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Tuesday, 26 March 1985
Page: 817

Senator SHORT(6.03) —I join the Leader of the Opposition, Senator Chaney, in this debate on the Bounty (Commercial Motor Vehicles) Amendment Bill 1985 to make just a few comments. The proposal before the Senate is for a holding operation to extend the existing bounty to the end of June with the possibility of a further extension to the end of December this year. I guess that the appropriate time for a full debate on the industry and the subject matter generally would be when the Government has made its decision on the final report, rather than at the moment. As Senator Chaney did, I welcome the opportunity I will have at that time to debate the very real issues facing industry in Australia generally. There is a much greater recognition now on both sides of the Parliament, throughout the community generally and, gratifyingly, throughout industry itself, that we have some real problems in Australia in terms of the development of industry policies to create a vibrant and viable manufacturing sector which we all want and which collectively we will have to do a lot more than we have done in the past to achieve.

I would like to register a few points today on the subject. Senator Chaney has outlined the background to the Bill, which I will not go over. I reiterate his point, though, which I think is important, that the Government has now had the final report of the Industries Assistance Commission on heavy commercial motor vehicles, parts and accessories for more than 12 months. It has not yet announced a decision on the report. That is the reason we are debating the interim or holding measure now. It is a matter of regret that it has taken so long for the Government to reach a decision. If the Government really wants to encourage business confidence in Australia it will have to do a better job than it has done in terms of getting out decisions for industry more quickly.

Unless industry has a clear idea of the environment which the Government will set for it and, therefore, the environment in which it is to operate over a lengthy period ahead, it is disruptive of business confidence and that flows through to all sorts of other things, such as business investment, not only in this industry but also in other industries because it will be seen as a reflection of the difficulty the Government is having in taking decisions in various areas affecting industry. So business confidence is a very relevant aspect in terms of the timing of government decisions on these types of matters. As I said, it is perhaps a typical reflection of the Government's inability-I understand the problem, I think-to come to grips with the very many problems facing this industry and industry generally. So I hope the decision will be forthcoming shortly. The longer the delay, the more uncertainty will be generated.

Although this Bill is only a holding measure, it deals with a very important industry because of its relevance to the road transport industry in Australia. Australia is very heavily reliant on the road transport industry. We have a huge land mass. We have huge distances to traverse in the carriage of goods, materials and freight. An efficient and cost effective source of heavy commercial vehicles is of great importance to our whole cost structure because freight costs are an important element of our overall cost structure, more so than in most other countries. In addition, the transport industry is an important contributor to our gross domestic product. Some estimates of its contribution to our GDP, when everything is added, put it at what seems to me to be the staggeringly high figure of 25 per cent. It has been estimated that 25 per cent of gross domestic product is involved in some shape or form in the transport industry. Whether that figure is right or not, it is certainly a fact that the transport industry is a very important contributor to our GDP.

Given the importance of an efficient heavy commercial vehicle industry to Australia, of all countries, it is a sad reflection on our industrial expertise and competitiveness that we do not have such an industry in Australia. As I understand it, since the Rockwell company moved its manufacturing base from Australia in the last couple of years, there is now not one heavy vehicle manufacturer in Australia. We have a number of importers and assemblers which do nothing much more than put together components, either imported or local, almost as in a Meccano set. That is not only a sad reflection on our industrial expertise and competitiveness but also, perhaps, an apt example of what is wrong, to an important degree, with Australian manufacturing industry today. It is, as I am sure everyone in this chamber believes, a serious situation. I cannot believe that anyone in this chamber would not agree that a healthy, efficient manufacturing sector in this country is of vital importance to our future.

We ought to be able to manufacture heavy commercial vehicles in Australia at a cost and price competitive with overseas manufacturers. Although we are a small market, we are the largest per capita user of heavy commercial vehicles in the world. Vehicles made here have a natural freight advantage compared with imports. The freight costs associated with the importation of heavy commercial vehicles are very heavy, so we have a natural advantage. The industry does not rely on a volume throughput or economies of scale. Virtually all the heavy commercial vehicles are custom built to meet user requirements, and there again the Australian manufacturer ought to have a natural advantage because he is on the doorstep of the user. With the degree of custom built characteristics of these vehicles, that ought to be a very significant advantage.

In this respect, the industry differs completely from the passenger motor vehicle industry. I say to the Minister for Industry, Technology and Commerce, Senator Button, that I assume that the Government's passenger motor vehicle plan will not have any relevance to the final decision that the Government takes on this industry. I would be interested in any comments he may have on that. It seems to me that the two industries are very different. When the final decision is made, I hope the Government will act on what seem to be some serious defects in the present arrangements confronting the industry. Although I have read the report and can see the history of how it has happened, it surprises me and I think it is an unsatisfactory situation that the bounty applies only to some components. It applies to only a very limited number of components. Even within these, in-house components, as I understand it, are not bountiable. That seems to be a questionable situation in logic.

It appears that the industry is saddled with too many assemblers. There is a small domestic market but I wonder what the industry has done, if anything-I would be interested in any information that the Minister may have-to attempt to export. I would not have thought it was beyond the wit of an efficient industry in Australia to be able to export some of these vehicles given our experience particularly in their usage and manufacture. The industry obviously suffers from heavy labour and other costs. It appears that some of the main problems facing the industry are those which face manufacturing industry as a whole. There are some specific questions I wish to put to the Minister if he can deal with them in terms of this report. It is not clear to me who are the main beneficiaries of the protection being accorded. I wonder whether the assistance that has been granted over a lengthy period has in any way improved the industry's viability. One would have to question that. Given that there is not a single manufacturer as such in Australia, that the component manufacturers are very diverse and the manufacture of components for the heavy commercial vehicle industry is only a small part of their production, I wonder whether any cost-benefit analysis or similar analysis has been done by the Government in respect of the extension of the bounty. Although it may be a little premature for the Minister to comment on this, I wonder what he thinks about the long term prospect for this industry.

They are a few specific questions about the industry. I think they reflect overall the need for policies to improve industry generally. In recent days we have heard from the Minister, in the form of answers to questions and otherwise, about the range of problems facing industry in Australia. I agree with him that there is a wide range of problems. It is not just a matter of wage rates, protection or any other individual thing, although my personal view is that wages and wage related costs is the major factor. But there is obviously a range of problems. There are wage costs, the whole question of technology and its application to an industry such as this and, above all, the question of productivity in the industry and in Australian industry generally. I think that we know most of the problems confronting an industry such as this, which are typical of those in many other Australian industries. We know the problems and we have identified many of them. We may not have got their weighting quite right but overall I think that we know most of the problems. The question that the Government really has to face in the first instance is how we actually come to grips with solving those problems in a practical way.

I will leave my comments there. I have posed some questions. I do not expect that the Minister will necessarily be able to answer them all at the moment but they are the sorts of questions that we ought to be asking ourselves and putting to industry. I hope that this type of vehicle for debate that we have here today will reappear on other occasions because a wider, fuller and rational debate on-and exposure of-some of the problems and the opportunities facing Australian industry is needed. It is one of the critical issues that we as Australians have to face.