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Monday, 29 May 2000
Page: 16430

Mr WILKIE (4:07 PM) —First let me state that, whilst I appreciate the sentiments voiced by the member for New England, I feel compelled to respond with some analytical comments based on fact and not emotion. The member for New England has made it clear that he fully supports this country's rural producers and primary sector resources. That is fine; so do I. But it is when we rely on the primary industries of this country to sustain economic growth that I begin to worry. Australia has the potential to be much more than a farm or quarry for the rest of the world. I openly applaud the efforts of all rural producers to increase exports. However, we have to recognise the facts.

By specialising in these fields, in real trade weighted terms we earn far less than we did in previous decades. In 1955, primary industry contributed 18 per cent to GDP and employed 13 per cent of the population. In 1995, these figures are eight per cent and seven per cent respectively. Furthermore, in 1994, manufactured goods contributed 76 per cent of world merchandise trade compared with just 12 per cent for primary products. It is a dangerous course, indeed, to rely on farming and mining alone to sustain a modern economy.

I would like to impress upon members the simple fact that we are faced with a choice, and that choice is stark: do we have a future—as suggested by Dr Ohmae of McKinsey—as `the brains trust of Asia, with new ideas, technology and sustainable industry', or do we take the path of a low wage, less advantaged society with inherent job insecurity? If Australia is to become a truly competitive international player, our only course of action is to increase the proportion of our economy engaged in high-capacity industry design, development and production. This will lead to more employment at a higher rate of pay and an increase in the skills and education in the community.

Where is the drive from this government towards this objective? Is it coming from the minister for industry, the minister for education? The truth is that there is no drive from this government; it is non-existent. These ministers have only one perspective—that of discordant discipline, neoclassical economics. The tired rhetoric constantly espoused by the government stands in direct contrast to the policy measures that are desperately needed by this nation, and these can be summarised in two ways.

Firstly, we cannot solely rely on our agricultural and mining industries. As we are aware, elaborately transformed manufactures, ETMs, have been for some time the largest and fastest growth area in world trade and have exceeded services. They have significant employment and technology effects and integrate well with the purposeful concept of the knowledge nation. This policy relies on unimpeded skills and an educated society. The government may not be listening, but it is the only alternative to a low wage and low skill base economy.

As notable writers such as Dr Ian Marsh have indicated, it is the pursuit of competitive advantage rather than orthodoxy which has underpinned the development of postwar German and Asian economies. It bears mention that, whilst the quality of improvements in our manufacturing sector were noted, especially in the late 1980s and early 1990s, not enough has been done to capitalise and improve trade in high value adding, knowledge intensive ETMs.

Secondly, this government's policies to create and develop new markets and products through innovation can be summarised in one word—dreadful. Investment levels have imploded from both industry and government under this minister. Federal funding for universities has fallen from 0.94 per cent of GDP in 1996 to just 0.82 per cent in 1998. Federal spending on science and innovation has fallen to 0.64 per cent and, lamentably, business research and development has fallen to 0.7 per cent. In contrast—and as Laurie Oakes wrote in the March edition of the Bulletin—the OECD average is 1.4 per cent.

I would be happy with the acceptance of a more hands-on approach to policies in the portfolios of industry, science and education. I would be delighted with this government ceasing its ideological preoccupation with the notions of comparative advantage, small government, small budgets and all the inherent nonsense that accompanies them. Whilst still providing support for agriculture and mining, it is about time we realised that we cannot live off the sheep's back or the open pit to guarantee ongoing economic growth. Australia needs and deserves more. (Time expired)

Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The time allotted for private members business has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.