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Tuesday, 11 April 2000
Page: 15713

Ms ROXON (8:15 PM) —I would like to speak in support of the Pooled Development Funds Amendment Bill 1999 and raise some issues that relate directly to my electorate. The two shadow ministers who have previously spoken on this bill have already made the important point that, whilst we are happy to support this bill, we must not forget where the idea originally came from. Credit needs to go to the previous Labor government which first introduced the pooled development funds in 1992, and the changes proposed in this bill were actually part of Labor's policy in 1998. I am certainly happy to see that the government has decided to adopt some of those policies. They are sensible and useful for many small to medium sized enterprises in this country. It is important that both the government and those on this side of the House are supporting those small to medium sized enterprises.

Previous speakers have already indicated the purpose of the pooled development fund and how it works. It is clear that it is encouraging investment by offering concessional tax treatment. The focus is not on our large industries but on the smaller to medium sized enterprises that sometimes have difficulty in raising the capital that they may need to support creative and worthwhile ideas, particularly in areas where it might create high employment but it is difficult to obtain initial capital to do so.

The bill is all about private investment being overseen, stimulated and enabled, if you like, by government involvement. There is a registration board that is made up of five industry representatives and representatives from the department and they ensure that organisations that seek to be registered as pooled development funds meet the requirements that are set out under this bill. It is a really good example of how we can be proactive in an industry area without actually going all the way down the track of nationalising industry. We can still play a role in this national parliament in assisting industries in our areas. Industry needs this support.

In my area, the western region of Melbourne, 85 per cent of businesses fall into the category of small to medium sized enterprises. That is a huge percentage, and I am told that that percentage is growing. As far as I have been able to ascertain and on the advice of the local business organisations such as WREDO, the Western Region Economic Development Organisation, no business in the western region of Melbourne has ever been the beneficiary of any PDF funding. We have to ask: why is that so when clearly we have a significant share of the small and medium sized enterprises? We are an industrial centre not just in Melbourne but within Australia. Why has there been a slow or non-existent take-up of this funding in some areas?

I would like to take the opportunity tonight to encourage the government to examine not only why some smaller enterprises have not been able to benefit from this worthwhile initiative but also the way in which the department is distributing information and how effective that information sharing is. Some of the changes proposed in the bill that we are debating tonight make PDFs more attractive to superannuation funds and to overseas investment funds. We need to look at how we make the program more attractive to local investors and to make sure that people who want to take up those funds and benefit from the PDF funding have access to those programs.

Because the pooled development funds are about supporting industry, I think everyone in this House would agree that we must ensure that adequate information is available about it, and making sure that private industry has access to that information is fairly fundamental. I certainly do not think that members of the government are the only ones in this House who have to take some responsibility for that. I intend to play an active role in making sure that our local businesses know of these changes and of the funding that might be available. Conversely, it is important that investors know what our region has to offer.

However, I feel obliged to say that, in my researching for this speech, once I knew of the existence of the Pooled Development Funds Program, I found that the information is very accessible on the web site, which is very user-friendly and quite informative. Any business that was pointed in the right direction of that web site would be able to find a wealth of information there, and I would encourage businesses to do that.

The debate is also particularly timely because in my electorate on this Friday, 14 April, the WREDO, the Western Region Economic Development Organisation, is hosting a summit called the `Western Melbourne Opportunity Summit' to be held at the Victoria University's Sunshine campus. The theme of that summit is `Making the difference'. It is worth saying that the PDF Program could be important in making a difference to the western region of Melbourne as we embark on setting our economic agenda for the next five to 10 years.

I would like to compliment our WREDO because it has done a fantastic job. To have the opportunity of spending a day with many business leaders discussing what we need in our region for the next five to 10 years is a big step in itself. These are the types of initiatives that we need to be talking about. Identifying our needs for the next decade and working towards the future with some of the knowledge that the businesses will be able to share with each other at Friday's summit are very important.

The main aim of the opportunity summit is to maximise the business expansion possibilities in my electorate and in the broader region and to encourage business investment in the region. It will be an opportunity to consider and plan for the pursuit of economic growth and prosperity for the benefit of our local community. It is time for us—as is acknowledged by the organisers, WREDO, and many of the participants—to examine and assess where we are going, what our strengths and weaknesses are in the region and what needs to be done for the next decade to make sure that we continue to be the fastest growing business region in all of Melbourne.

