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Thursday, 13 September 1984
Page: 1301

Mr BRUMBY(9.35) —I support the five Bills now before the House, and I particularly address my comments in the first instance to the Automatic Data Processing Equipment Bounty Amendment Bill (No. 2) and the Bounty (Computers) Bill. Before I address any specific remarks to those Bills, I would like to provide a little relevant background material to the development of the computer industry in Australia. The industry was developed here shortly after the Second World War and its evolution has been characterised by a rapid technological change and the development of new products. In slightly more than 30 years the industry has progressed through four computer generations, and large scale research and development is now being carried out on fifth generation systems. The industry was initially established to service the demands of government and other public sector institutions. However, advances in technology and new developments in hardware and software have led to the increasing use of computers in the private sector. More recently advances in microelectronics have been led to products being developed for the personal computer market.

In a global sense the influence of governments on the development of the computer industry has been significant. This influence has been exercised both through acquisition policies involving massive purchases of equipment and through the administrative and legal framework generally. For example, in the United States of America, the Federal Government is by far the largest buyer of computers and the only customer possessing sufficient market power to force substantial changes in contract terms or conduct patterns. Governments also usually provide research and development funds in the computer field as well as generally serving as the primary market for the largest class of computers and those embodying the most advanced concepts.

Fundamental to the role of the computer industry is the crucial part played by microelectronic componentry. Over the last three decades the world electronics industry has been revolutionised by these advances in componentry. The most important of these has been in the field of microelectronics. Although the first microelectronic components were not developed until the late 1950s, the foundations of these developments were laid in 1947 when the first solid state electronic device, the transistor, was developed as a replacement for the vacuum tube valve. The fragile construction of valves, their considerable power consumption and heat radiation, as well as their overall unreliability, had until then constrained the types of applications to which electronics could be applied. For example, the development of the newly emerging computer industry was particularly constrained by the inadequacies of valve technology. Transistors, of course, were much smaller than valves, they worked faster, had fewer failures and emitted so little heat that they could be packed closely together. They also required little power and, most importantly, they could be produced relatively cheaply. Transistor technology thus facilitated the application of electronics to a much wider range of products as well as improving existing products, for instance, transistor radios and portable television receivers.

The disadvantage of transistors in complex applications, especially computers, was that many thousands of discrete devices had to be interconnected with wires. The development of printed circuit boards alleviated this problem to some degree , but the multitude of necessary interconnections reduced the reliability of the end product. This problem was overcome in the late 1950s with the introduction of integrated circuits printed on small chips of silicon. It became possible to etch and interconnect a number of transistors on a single multiwafer chip. With improvements to miniaturisation techniques, low cost, highly reliable integrated circuits were produced containing thousands of transistors and capable of performing exceedingly complex functions. However, these were generally task specific so that their application tended to be limited to areas where large production runs could be achieved; a good example, being calculators.

In the early 1970s, the versatility of these chips was improved dramatically by the production of the entire central processing unit of a computer on a single chip. Unlike earlier microelectronic components, these microprocessor chips could be programmed by the user to perform a variety of information processing, communication and process control tasks. This development facilitated the exploitation of economies of scale associated with integrated circuit technology and thereby dramatically reduced unit production costs. The recent Industries Assistance Commission report on this industry noted that successive component developments have been used to categorise computer development into a number of generations. The report describes the first generation as vacuum tubes, the second as transistors, the third as integrated circuits and the fourth as large scale integration. However, as the report notes, it is somewhat misleading to talk of discrete generations because cost to performance ratios have steadily declined over time and there have been no distinct points between those four stages.

The advent of the modern computer and its attendant innovations in the field of electronics have meant that an increasingly broad range of functions involving the processing, storage and retrieval of information can be carried out automatically. As a result, computers, often in the form of microprocessors, are being incorporated into an even greater range of office and manufacturing equipment. It is in that sense that I refer particularly to the Bills relating to computers.

