Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 5 April 1984
Page: 1262

Senator CHILDS(1.45) —The first reading debate on Appropriation Bill (No. 3) 1983-84 provides the opportunity for some consideration to be given to one of the major problems that confront Australia today and that is the plight of the Australian manufacturing industry. All honourable senators will be aware of the massive decline of the manufacturing sector over the last 20 years. Honourable senators with an interest in manufacturing will also know that the lack of considered community discussion on this subject is a matter of concern. Unfortunately, a change in methods used by the Australian Bureau of Statistics means that figures before and after 1968 are not comparable and because of this detailed analysis largely has to be limited to the last 15 or 16 years. Unfortunately, they are not a very happy 15 or 16 years.

The statistics group of the Legislative Research Service of the Parliamentary Library has at my request compiled a table which demonstrates how the manufacturing sector fared in the period 1968-69 to 1981-82. I will seek leave to have that tabled incorporated in Hansard subsequently. One of the things that is revealed in the table is a decline in employment in the manufacturing sector. In 1968-69 the manufacturing sector employed an average of 1,264,037 Australians . This meant that more than one in every four working Australians were employed in manufacturing. In 1981-82 the manufacturing sector employed an average of 1, 154,659 Australians, approximately 110,000 jobs fewer than in 1968-69. Thus, in 1981-82 one in five Australians were employed in the manufacturing industry.

Those who are more concerned about money than people should also take note of the share of gross domestic product contributed by manufacturing. It dropped from 27.2 per cent in 1968 to 20.2 per cent in 1981-82. As bad as all these figures sound they do not include the massive shake out that took place in the second half of the calendar year 1982. The magazine Australian Business reported that in the 12 months to October 1983, last year, 93,000 jobs were lost in the manufacturing sector. That means that employment in manufacturing contracted to around 16.5 per cent of the work force by October last year. Approximately one in every six Australian workers therefore is employed in manufacturing.

Of some importance is the fact that Australian Business also reported last October that the idle capacity in manufacturing was at an all time record level. Fortunately, the situation is changing but it has to be of great concern. It is quite obvious that to a very large degree this crisis in manufacturing was directly associated with the large jump in unemployment in Australia in the second half of 1982. Of course, these matters spell bad news for all Australians . An economy with high levels of idle productive capacity and unemployment is an unhealthy economy. The Hawke Government has taken a whole series of decisions in attempting to turn round the situation that we inherited a little over a year ago. I remind honourable senators and you, Mr President, that the dole is, at $ 73.50, well below the poverty line. On that kind of income the struggle for basic acommodation, food and clothing is demoralising and debilitating. The most prudent individuals in that situation face such a rapid decline in their savings that they will take a great time to recover even when they gain employment. Clearly, the two problems, the manufacturing crisis and unemployment, create a mutually reinforcing dilemma.

The consumption of goods and services and the health of the manufacturing sector depend largely on the level of disposable income in the hands of ordinary Australians. When a significant proportion of Australians are unemployed and their disposable income is drastically reduced, consumption, or demand as the economists would refer to it, must be adversely affected. However, in the last few months there has been an upturn in the economy that the Hawke Government can claim so much credit for. The Bureau of Statistics reported on 27 February that there had been an increase in production across almost all the manufacturing sector in the last three months. This follows the pick-up in retail sales in the final quarter of last year.

Whilst this undoubtedly reflects in part the breaking of the drought and perhaps to a lesser extent the important developments in the United States economy, the simple position is that two policies of the Labor Government have laid the basis for the increase in demand. The first is the implicit development of the 1983 Budget and, of course, the fillip to the economy that that Budget caused and the second is the rejection of the Fraser wage freeze and the reintroduction of wage indexation. Yesterday's decision means that there will be more money in the pockets of wage and salary earners. Disposable income will increase and this will assist the mass consumption and production that society depends on.

