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Monday, 29 August 1994
Page: 470

Senator COLSTON —My question is directed to the Minister for Industry, Science and Technology. I understand that a major forum of Australia's leading manufacturers and policy makers in this area is meeting today and tomorrow in Melbourne to determine strategies for the future development of the Australian manufacturing industry. In view of the importance of Australian manufacturing for both the domestic and export markets could the minister inform the Senate of the current state of our manufacturing sector and the government's policy agenda for its future development?

Senator COOK —Senator Colston has always had an interest in industry policy, so it is not surprising that he should ask such an important question today. This morning I was pleased to open by satellite the Australian Chamber of Manufactures conference, Australian Manufacturing `94: The Way Forward. It was a chance to evaluate the performance of the Australian manufacturing sector and look to the future and anticipate future developments that may impinge on it.

  Looking at the performance of the Australian manufacturing sector, it is a cause for all Australians to celebrate, indeed, a very good performance. According to the Bureau of Industry Economics, manufacturing has outperformed the rest of the Australian economy: manufacturing represents 15 per cent of GDP in Australia but is responsible for 25 per cent of growth in the Australian economy since 1991.

  The manufacturing recovery now is much stronger than it was after the 1982-83 recession. In the first quarter of 1994 alone it created 11,300 new jobs in Australia, the third consecutive quarter in which it has added to employment growth in this country. The latest investment figures were brought out by the Capex survey referred to in the Senate on Thursday. Those figures show a massive increase in the amount of investment in new plant and equipment, indicating that the Australian manufacturing sector is gearing up to harvest the possibilities of the Asia-Pacific market and to embrace new technology to become more efficient and more competitive for this country in the rest of the world.

  The new plant and equipment shows a 14 per cent increase in growth since the last quarter. That is the highest level of growth in investment in plant and equipment since September 1990. It demonstrates that business confidence is extremely high. It also shows that what this government said in the 1994-95 budget about business investment is on track and that the target of 14.5 per cent growth in business investment based on the Capex findings last Thursday, and on what we have seen in the balance of payments figures today, is on track and will be realised.

  Another marker of how manufacturing is performing is exports, and here the particularly pleasing feature is that the exports of the most complex and sophisticated manufacturing goods have increased dramatically out of Australia. ETMs, as we classify them, have increased by some 19 per cent in the last five years. We are increasingly an exporter of high quality competitive manufacturing goods. That increase for Australia is faster than the increase in other OECD countries in the world. That increase is as a result of steps taken by this government in internationalising the Australian economy. The government was pleased to put down a package of $630 million in the white paper to accelerate this growth.

  The focus in Australian manufacturing is on innovation, the uptake of new technology, the development of leadership and management skills and the linkages between investment, trade and industry. All those factors will be canvassed at this conference, and all those factors are key elements in the government's policy agenda.

  Let me conclude by saying how disappointed I am to see that John Hewson has been moved out of my portfolio area. He was bringing a new invigoration from the opposition to policy formation. I do not agree with his policy views, but one can say that at least he was active on that front.