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Thursday, 11 May 2000
Page: 16364

Mr LAURIE FERGUSON (10:35 AM) —The report of the Standing Committee on Industry, Science and Resources is obviously attempting to tackle a fairly major difficulty for this country—the question of our lack of development of raw materials. There is a variety of ideas as to why we have had this problem over decades: at previous stages, domination by overseas interests whose focus perhaps was not centred on Australia's interests; our geographic location at the end of trade routes; internal transportation problems; savings levels in this country; and lack of investment. They are amongst a wide variety of possibilities as to the reasons for a very fundamental problem of our economy.

I know this is a preliminary report, but if I had been involved from the start I might have given a somewhat more negative analysis of our situation. The report is essentially very positive about our circumstances. However, at pages 25 and 26 of the report, there is an admission that, with respect to the contribution to gross value added by the manufacturing sector in Australia, it constitutes only 14 per cent, compared with 31 per cent in Germany, 29 per cent in Japan and 26 per cent in France. It is stated at page xvii that, despite this supposedly strong performance, the total contribution of elaborately transformed manufactures to Australia's overall export performance lags considerably behind many other countries. I think that is more the reality than the overall tenor of the report, which essentially is that we are not going too badly and that we have improved over recent years. We have perhaps improved over recent years because of the extremely low base from which we moved. I think it is a fundamental crisis for the country, quite frankly, that we have failed in this sector to develop these areas and that our manufacturing and metals industries are under so much challenge.

I associate myself very strongly with the comments made by the member for Swan. He held the view, to which I subscribe very strongly, that doctrinaire, almost zealot-like adherence to free market economics, that supposedly the market will solve all difficulties, is very questionable. I reiterate that this is a preliminary report, but on page xx it says that an open and efficient regulatory framework and transparent and consistent ground rules are about all that we require. There are also a few sentences about resource security and land access. The degree to which there must be government assistance to industry in order to develop this country has been left out of the report at this stage.

I now focus on an area that interests me, just as it interests you, Mr Deputy Speaker Nehl. The report contains two pages which cover the area of forestry. On page 46 the Department of Agriculture, Fisheries and Forestry is quoted as saying:

Australia's lack of manufacturing capacity has seen us exporting relatively low value unprocessed wood while importing high value processed paper products. It is expected Australia's trade deficit will continue to increase unless there is substantial new investment in pulp and paper manufacturing capacity. Over recent years, uncertainty about access to forest resources and the high environmental standards expected in pulp mills have discouraged investment in value-adding operations such as pulp mills.

Indisputably, they are two of the reasons why we have the problem. Indisputably, it is a very major national problem. In a press release in the last few days, the minister for forestry noted the obvious—that Australia uses 20 million cubic metres of timber each year and we import 7.3 million cubic metres of that timber. The reality is that we do have a $2 billion deficit in the paper and wood area. The other reality which is fundamental to this report is the fact that we essentially send out pulp and we bring back processed and value added materials. I note the comments made recently—and I think they are right on the ball—by Bridson Cribb at the Pulp and Paper Manufacturers Federation of Australia conference. At page 7 of his speech he said:

As I have noted earlier, nearly 4 million tonnes of domestic pulpwood is exported every year as wood chips. As a result, with the possible exception of Tasmania, it is surprisingly difficult to identify sufficient concentrations of competitively priced wood resource to support a world-scale pulp and paper mill.

So essentially it is all tied up in pulpwood, except in Tasmania, and, as a person in the pulp and paper industry, he cannot see a real likelihood in the short term of much happening. He went on to say:

However, there is a serious public policy issue here. If the government wants value-adding of Australia's wood resource to occur in Australia, then there needs to be a clear recognition that the export wood chip trade is directly inimical to this objective. It has the effect of making domestic pulpwood uncompetitive, while at the same time it fragments the remaining wood resource that is available.

At the conclusion of that speech—as I said, representing the pulp and paper manufacturers—he said:

I certainly hope that the Government's strong and often repeated desire—

I stress the word `desire', not `action', which is my word—

to reduce the trade deficit in pulp and paper, by adding value to Australia's fibre resources, is reflected in the decisions it will take.

He had a hope then, and quite frankly it is very unfortunate that this budget has not answered his hope. That hope of 4 April has been sadly repudiated in the current budget by the actions of the Minister for Forestry and Conservation. Since the minister went to the portfolio he has made so many speeches and done so much sloganising around this country about how dreadful our trade deficit is in wood and paper products. We know that—the industry knows it, the Australian people know it and the newspapers know it—and he is just repeating a reality which is out there without doing anything about it.

