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Tuesday, 8 October 1985
Page: 847

Senator SIDDONS(10.17) —I am indebted to Senator Button's interjection in Senator Puplick's comments because until the last two or three minutes I was not sure, when Senator Puplick referred to picking winners, whether he was in favour of that or whether he was against it. In the last few minutes he seemed to make it clear that he was against picking winners-that is, against some sort of co- operative approach by governments to decide which industries needed assistance and which industries could do without.

This whole debate raises very basic issues. One could speak at great length on the whole question of what should be government's attitude to industry. I am saddened to some degree to have heard the remarks of the Leader of the Opposition (Senator Chaney) who seems to have adopted, on behalf of his Party, slavish support of the Industries Assistance Commission's recommendations. The facts of the matter are that the IAC has a very long history of applying maximum pressure to industry. One would have thought, in view of our unemployment and in view of all sorts of reasons why it is necessary right now to save our hard-earned foreign currency and to develop international competitiveness in our industries, that the Opposition would have had something more constructive to say about this very important area.

In fact, the Opposition did have one constructive thing to say, and I want to take it up. Before I do so I should make it clear that the Australian Democrats will be supporting the Government on both these pieces of legislation, the Bounty (Metal Working Machines and Robots) Bill 1985 and the Bounty (Agricultural Tractors and Equipment) Bill 1985. It has at least been brave enough to up the ante, so to speak, on what the IAC recommended-and that we applaud. The constructive thing that the Opposition had to say was that there should be a bipartisan-I would suggest a tripartisan-approach to industry. I understand that this is one of the most divisive subjects as far as the Government is concerned and certainly as far as the Opposition is concerned. As soon as the question of how we should help our struggling Australian industries is raised in either party room, whether it be the Labor Party or the Liberal Party, the caucuses immediately divide in two. This is essentially a non-party political issue. The issues are: Are we to create employment? Are we to earn export dollars? Are we to be an industrial force in this part of the world or are we to be an industrial backwater? We can become an industrial force and our industries can become internationally competitive, as is the catch cry at the moment, only if we do two things. We have to have government co-operation on a non-party political basis and we have to have worker participation.

I shall talk first about government co-operation. The whole history of the relationship between government and industry in this country is one of confrontation. Industry has survived, very largely, in spite of governments. I speak essentially of the attitude of the IAC. I remember, back in 1969, when I first appeared before the IAC as an industrialist. I was chairman of a company that produced hand tools in this country. The Commission asked: `Mr Siddons, what right do you have to produce hand tools in Australia?' The scene was set immediately. If one received some tariff protection one was asked to justify whether it was right or not. It was not a case of the Government trying to find out what one's problems were and whether it could co-operate. No, one had to justify one's right to manufacture in Australia. That has been the attitude of the IAC throught its whole history. It has been one of confrontation. It has put industry in the dock and asked it to justify its right to exist.

I ask honourable senators to contrast the IAC's attitude with that of the Japanese. How do they go about getting co-operation between the Government and industry? They do it through a government instrumentality, the Japanese Ministry of International Trade and Industry. It has the responsibility to go around the world and collect the necessary data on potential markets in every country. That organisation has representatives on the ground. They collect information on markets in particular countries and on the potential market in five or 10 years hence. Data is collected all around the world by on the spot representatives of the Japanese Government.

This is the essential process. That information is then collated in the Government's computers and the Government estimates the potential of a market and the growth of that market with regard to a particular industry. The Government then gets that industry's leaders to come together at a round table meeting. It tables the basic data and the projections for the industry in question. It asks the industry leaders: `What do you think of those projections? Are they right or are they wrong'? The matter is discussed. They finally come to an argreement as to the potential growth of that industry and what could be the Japanese industry's hope of gaining a certain percentage of that potential market. Once the Government and the industry reach agreement on the potential for Japanese industry in that segment of that market, the Government turns to the industry leaders and say: `Obviously, the capacity of your industry is in excess of what we have just agreed to be the potential'. That is agreed. The Government tells the industry leaders there to go away and rationalise the industry and to reduce their output because there is no way that the industry can be sustained.

On the other hand, the Government and industry may agree, say, in the case of motor car manufacture, shipbuilding or steel production, that growth is good, that the Japanese potential for gathering a large percentage of that industry is such and such that it would therefore be necessary to double the size of the industry in question. So government and industry have agreed on where they will head. They have jointly picked winners. They have decided that there will be growth and the Government has said to the industry that it will encourage growth. The industry gets the blessing of MITI and that in turn is sufficient for the industry leaders to go to the financial institutions to get whatever finance is necessary, in much the same way as General Motors-Holden's Pty Ltd got started in this country back in 1948. It had the blessing of the Government. It went to the bank and the bank said: `Right, how much money do you need?'. That is exactly the way that Japanese industry operates today.

I cannot see any reason why this sort of approach could not apply in Australia. We have to break down the barriers. We have to gain the confidence of industry in what the Government says. Essentially, we have to be prepared to accept the fact that any plan agreed to between industry and government is not a cast iron plan. Consultation between industry and government is an ongoing process which has to occur every six months or so. We cannot have a plan that is set for all time. Mr President, I seek leave to continue my remarks later.

Leave granted; debate adjourned.