equipm ent keep ris in g a ll the tim e . In d u stry is facing a difficult tim e and in the

A u s tra lia n in d u s trie s , the fo rw a rd o rd e r book is dropping away.

Up to the p re s e n t tim e , the la rg e banlted-up dem and in A u s tra lia h as been able to ab so rb the ra p id ly in c re a s in g im p o rts but any dow nturn e ith e r 1 '«cally o r o v e rs e a s w ill lea d to tro u b le . If th e re is a n y larg e sc a le d iv e rsio n of goods to the

A u s tra lia n m a rk e t fro m o v e rs e a s , we sh a ll se e g ra v e consequent dam age r e s u lts to lo c a l m a n u fa c tu re rs .

A nother fa c to r is th at th e m e a s u re s in tro d u ced la s t y e a r such as re v a lu a tio n of the

Ik c h a n g e and 25% ta r if f c u ts have not y et been fe lt by in d u stry but it is p o ssib le th at

all th e se m e a s u re s w ill affect in d u stry sim u lta n eo u sly and w ill not be s p re a d out.

T h is,co u ld lead to c lo sin g down of fa c to rie s and unem ploym ent. The com petition fro m im p o rts is in c re a s in g all the tim e and conditions w ill becom e m o re d ifficult as the p rev io u s sh ie ld s a g a in st the inflow of goods fro m low c o st c o u n trie s have b een rem o v e d . M o re o v er, th o se in d u s trie s in A u s tra lia which have b u ilt up

p ro fita b le e x p o rt m a rk e ts a re finding they a re no lo n g e r able to com pete doutside A u s tra lia as the lo c a l c o s t s tr u c tu r e is p ric in g th em out.

T his could have cum ulative a d v e rse effe cts on th e ir a b ility to produce A u s tra lia n m a rk e ts , p a rtic u la rly if th e re a re fu rth e r wage in c r e a s e s on the lo c a l sc e n e .

S en ato r Cotton sa id th at the L ib e ra l and C ountry P a r t ie s fe lt th at it is e s s e n tia l th at

the A u s tra lia n public re c o g n ise d the p ro b lem s facing in d u stry over the next few m o n th s.