The deficit has deteriorated further during his control of the portfolio and during all these speeches, and it would have deteriorated further if the pulp prices had not been forced down because of the recession in Asia. This budget, as I said, is a very sad answer to what this report is on about: trying to develop manufacturing and value adding in this country. The budget gives not one dollar to the development of the forestry industry.

The minister talks about FISAP funding in the area of $80 million, but the reality is that the $80 million is money that was allocated by previous governments. It is not new money; it has been there for the last four to five years. The reason he is now talking about spending it is that he suspended it during the last four to five years. He suspended money in New South Wales, he suspended money in Queensland, he had delays in Victoria and he is refusing to negotiate an RFA in Queensland. The reason this $80 million is still around for him to talk about and to try to present to the Australian people as budgetary allocation is that he has not spent it previously.

The other worrying aspect of the minister's management of his portfolio is the action agenda. That is the other thing he talks about every second day: his action agenda. We know there is a trade deficit. He keeps telling us that and that he is going to do something about it—although he has not done anything about it—but the other big news every day of the week is his action agenda. That was promised in late 1998; that was promised for July last year. The only big announcement he has made in this budget is that he is going to delay it until June this year. So the Australian industry has been waiting for 1½ years for this action agenda. The reality is that there has been no action in this portfolio, except for a belligerent attack on a variety of state governments regardless of their political affiliations.

We know the mess that has been created in Western Australia, the fact that the Western Australian government had to walk away from the RFA process over there. Quite frankly, I do not recall in my political experience in this country anyone on either side of this House making such ridiculously partisan comments as the minister for forestry did recently when he said that if the Queensland people threw out the state government then he would negotiate an RFA. The industry—the sawmillers, the workers—and the small towns that depend on this industry are basically being told that the minister will not negotiate an RFA with the government until Mr Borbidge is elected.

If anyone has any doubts about this minister's preoccupation with petty partisan politics, one has only to look at the situation in New South Wales. We heard a variety of tirades from him in the House about the four agreements in New South Wales. Quite frankly, when there is a controversial agreement such as the one currently under review, people do not take any notice of him, because he has put on the same tantrums and made the same tirades about the other three agreements. Eventually, months later, after saying how dreadful they were and that he was going to stop this and he was going to do that to put the Carr government in its place, he came along and meekly signed those agreements and then put out documents in his budget statement boasting about how many national parks he had supported in New South Wales.

He spent the time of this House, and the time of the parliament in question time, telling us how dreadful all these New South Wales agreements were. He then put out a press release this week saying, `Aren't I fantastic? I have created all these new national parks in New South Wales. It is all my work.' These are the same national parks that he said had been locked up by the timber industry and which he rejected in past months.

If you have any doubts about how much this is against the interests of the industry you only have to look at two other aspects of it. There is not only the fact that he says he will only negotiate with the new government in Queensland if the people change their minds but also the fact that people in northern New South Wales have been waiting for many months to get FISAP funding. There are sawmills that are dependent on that money for their survival, investment and future. They were delayed while he played politics and said he would never sign this agreement because it was horrible, dreadful and the end of the world. He then came along and signed it after keeping those people waiting for many months.

He has said in the last week that he is going to move their money—the money that they were committed to and owed by the government—from one part of New South Wales to another to try to help the member for Eden Monaro. We have a situation where northern sawmillers are being deprived of money that is genuinely theirs as part of the RFA outcome and he is going to move it to another part of the state. There are certain standards in regard to how we play industry development in this country that should be quite separate from this kind of partisan attitude.

Finally, in Queensland he was so desperate that he had to write to the sawmillers. Letters went out to the small sawmillers in Queensland under his signature saying, `Please give me some reasons to oppose the Queensland agreement. Please write to me and tell me why it is bad.' Yet, some time later, we have six or so coalition members signing letters against the Queensland Timber Board, which represents the industry, the equivalent of Col Dorber's organisation in New South Wales and the equivalent of NAFI at an international level. That timber board is standing by the agreement. We have this minister trying to go round the place to whip up a bit of political partisan disputation and make that the main game in town rather than do what this report is seeking to tackle: value add in this industry.

We know that the 1992 national forest statement was a step in the right direction. The current government had a lot of slogans and platitudes about how worth while it was and how they were going to adhere to it, but the reality in this budget is that not one cent is going to help value add in the forestry timber industry.

Debate (on motion by Mr Wakelin) adjourned.