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Wednesday, 8 August 2001
Page: 29403

Mr HORNE (11:47 AM) —If there is a debate that epitomises the difference between the government and the opposition, this debate on the Taxation Laws Amendment (Research and Development) Bill 2001 is it. On the one hand, you have the government that has the philosophy that knowledge is for sale, and that information is out there on the shelf and industry can go and get it at any time. On the other hand, on this side of the House you have a party which believes that information and knowledge have to be developed in a true Australian tradition and that education should be nurtured.

The government's current attitude to Knowledge Nation is very reminiscent of the old school playground where the class swot was always identified as a swot and was derided by people who did not understand him. When I see the Treasurer of this country stand up and refer to Knowledge Nation as noodle nation, that is exactly what I comprehend of that person. He does not understand it and he does not try to understand it. He is trying to cover up the shortcomings of this government, because this government has an absolutely horrific record as far as R&D is concerned.

There is no doubt that we enjoy a high standard of living in Australia compared to world standards, and much of that can be attributed to our ability and readiness to embrace technology and innovation. Be it mobile phones, personal computers, the generation of electricity from solar energy, Australians have always shown themselves to be amongst the highest per capita consumers in the world of innovative products. We have developed world ranking scientists, engineers, surgeons, farmers and horticulturists. It does not matter where you go around the world, you will find a product that has been developed in Australia. That is the great thing about Australia when you consider that we are a relatively small nation.

However, when we have a look at the history of the Howard government, the research and development sector of our industrial base has been markedly in decline. Right from the election of 1996, money expended on research and development has declined. The attitude of ministers opposite has been that at some time in the future you would be able to simply turn on the tap and it would be there. That is not the case. When a research facility closes down, where do the researchers go? Do they sit there and wait? The answer is, of course, that they do not. They will go where there is a job, and if it is not in Australia, because of the global economy and because of global industrialisation, you will find them working in other parts of the world where they are valued and where they do get recompensed for their efforts. They certainly were not valued by this government over the past five years.

I have listened to members opposite. They do not comprehend what industry is all about. I listened to the Minister for Trade yesterday and, in typical fashion and full of bravado, he got up and he very proudly accepted the full responsibility for Australia's car exports, particularly to the Middle East. Again, that encapsulates the attitudes of this government. To this minister, a car industry is something that you can simply turn on or turn off. It is not something that has been developed over the past two decades, and we remember all the hurt of the Hawke government when John Button redeveloped the car industry. Some older Australians would remember when cars, thank goodness, were first imported into Australia, because they were sick of driving their Holdens and their Falcons with the bench seat and the lino floor. They wanted the comfort of a small car with bucket seats, a push-button radio and carpet. Australian manufacturers would not give that to them but, because of the money that was spent in nurturing the car industry, we now produce cars of world standard.

I do not care where you go around the world, when you come back home and sit in your locally made product, be it from General Motors, Ford, Mitsubishi or Toyota—but made here—you appreciate that it is a world-quality vehicle. It was not developed this year; it was not developed last year; it was not developed in the last five years; it was developed over a long period of time. What the Minister for Trade did not tell us when he puffed out his chest yesterday was that, last week when the Prime Minister went to Japan to talk to Mitsubishi, Mitsubishi had pulled back from their half a billion dollar proposal for a new model to invest in Australia and, instead, gave him very much a second prize—and a very distant second prize—of $70 million, purely to reskin an old model. That epitomises the sort of thing you get when you have a government that is not prepared to invest in innovation and that is not prepared to allow companies like Mitsubishi to invest in research and development, which they need to do. If we want to keep exporting our cars to the Middle East, we must keep that level of investment going.

Let us compare ourselves with some of the industrial minnows of the world. The Treasurer likes to stand up and tell us how well Australia is going and how we are leading the world in capital growth. I read an article by Peter Ruehl in the Financial Review the other day. He was talking about Ireland, a small country of about 3½ million people. They have a GDP of 10.5 per cent per capita, compared with Australia's 3.5 per cent per capita. They have had an annual growth over the last seven years of over nine per cent. Why? Because Ireland have really taken research and development by the throat. They realised that, if they were going to break the shackles of their ties with the past, they had to be innovative and they had to invest. They did that, and they have been a world success story.

Mr Fitzgibbon —It could be because it's a republic.

Mr HORNE —Yes, maybe it is the republican element in it that has created it. Or we could talk about Finland and Nokia. What an innovative company that is. You have only to look at small countries like that to realise that the brave are rewarded, but not Australia. Over the last five years all we can get is a government that is prepared to poke fun at `noodle nation', a government that has slashed research and development funding. I listened to the minister for primary industry stand up and talk about our exports of primary industry. I take great pride in that too because, as a representative of a rural and regional seat, I know that there are beef producers, for example, whom I represent and who, for the first time in many years, are getting a return on their investment. I sold some cows and calves the other day and was very pleased. Let me say at the same time that, while it is very positive for one sector of our community, it also has a downside. The downside is that, because of our lower Australian dollar, we are expending far more than we should be on our high-tech imports. These are the sorts of industries that we should be developing ourselves, and we would be if we had a fair dinkum regime of R&D. But, we do not have it, and so we are paying more.

Madam Deputy Speaker Kelly, I know that there is an industry that is very dear to your heart in your other role as the member for Dawson—that is, fuel replacement. We know that in Australia over recent years there have been many complaints about the high price of fuel. Why? Because we either import it or pay world parity price for our local product, so we are captive of the world market. What an ideal environment has existed in this country to develop alternative fuels. Of course, I am talking about ethanol. For the last more than five years, the production of ethanol in Australia has, essentially, been put on hold, despite the fact that we have a world expert in Dr Russell Reeves, who happens to be a resident in the electorate of Paterson. His technology is being used all over the world, but not in Australia.

That is the tragedy of what is happening in Australia under this government. Yet, on the eve of an election, the government trot out a policy and think that it will immediately encourage research and development and the benefits from it. They forget the lead-in time that will be needed. They forget the years it will take for industry to pick up on any new concepts or ideas that may be turned into new products. It will not happen overnight, and that is where this government have condemned Australia to a downturn in innovation and in research and development. They have condemned Australia to be a nation that, as the former speaker said, is losing its ranking compared with other OECD nations. That is the tragedy of what this debate is all about. If the government think that Australian industry is going to give them a pat on the back for restoring something that they should never have got rid of almost six years ago, then they are wrong. History will show that what they did in 1996 was against the interests of Australian industry, against the interests of Australian people, and it will have a marked effect for decades to come.