I believe that full indexation ensures the maintenance of demand for goods and services. Without indexation, of course, and if we were to accept the piecemeal policy that the Opposition seems to be wedded to, we would lose the stimulus to the economy that yesterday's decision will finally mean. Despite the recent improvement, however, unemployment remains at an unacceptable high of 9.4 per cent. Getting back to the manufacturing industry I think that to put it in perspective, we have to compare the sectors of the economy, and look at the agricultural and mining sections. In those sections 7.5 per cent of the work force is unemployed. Any increase in mining or agriculture will certainly not significantly reduce unemployment. Of course, I have always taken the view that Australia cannot afford to be a mine or quarry and that if we follow that path we will become a Third World country. That is the reason why I put so much emphasis on the revitalisation of the manufacturing sector. It is the productive engine of the economy and as a nation we must be determined to revitalise the manufacturing sector in order to revitalise the Australian economy. This Government is doing that but I express concern with the general decline in the manufacturing industry over the 16 years to which I have referred.

I refer to an industry that I have had some experience with, the printing and paper industry and kindred trades. The printing industry is a significant industry. It is the same size as the fabricated metal segment of the metal industry. The statistics group of the Legislative Research Service of the Parliamentary Library has compiled at my request, a table which shows how the printing, paper and allied industries fared between 1968-69 and 1981-82. I will seek leave to incorporate that table in Hansard at the conclusion of my speech. The table shows that there has been a loss of some 5,000 jobs in the paper industry in the period to which I have referred. In contrast, employment increased by some 6,000 in the printing sector, giving a relative balance to the whole industry. Again, however, the Bureau of Statistics' figures on which this table is based do not include the period from July 1982. The Department of Employment and Industrial Relations has estimated that employment in the printing, paper and allied industries has decreased by some 10,000 since November 1980. Clearly this parallels the decline in employment in the manufacturing industry generally. The figure of 10,000 represents a decline of 8 .7 per cent in employment in printing.

Two factors have a major impact on the printing industry. They are typical of the problem in manufacturing industry generally. The first of these is the trend towards taking printing off-shore. I give this particular emphasis because it is a great threat to the printing industry. In 1980-81, $286m worth of printing products were imported into Australia. This amount rose by 11 per cent in 1981- 82 to $318m. In the last financial year, 1982-83, imports of printed products into Australia rose by 13 per cent to $360m.

Much of this off-shore printing is being done in countries such as Singapore and Hong Kong, both of which receive preferential treatment in relation to tariffs because they are classified as developing countries. Yet multinational corporations have injected large amounts of capital into printing operations in these countries to ensure that they are equipped with the most up-to-date machinery. This means that Australian printing workers are competing against workers in Singapore and Hong Kong. Those non-unionised workers are paid between 20 per cent and 25 per cent of the wages of their counterparts. It is no wonder that they can sometimes print more cheaply.

In response to these developments, the printing employees and the Printing and Kindred Industries Union have combined to support a campaign to keep printing in Australia. I speak partly today in support of this campaign. The printing employers organisations and the Printing and Kindred Industries Union realise that they have to take this step for the health of their own industry. They believe that if the $360m in off-shore printing were done in Australia it would produce 12,500 jobs for Australians. Part of the recovery we so much need would be achieved by this.

I referred to the factors which have a major impact on printing in Australia. I have indicated that the first is off-shore printing. In the very short time I have left I will refer to technological change. It is another factor that has affected the printing industry in leaps and bounds as it has affected other parts of manufacturing. I do not have time to develop the argument about technological change because I want to refer to some research that was compiled by the Bureau of Industry Economics. It indicates that the labour co-efficient will drop by half in the printing industry between 1979 and 1990. I have indicated the rate of change in the printing industry which is reflective of the rate of decline in employment in manufacturing industry generally. It is of great concern that, if the estimate is correct, employment in the printing industry will decline by 50 per cent, and only half the number of people will be required to produce the same output. Alternatively, if employment is to be preserved in the printing industry, it will be necessary to increase its production by 100 per cent.