I must say that that will be some feat. Many of you in this House who are familiar with the western region of Melbourne will know that, although the region was the strong industrial base of Melbourne in the past, in the seventies and particularly in the eighties there was a dramatic downfall with the closure of many businesses—particularly in the manufacturing areas, and particularly light manufacturing in the metal and textile, clothing and footwear industries. We saw closure after closure of businesses in the western region. For us to be able to now stand up and say that we are actually the fastest growing business region in Melbourne is quite a turnaround in that decade. That has mainly been due to significant infrastructure developments, including the Western Ring Road, which have meant that we can really build on the advantages of the region. Being very close to the CBD of Melbourne without being in it and having the benefits of cheaper property prices and all of those sorts of things, as well as being readily accessible now to the western distributors that take us both north and further west through Victoria, have had a very significant impact on turning around the industry in the area.

I think the PDFs are something that we need to look at when we are trying to make a transition in our region from some of the traditional manufacturing areas into the information technology areas, advanced manufacturing areas and certainly the services sector. `Making the difference' is the theme for the summit; it is the key phrase, as I have already said, and the one that is relevant when we are talking about this sort of investment and growth in the area.

I would like the summit to consider how we could properly access PDF moneys as a region and whether there is some appropriate way for us to set up a regional consortium of businesses that might actually look to register itself as a PDF with a particular local focus. It appears from my research in this area that, provided all of the normal regulations were complied with, there would be nothing to prevent a consortium of local businesses—perhaps some of our more major employers in the area who do continue to invest heavily in our region, such as Toyota, Mobil and George Weston—doing that. There are a number of interested employers in the area who perhaps could be encouraged to look at taking this on and thereby providing a lot of support to all of the small and medium sized enterprises in the area who can really piggyback, if you like, on the success of some of the larger businesses. That has a spin-off benefit for the larger businesses, because they can rely on their local suppliers for the particular needs that they have in their area. Obviously, as I said, this would need to be examined in more detail, but I do think it is the sort of idea and possibility that we need to explore. I think it has great potential for our region. I think it is important that in the western area of Melbourne we do not miss out on the opportunities that are there.

We know that, if you are seeking PDF funding, you need to make sure that each fund that is set up operates independently on a commercial basis and each makes its own investment decisions. Obviously, small to medium sized enterprises have to convince PDFs of their potential commercial value and what their plans are and why they should actually be supported.

The principle of this PDF funding is to back potential high growth businesses, not just good ideas. Obviously, the emphasis then is put back on the small to medium sized enterprises in my electorate, and in the western region of Melbourne generally, to stand up and say, `This is what we need. This is what we can do well. These are the high growth areas or the areas with high potential. We just need some funding to be able to do it.' The small to medium sized enterprises need to be able to provide the PDF with an appropriate business plan, they have to have in place a management team which is committed to the process and the requirements that they must also sign on to, and they must be willing to accept and work with an equity partner.

I think this is something that must be looked at closely. There is no reason that it cannot have a regional focus. When one looks at the businesses that have already been involved in PDF funding, there is a bias, if you like, or there is certainly an overrepresentation or a large number of PDFs that have interests particularly in the mining area and the agribusiness area. It is noticeable that in recent times there are more communications and IT companies and some services interests. Many of these PDFs do not have particular industries that they seek to target, but they obviously just assess proposals to come to them as they arise. It seems to me there is nothing to prevent, as I have said before, an organisation setting itself up with a direct intention and stated objective, if you like, of assisting a particular region for particular purposes, provided that all of the other conditions are met.

I have mentioned briefly the sort of strong industrial history that we have had in the western suburbs of Melbourne and the sharp decline during the closures that occurred in the 1980s. The west is changing, and it is changing very fast, and it is building on its successes of the last decade. This is displayed in the change that we are seeing in the western suburbs of Melbourne to the backbone of the industry, which is manufacturing. Twenty-two per cent—21.9 per cent to be precise—of the people who are employed in my electorate are employed in the manufacturing industry. It is a higher percentage if you look at the manufacturing businesses in the area. Out of a total of 161,000-odd jobs in the western region of Melbourne, manufacturing still accounts for about 38,000, and we hope to be able to build on that. We do not seek to walk away from manufacturing in the electorate. Obviously, the complexion of that manufacturing is changing, and we need to look at how we can encourage information technology developments, high technology, advanced manufacturing and some further light manufacturing.

