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Thursday, 5 May 1994
Page: 324

Senator COLSTON —My question to the Minister for Industry, Science and Technology relates to a particular factor necessary to ensure the success of some of the initiatives in Working Nation: the White Paper on Employment and Growth. Is it a fact that access to finance is the basis of growth for businesses, underpinning innovation, enabling new technology to be harnessed and allowing new markets to be exploited? If so, can the minister advise what the government is doing to close the finance gap for business, in particular to allow growth in investment to proceed in order to generate sustainable employment growth?

Senator COOK —I would like to pick up where my colleague and leader, Senator Evans, left off and make the point that the economic settings in the macro economy for Australia are very positive for investment. We do have a high level of growth compared with OECD countries—the four per cent estimated by Westpac this year is going to five per cent; we have a low level of inflation of 1.4 per cent; we have attractive interest rates; we have a high and record profit share; we have low levels of industrial disputation; and, importantly, we have increasing competitiveness in the Australian economy. We are a going, ticking over affair and we are a good site for investment. That is underpinned by a burgeoning export performance in the world, specifically for elaborately transformed manufactures and sophisticated services in the Asia-Pacific market.

  There are several signs of investment pick-up in Australia, the most recent being the ACCI-Westpac index on capacity utilisation. If one looks closely at yesterday's balance of payments figures one will see that there is a pick-up in investment in plant and equipment, automatic data processing and transport which will underpin a greater productive capacity by Australian companies. The economy is still heading towards fulfilling its full capacity limits as well.

  I am asked in this question about access to finance for small to medium business. Senator McMullan is well placed to talk about access to finance for export. I will leave that area to him, but a number of exciting initiatives have emanated from him in his portfolio.

  In terms of the portfolio of industry, science and technology, the white paper set out yesterday a number of new things in the area of access to finance for small to medium business. If one looks at the retorts and responses from the industry organisations, the business councils and the employer groups around Australia as to how they see these measures, one will see there is a unanimity of view with approval and support for these measures. They are heralded as well-targeted, well-timed and necessary, and will underpin the competitiveness of Australian industry.

  I refer to the pooled development funds that Senator Evans referred to a moment ago. The tax rate for those funds has been reduced to 15 per cent for investment in small to medium enterprises; infrastructure bonds have been modified in their tax treatment—they have been extended across a range of areas and they will, indeed, fund important capital works in this country. In addition, I mention the exciting new program we are establishing with the chambers of manufactures around Australia, a business angels-type program to enable would-be investors to meet investment vehicles in small to medium companies and, with the chambers of manufactures, lift their levels of investment and equity.

  The regional headquarters initiative has abolished the dividend withholding tax across the board and provided a write-off for the transposing to Australia of necessary plant and equipment and location expenses, as well as an attractive series of reasons why international companies should now locate their regional headquarters in this country. We have removed the training guarantee levy for two years, and that has been hailed as an important incentive.

  When these things are put alongside a very low company tax rate in Australia, and we take into account the fact that economic recovery is now pushing the economy closer to its capacity limits, one expects that the signs of increased investment will pick up even further. That is good news for all of us. It is certainly good news for Australia and, importantly, good news for the unemployed. It is also good news for those in industry who will lead the charge in creating the jobs that are necessary.