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Thursday, 10 March 2005
Page: 167

Senator LUNDY (6:27 PM) —This is a useful opportunity for me to continue in the adjournment debate some remarks I was making with respect to the general business motion earlier today. I would like to continue to speak on that subject and to particularly focus on the issue of trade deficits. This government has been clocking up record trade deficits. There is no industry sector that more illustrates the fundamental neglect of industry policy and the opportunities that Australia has to manufacture and produce equipment than in the ICT or information and communication technology area.

The trade deficit in ICT alone, as Senator Cook so sharply pointed out, is almost the single biggest problem when it comes to how the trade deficit is created. In ICT alone we import some $20 billion worth of services and equipment. We export around $5 billion worth, mostly in services, leaving a trade deficit in that sector of some $15 billion. It is interesting to note that, at the start of the coalition’s period of government in 1996, it was Professor Ashley Goldsworthy who predicted the massive growth in the ICT trade deficit if neglect occurred in the area of industry development and IT policy. That prediction was made in 1996 as the movement among industry, scientists, researchers and academics grew around the government’s neglect and withdrawal of funding for those critical areas of research and development, commercialisation and industry development policies.

In 1996 the government were at great pains to say how ludicrous and irresponsible these projections were. Indeed, they made a great deal of noise about the fact that it could not possibly ever happen that way. Well, surprise, surprise—the trajectory for the trade deficit on ICT has followed almost precisely the predictions of Professor Goldsworthy in 1996. The Howard government have facilitated that trade deficit growth through their appalling handling of IT policy. As such a powerful symbol of the neglect of industry policy, the ICT trade deficit has occurred because this government has allowed opportunities to disappear. There were initiatives. We used to manufacture a reasonable proportion of ICT equipment, and we did this at a time when it was so clear that the demand for ICT equipment was going to grow dramatically. Remember that in 1996, leading into the technological revolution where computers were becoming ubiquitous in both homes and workplaces, it was predicted that if we did not maintain capability in the area of ICT equipment then that trade deficit would bloom and grow at a phenomenal rate.

But what did the Howard government do? Not only did they not take a stance on this or fight for the maintenance and support of an industry that was competitive and had an established basis in Australia; they also helped it walk out the door. One key element—I have spoken about this issue on many occasions in this place—was of course the poor procurement policies perpetrated by the Howard government. The policies in relation to IT—government is the single largest user of ICT equipment and services in Australia—meant that government agencies and departments were not encouraged but were forced to turn to the very large overseas suppliers at the expense of the multitude of small businesses in this country that made up a complex web of supplies of both equipment and services.

In an attempt to somehow fabricate a savings measure—I have to say ‘fabricate’ because the savings measure never materialised; this is the Howard government’s billion dollar ICT black hole—they managed to effectively push out the door one of the most crucial manufacturing sectors in Australia at the time, to the point where the trade deficit is now around $15 billion and our capability in ICT equipment is vastly diminished. If you add to that the reduction in research and development funding—particularly through the 1996-97 and 1998-99 financial years—and a very weak effort in paying lip service to that neglect through Backing Australia’s Ability and other policies in the year 2000, you see a government that have tried to cover the tracks of their neglect. But one of the strongest points to be made in this discussion about the economy is that they have not been able to cover their tracks at all because the gaps are starting to show.

It is in that sort of area of high-tech manufacturing that Australia is now so fundamentally weakened. We need to look no further than our manufacturing export figures to see them on the decline, particularly in the high-tech areas. One would be quite right to ask: ‘Why on earth in the late nineties, early 21st century, are they the only government, the only Western economy, not investing in research, development and commercialisation of high-tech products and services? Why are this government now relying on a hodgepodge of industry policies to try and paper over the gaps that they have left in this very important foundation of our economic future?’ The fact is that the Howard government do not care. The Howard government are happy to allow Australia to rely heavily on the resources sector at the expense of our manufacturing sector and our high-tech area in order to try and prop up the economy.

To sustain that growth we do need to be good at these things. We need to exploit one of Australia’s greatest strengths—our educated work force. We know from travelling around the world that other countries look to the Australian education system and they pay their respects to a system that has been nurtured by government after government—that is, until the Howard government. Under the Howard government we now see another fundamental crack in the foundation of a solid economy that can sustain ongoing growth, and that is in the skills of our people—the sorts of skills that we need to underpin, whether it is in the high-tech manufacturing area, our building trades or indeed the sort of sophisticated services industries that form the basis of so much of the growth that remains.

We now see a great shortage across the skills area. I take to task the earlier comments of Senator Fifield and other coalition senators who pretend that this is not a problem. They say it is a manifestation of a strong economy. How come the former Labor government had the wisdom to look forward and open up the Australian economy, hand-in-hand with strategies that would prepare the Australian economy for stronger global engagement? We invested in skills, education and training. We looked at the VET sector and said, ‘We have to do more to make sure that our citizens are able to take advantage of the sorts of opportunities that are going to come with greater exposure to the global economy.’

No such vision guided the Howard government as they exploited the ongoing economic growth that we have experienced over the last near decade or so. No such responsible action was taken by this government. Those foundations, and our capability to export high-tech equipment and services and to make sure that we had the educated work force necessary to take full advantage of those opportunities were completely neglected. Now we find ourselves playing catch-up all over the place and fundamentally weakened in the long term. It is very hard to predict now the nature of the skills shortage and how severely it will manifest itself. But it will ensure that Australia never achieves its full potential, which it would have if we had made the most of a period of reasonably steady economic growth. That potential and the possibilities because of it will never be known.

I will leave my comments there because I would like to spend the last few seconds of my adjournment speech time in mentioning an event that occurred in Parliament House earlier this week. That was the launch of a very important economic study into the disease multiple sclerosis and how it affects the lives of people. Senator Gary Humphries and I are both co-patrons of MS here in the ACT and we were very pleased to welcome to Parliament House, and hear the stories of, MS sufferers. I would like to conclude by urging my Senate colleagues to take the opportunity to familiarise themselves with the study of the economic impact of multiple sclerosis, which has been put together by Dr Rex Simmons of Canberra Hospital. He is the project manager of the MS life study, a national project designed to improve the lives of the more than 15,000 Australians with MS. (Time expired)