We have already set ourselves a challenge in the western suburbs of Melbourne. One of the things that the summit will address is the challenge that has been set for us to establish a strong network of small to medium sized enterprises in the information technology area linked to our education institutions and leading corporations in the area. We have some pretty good advantages that we would like to build on, including housing 12 campuses of the Victoria University in the western region. These campuses are spread across the west of Melbourne and they provide ample educational opportunities for us to ensure that we have a skilled work force, both our young people coming into the work force for the first time and those who are seeking to be retrained.

As I have mentioned before, corporates such as Toyota, Mobil, George Weston and Tenix already have a huge presence in the electorate. Tenix are looking for opportunities to build on their high-tech skills to follow on from the expertise that they have gained in building the Anzac frigates. That happens in my electorate. It has a limited life span, unfortunately, for the people who work there, and we obviously are looking for new opportunities that will support and build upon the skills that those people have.

One of the other natural advantages that we need to build on is our multicultural community. I think we can use ethnic business people much more creatively—and not just in the service sectors, which obviously seem to be where our multicultural community comes to the fore, particularly with interpreting services and a number of tourism related services, but also in assisting us to identify and develop growth markets overseas. In my electorate, I have a Vietnamese population of close to 16 per cent. They have the whole range of specialist skills that all other parts of our community normally have, but they have particular links with their home country and obviously they have a particular understanding of the Asian region. They can, I think, help us in identifying where some of those future markets are that perhaps we should be directing our new manufacturing towards. That is something that in our region I think we can build upon much more.

Local businesses and WREDO obviously need to work together to identify the projects that they would seek support for, and it then would be much easier for us to go and seek this funding. The small to medium sized enterprises in our electorate obviously also need community support. Whilst we see this as an opportunity where the federal government can assist in setting up the structure for pooled development funds, it is essentially private funding that they would be applying for. But we would also, of course, look to community networks and consumers. We need to encourage these businesses and those other businesses they supply to and purchase from to buy locally, to employ locally and to network locally. In that way, we will be able to ensure that any strengths and new developments in our region have a much wider effect in the region—and I think that that is very important. As I have said, big business has a role to play in doing that.

Finally, I think it is worth commenting on the fact that, when talking about industry policy, the debate often centres on: what role should the government play in assisting industries? Arguments put forward range from the extreme position that the government should be totally interventionist; we should own absolutely every type of industry that is possible—and I can see one of the members across the chamber shaking his head; I am merely trying to point out the range of views that people might have—to the total free marketeers—and the member will no doubt start nodding his head now that I am talking about free markets. But we know that there is a big range in between. I think this is an example of an initiative that governments can be involved in, without putting public money into business investments.

The government can provide a structure that provides opportunities for smaller to medium sized businesses, access to which they may not otherwise have. We have a role to play in helping to identify and link the creators of ideas and the people who have the initiative and the capacity to identify markets with those who have the capital to invest in these ideas and who are prepared to. This, I think, is a good example of where you can talk about a creative role for a federal government, a role which is not overly interventionist but which does help to identify where there are some gaps if you were to have a completely free market.

So I hope that there will be other opportunities for us to look at similar proposals. I know that I am amongst 10 members of this House who are currently involved in the industry committee's review of value adding in Australia—what sorts of impediments and advantages there are to adding value to our raw materials in Australia. It may be that there are a number of other initiatives that are creative, in the way this one is, which will come from our review of the various industries. I hope that that will be the case.

Obviously, the most important thing about the bill that is before us today, from my perspective, is that its aim is to look at providing jobs. It is for us to be able to grow industry, which obviously can create more jobs, which therefore affects the livelihood of many people in the regions who see the industries develop in their area. That will make the whole economy more sustainable and will help the people who are seeking to be employed in that area.

Employment is pretty central to my concerns in this House. Unfortunately, in Gellibrand, the unemployment rate is currently 11.8 per cent, which is extremely high. We have pockets of unemployment that are up as high as 16 per cent. On the latest figures, which are now a little out of date, we have a youth unemployment rate of 28 per cent. We have some major employers who are hanging in the balance as to the future, particularly as Defence continues to scale down its involvement in my electorate.

So I commend this bill to the House. If it can encourage investment, promote jobs, strengthen our economy and improve livelihoods in the electorate, then it certainly must be worth while.