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Thursday, 5 May 1994
Page: 334

Senator SPINDLER —My question is directed to the Minister for Industry, Science and Technology. I refer to yesterday's white paper and yesterday's reported current account blow-out and ask the minister the following: do the piecemeal items such as the extensions of the R&D tax concession, support for regional development organisations, and increased funding for CSIRO indicate that the government has finally recognised that it cannot sit back and rely on the economic recovery and must instead develop a strategic industry policy to deal with Australia's structural problems? But when will the government muster the courage and intellectual rigour to develop such an industry strategy and include the measures which should have been in the white paper. I refer to industry-specific strategic plans to boost exports and replace imports; abolition of payroll tax; substantial government investment in regional infrastructure; a venture capital development fund; a small business loan insurance corporation; small business access to export markets development grants; requiring superannuation funds to invest in R&D and venture capital; and tax incentives for training? (Time expired)

Senator COOK —As I said earlier—and it was emphasised amply by Senator Gareth Evans today—the Australian government is operating the recovery from a strong macro-economic platform. We have pitched our white paper at ensuring that that recovery is long, endured and sustainable—that is the key thrust of what we have engaged in here. We have approached it by removing impediments to individual firms to be more competitive, to back private initiative. The two themes that run through the industry section of the white paper are ensuring that we build competitiveness within our firms and operating within a competitive environment.

  Senator Spindler asked why we did not include a list of things. Perhaps I should send him a copy of the white paper because if he had read it he would have found that it addresses many of the points that he raised. For example, he asked about substantial government investment in regional infrastructure. During question time today several ministers have spoken about infrastructure bonds. I commend those bonds to Senator Spindler as a way in which the private sector can invest in infrastructure development in Australia. In the white paper the government announced a pool for the development of further infrastructure.

  Senator Spindler asked about a venture capital development fund. What does he think a pool development fund is? I do not know why he thinks the change in tax rates from 25 per cent to 15 per cent for small to medium enterprises does not create a pool of funds for venture capital but, also importantly, development capital for small to medium companies.

  Senator Spindler asked about small business access to export market development grants. I do not know whether I am wrong but I thought earlier in question time Senator McMullan explained that the export market development grants had been made more accessible for small business; so what Senator Spindler asked about has been done.

  Senator Spindler asked about a small business loan insurance corporation. We have not embraced that. But I commend to Senator Spindler what we have said about the Commonwealth Development Bank. I emphasise that that bank is a lender of second resort which operates farther out on the risk spectrum than the private banks. It had a tremendously good record through the 1980s when some of the banks lost the plot of always returning a positive balance sheet. It has done very well in the rural sector and it is doing increasingly well in urbanised Australia. The bank is a facility that small to medium business in this country appreciates. The bank will be promoted even more, so that business has even greater access to it.

  Senator Spindler asked about compulsion for superannuation funds. We have not compelled superannuation funds to direct their investment. We do not apologise for that. We have provided incentives for those funds to invest in strategic areas of the economy. We have enabled fund managers and the people in those funds to exercise their discretion about prudential investment to ensure that they judge the merit and value of investment but in a way in which they are attracted to the areas of strategic need.

  Senator Spindler asked about the abolition of payroll tax. That is a state rather than a Commonwealth matter. We have covered most of the matters raised by Senator Spindler; therefore, I suggest that he read the white paper more fully. I will be delighted to talk to him about those measures expressly. While parties need to differentiate their products, it is wrong to do so by claiming the government has not done certain things when in fact it has done those things.

Senator Vanstone —Mr President, I raise a point of order. I wonder whether you would like a bell attached to the light so that you would more readily be able to see when a minister's time was up.

The PRESIDENT —I will take advice from other sources.

Senator SPINDLER —Mr President, I ask a supplementary question. I wonder whether the minister really thinks that $10 million for regional infrastructure is a substantive support for infrastructure when there is room for at least $1.2 billion for absolutely essential works. If he thinks that incentives on the cheap will do the job of discharging the government's responsibility on industry policy, then let us wait for the results. We have not seen any results so far.

Senator COOK —That is because the white paper has been down for about 22 hours. Senator Spindler can attack me if he wishes, but I would plead that we have not had enough time to get these measures into place to show the direct results of them. I commend Senator Spindler to the macro-economic settings, the growth in this country, the level of inflation, the level of interest rates, the high profit share—all of those things that indicate that this country is going a long way.

  What we have done with infrastructure bonds enables the private sector to invest in infrastructure development in this country to complement public sector investment. That is an important development. Senator Spindler cannot say that we have given insufficient funds to infrastructure development just by looking at public outlays to infrastructure. Take a holistic picture. Look at the potential for what infrastructure bonds can do, particularly in the hands of regional development organisations able to fund their own particular infrastructure needs directly. (Time expired)

Senator Gareth Evans —Mr President, I ask that further questions be placed on the Notice Paper.