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Tuesday, 29 May 1984
Page: 2018

Senator PETER RAE(3.42) —The Opposition welcomes the fact that at last the Government has produced its much vaunted plan for the Australian motor industry, more than six months after it received the Car Industry Council report . The program is, however, one which is acknowledged to be complex. A very detailed statement has been attached to the statement made by the Minister for Industry and Commerce (Senator Button). Further parts are yet to be outlined. The Opposition acknowledges that many beneficial proposals are involved in the total program. However, at the outset I should say that the statement just made by the Minister is full of glowing promises and glowing, self-contratulatory statements about his achievement.

The fundamental question facing the Australian motor industry and the Australian people is how Australia can become internationally competitive. The Opposition clearly recognised that when in government. I ask the Minister how this new variation of the Fraser Government plan will achieve that purpose. How does it support Mr Hawke's recent statement, when making a solemn commitment only six weeks ago, that the new scheme would aim at the maintenance of motor vehicle production at about its present level, when the Minister himself has acknowledged that it will not achieve that purpose? What people in the industry want is jobs. I have talked to those in the industry and to union representatives. I find an overwhelming fear in the industry that they will lose their jobs. They want jobs; they do not want changes in conditions or variations being imposed on them so far as centralised wage fixing systems impose changes on industries that are not in a position to sustain those changes. What people need in order to have jobs is a sensible wages policy. Amongst all of the complex proposals in the Minister's statement and the attached documents, not a word appears to address the essential element, a wages policy; not a word appears to address the second major element, a reduction of the cost of bureaucracy and regulation.

The wages costs, wage on-costs and costs of bureaucracies as well as State charges and government charges, are the burdens with which Australian industry is trying to cope; burdens that are making Australian industry uncompetitive with other countries. It is not lack of skills or capacity that is making Australian industry uncompetitive; it is the lack of a chance, and the Minister' s statement does not address this question. Far from reducing bureaucracy, this Government proposes to create yet another qango, the Automobile Industry Authority. There the Government will have the opportunity to second-guess the industry, to interfere with it, to make it less flexible, and to attempt to judge for the industry, and thereby destroy the fundamental basis claimed in the statement of having market forces make decisions as to who should survive.

Throughout the Minister's statement is a strong authoritarianism that amounts to the virtual corporatisation of the Australian motor industry. There is no doubt that a restructuring of the Australian motor industry is and has been necessary. As I said before, the former Government, the present Opposition, has recognised this; we support proper measures taken to restructure Australian industry. But the restructuring must be designed to achieve international competitiveness. That cannot be done when the industry is over- burdened with a wages system that will not work and when it is overburdened with red tape and bureaucracy which impose huge costs.

The Government's plan is far more draconian in its consequences to employment in the Australian motor industry than was the Fraser Government's plan. The result by the early 1990s will be that fewer Australian cars will be produced in Australia; and those that are will contain a lesser pecentage of Australian- manufactured component parts. It appears that many component parts manufacturers will be hard hit. I wonder where in the plan the component parts manufacturers get a really honest chance to be able to preserve their role in Australian industry.

Senator Watson —They are the big employers.

Senator PETER RAE —As Senator Watson says, they are the big employers. In the short term, the consumer will be affected adversely by increases in the prices of some imported vehicles by as much as 22 1/2 per cent and an overall increase in imported vehicle prices.

The Minister's statement talks about encouraging Australian ownership. Perhaps that is intended to be some form of sick joke. After the statement the Minister has made, and the acknowledgment he gives of the very real problems that the industry is facing, and will continue to face while it has to put up with the wages policy and bureaucratic and regulatory approaches, can one imagine anyone in his right mind wanting to make new investment in this industry? Assemblers, such as those involved with Volvo and Peugeot and a number of other areas of assembly of motor vehicles in Australia, will be very hard hit. This will be the end of their prospects. Everyone who loses a job in an assembly plant will remember who it was who lost him his job.

Claims that employment may increase in the longer term are made inconsistently between pages 4 and 10 of the Minister's statement. On page 4 the Minister says that the industry's capacity will improve even further: On page 10 he acknowledges that inevitably employment levels in the industry will be reduced by the 1990s. That is the sort of care and attention given by the Minister and the Government to this statement. I draw the attention of honourable senators to those two totally conflicting assessments on pages 4 and 10.

With export facilitation provisions, the Government has gone back on yet another of its election promises. I do not need to detail that. The public leaking of the various considerations in relation to the restructuring has created great uncertainty and has added to the creation of the unemployment to which the Minister referred. Car sales in April this year, the month just passed , were 19 per cent down on those for the previous month; that is, 6 per cent down in seasonally adjusted terms on the previous month. As I said, people in the industry want jobs; they want a wages policy and they want a reduction of red tape, of bureaucratic interference. If the Government were to get out of the hair of business, that would contribute to the achievement of those jobs. This Government appears to be going down the very opposite track.

In summary, we support the need to restructure the industry but assert that the fundamental restructuring must be aimed at achieving international competitiveness. I ask again: Where does this policy achieve international competitiveness? Many of the positive proposals have already been introduced by our trade competitors. Many of the things which are being done are things which would have had to be done if Australia is to preserve its position at all. But with those things being done, we will still be behind the other countries which have flexible wage policies and flexible bureaucratic approaches and which are not overburdened with costs imposed by government, particularly by State governments.

For the taxpayer there is greater cost. For the consumer there are likely to be higher prices in the short term and no promise of lower prices in the longer term. For the employees there is to be retraining-but there is to be unemployment in the first place and then retraining. For the investor there is the prospect of loss of investment. One could only ask: With all of that, is it really necessary to burden the taxpayer with a token $150m of funds for research and development when one knows what the real cost of research and development in the motor industry is? Some people may get a benefit, particularly some of the component parts manufacturers. But the real benefit to the motor industry as a whole cannot be achieved with that sort of money coming from government. It is an act of tokenism, but it will be a cost to the taxpayer, added to the cost of running yet another section of bureaucracy, yet another qango.

In summary, we ask the Government to face the reality of the real need to achieve international competitiveness and to attack the fundamental problems of wage and wage on-costs and their impact. The Australian motor industry should be given a better chance than this to be able to survive. Having had relatively little time to study the detail of the plan which, as I said, is very much more detailed than the statement read out by the Minister, I seek leave to continue my remarks later so that the Senate may continue this most important debate.

Leave granted.