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Department of Finance submission to the Committee of Inquiry into Technological Change in Australia

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The Department of Finance today released the Submission it has made to the Committee of Inquiry into Technological Change in Australia. The submission was made in response to a request from the Chairman, Professor Rupert H. Myers CBE.

The first part of the Finance submission is addressed to the major issues relating to technological change, productivity and unemployment, and puts forward the view that current concerns about what are perceived to be the adverse effects of technological change are largely misplaced. The Department states that the real difficulty lies in the interrelated problems of inflation, unemployment and slow growth - as the governments of most OECD countries have

recognised. It concludes that, while the precise effects of technological change in the present context are difficult to ascertain, slowing down or controlling the application of technological progress could exacerbate, rather than contribute to the removal of, present economic problems.

The second part of the submission considers possible Government responses to technological change and, in particular, the scope which exists for Government policies to - in the words of the Committee's terms of reference - "maximise economic, social and other benefits and minimise any possible adverse consequences" of the process.

In view of suggestions that the Government should intervene to influence the rate and direction of technological change, an assessment is made of potential effects of Commonwealth policies that might be considered. Finance concludes that it is difficult to see how such policies would work - or that the community would be better off - if they did succeed in directing or moderating

technological change.

Comments are made on the role of the patent system, and the provision of government assistance for private research and development. They suggest that the Government should riot seek to tell industry where its research efforts should be directed, and that industry should have to make a significant contribution to research projects carried out with Government support. In

relation to research by the public sector, it also suggests that the Australian Council for Science and Technology (ASTEC) could potentially have a major co-ordinating role to play in the allocation of research funds.

The submission concludes with a general discussion of policies of adjustment to technological change. Finance suggests that in designing adjustment policies, it would be undesirable for problems arising from technological change to be treated differently, or in some special way, from problems arising from any other type of

change occurring in the economy. The Department also considers there is a need for any programs in this area to be kept under regular review, both with a view to improving their effectiveness and to redesigning them where necessary to meet changed circumstances. ,

27 November 1979