It was on 7 February this year that the Industries Assistance Commission reported on the computer hardware, software and related goods industries. The basic thrust of a very lengthy IAC report was that it recommended bounty on a fairly narrow range of computer hardware. It was the view of the Government, however, that it should introduce bounty on a wide range of computer hardware sub-assemblies and electronic microcircuits. The Bills before the House give effect to that decision. In terms of the Australian context specifically and the consequences of this Bill, there were a large number-approximately 50-of small and innovative companies producing computer hardware in Australia. There are, of course, some larger Australian companies as well. To name just a few, some of those are Amalgamated Wireless (Australasia) Ltd, Hartley David Computer Australasia Pty Ltd, Applied Technology Pty Ltd and Time Office Computers Pty Ltd. In addition, a number of multinational companies, such as IBM Australia Ltd with its personal computers at Wangaratta, Wang Computer Pty Ltd and Raytheon International Data Systems, produce computer hardware. There is also a rapidly growing number of companies producing computer based equipment to control other equipment or for inclusion in other equipment. Very pertinent examples in that area are the Johns Perry organisation, which produces computers to control lifts , and Australian N.C. Automation Pty Ltd, which produces computers for controlling machine and numerical control tools. All of those firms that I have described will benefit from the Bills before the House.

Other areas which will benefit from the new arrangements include producers of electronic microcircuits such as AWA and the Philips company, producers of hybrid circuits such as Hybrid Electronics Australia Pty Ltd, Plessy and Philips ; and producers of computer sub-assemblies, of which there are many. I think it is fair to say that the new arrangements incorporated in these Bills, including some tariff reductions in some areas, have been well received by the industry. I certainly commend the two computer Bills to the House.

I wish to make some very brief comments on the other legislation before the House. The Bounty (Electronic Motors) Bill 1984 gives effect to the Government's decision which we announced on 17 July 1984, to provide bounty assistance to the industry in Australia which produces a range of integral electric motors. The IAC is inquiring at the moment into the question of long term assistance for the industry which produces electric motors. Its final report, I understand, is due by April 1985. The IAC, in its interim report of 16 April 1984, recommended that no additional assistance be provided to the industry pending receipt of that longer term report. The Government agreed that no interim assistance was necessary for some of the smaller fractional motors but was of the view that without interim assistance, the major producers of integral motors-those with a power rating of 0.746 kilowatts and above-might cease production altogether before completion of the IAC long term inquiry. That would clearly be an unsatisfactory state of affairs and, accordingly, Cabinet decided on an assistance package of a short term bounty and tariff increase on a range of integral electric motors. The tariff duty on those motors, particularly that falling within tariff item 85.01.2, has been increased from 25 per cent to 30 per cent. That increase has applied from 18 July 1984.

In terms of bounty, a specific bounty of $14 per motor will be payable on the production in Australia of those electric motors, subject to a number of provisions. Those bounty arrangements will remain in effect until the Government 's decision in respect of the IAC report on longer term assistance is announced. It should be said by way of general comment that the package in terms of electric motors should enable local production levels of integral motors to be maintained until the final IAC report is considered. The package that we have announced is primarily aimed at assisting the local industry but certainly recognises the requirement for fiscal restraint by the Government and the desirability of minimising any resultant cost pressures on users of electric motors. I must say that I found the contributions of the two previous speakers relating to the Bounty (Agricultural Tractors) Amendment Bill and the Bounty ( Tractor Cabs) Amendment Bill of some interest. I was interested in the comments of the honourable member for Wannon (Mr Hawker) in respect of A.F. Gason Pty Ltd , manufacturers of tractor cabs in Ararat. The IAC submitted its interim report on this industry on 16 February 1984 and recommended that temporary assistance should not be extended. However, the Government, after taking all circumstances into account, decided in June of this year to extend temporary assistance, accorded to the local production of tractors and cabs, until December of this year or until the Government's decision on the IAC report on long term assistance is announced.

The temporary assistance that we have announced, combined with the current long term assistance, gives tractor production an effective rate of assistance of around 20 to 25 per cent. Removal of temporary assistance would reduce that effective rate to about 10 per cent, which is a very low rate of assistance compared with the average for manufacturing industry of about 25 per cent. The IAC's final report on long term assistance arrangements was submitted on 18 June 1984 and the Government is in the process of considering that report.

The Bills before the House are eminently sensible Bills. I believe that they are well supported. They are certainly eminently reasonable and very responsible Bills in terms of the commitment of the Australian Government to the development of Australian industry. These Bills give effect to that commitment in a wide range of industries including the higher technology industries of computing and data processing and our other industries of electric motors and tractors and tractor cabs. I commend the Bills to the House.

Debate (on motion by Mr Tuckey) adjourned.