The DEPUTY PRESIDENT —Order! The honourable member's time has expired. Senator Childs, do you wish to incorporate some material in Hansard?

Senator CHILDS —I seek leave to incorporate the tables to which I have referred.

Leave granted.

The tables read as follows-

Table 1


1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75(c)

(1) Employment (a) (number) 1,264,037 1,296,640 (b) 1,301,639 1,297,095 1,338, 379 1,245,237 (2) Value added ($m) 7,475.5 8,261.7 (b) 9,696.6 10,725.9 13,149. 1 15,231.6 (3) Total Employment (August) . . 5,183,000 5,395,600 5,515,000 5, 609,900 5,783,000 5,855,200 (4) Manufacturing as a % of Total Employment 25.1 24.5 23.7 23.9 23.5 21.6 21.7 (5) Manufacturing % share of G.D.P. 27.2 26.7 26. 5 25.6 24.8 24.4 23.1

1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83

(1) Employment (a) (number) 1,200,440 1,175,831 1,144,549 1,143,891 1,154,170 1 ,149,838 1,154,659 . . (2) Value added ($m) 16,921.0 19,234.3 20,236.3 22,230.1 25,596.2 28,531.1 31,377.7 . . (3) Total Employment (August) 5,841,300 5,897,800 5,995,400 5,969,600 6,041,500 6,246,700 6,356,300 6,347,600 (4) Manufacturing as a % of Total Employment 21.3 19.9 20.2 19.7 19.4 18.8 18.2 . . (5) Manufacturing % share of G.D.P. 23.0 22.4 22.0 21.0 20.7 20.6 209.2 . .

(a) Average over the whole year.

(b) There was no Manufacturing Census held in 1970-71.

(c) From 1974-75 employment and value added figures exclude establishments employing less than 4 persons.

Compiled at the request by the Statistics Group of the Legislative Research Service from information contained in Manufacturing Establishments and, Gross Product by Industry, published by the Australian Bureau of Statistics.

Appropriation Bill (No. 3) 5 April 1984 SENATE 1265

1266 SENATE 5 April 1984 Appropriation Bill (No. 3)

Table 2


1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75(c)

Printing and Allied Industries-

(1) Employment (a) (number) 72,007 75,607 (b) 75,436 75,117 76,594 73,168 (2) Value added ($m) 416.1 467.9 (b) 541.1 614.1 739.0 863.9 Paper and Paper Products-

(3) Employment (a) (number) 29,558 29,375 (b) 30,892 30,378 31,440 29,902 (4) Value added ($m) 204.6 233.9 (b) 277.0 301.3 371.5 415.5 Total Printing and Paper Industries-

(5) Employment (a) (number) 101,565 104,982 (b) 106,328 105,495 108,034 103, 070 (6) Value added ($m) 620.7 701.8 (b) 818.1 915.4 1,110.5 1,279.4

1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82

Printing and Allied Industries-

(1) Employment (a) (number) 70,567 69,767 70,176 71,987 75,564 77,195 78,271 ( 2) Value added ($m) 943.0 1,097.8 1,227.0 1,350.7 1,595.5 1,841.9 2,125.0 Paper and Paper Products-

(3) Employment (a) (number) 27,322 27,618 26,968 26,055 26,008 25,215 24,642 ( 4) Value added ($m) 448.5 516.5 535.9 610.1 653.1 726.2 859.2 Total Printing and Paper Industries-

(5) Employment (a) (number) 97,989 97,385 97,144 98,042 101,572 102,410 102, 913 (6) Value added ($m) 1,391.5 1,614.3 1,762.9 1,960.8 2,248.6 2,568.1 2,984 .2

(a) Average over the whole year.

(b) There was no Manufacturing Census held in 1970-71.

(c) From 1974-75 employment and value added figures excluded establishments employment less than 4 persons.

Compiled at the request by the statistics group of the legislative research service from information contained in manufacturing establishments and Gross product by industry, published by the Australian Bureau of Statistics.