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Wednesday, 9 October 1985
Page: 889

Senator SIDDONS(12.20) —I was commenting on the two Bills that we are debating-the Bounty (Metal Working Machines and Robots) Bill 1985 and the Bounty (Agricultural Tractors and Equipment) Bill 1985-and in relation to the second Bill particularly I noted that the Opposition proposes to move an amendment reducing the bounty from 40 per cent to 25 per cent. I pointed out that this was particularly sad because Senator Chaney had slavishly adopted a recommendation by the Industries Assistance Commission and was attempting to get the Senate to agree to that recommendation as well. I made the point that the IAC had a long history of putting maximum pressure on industry and that the whole approach of the Commission was unsatisfactory in that it was based on confrontation with industry and not on a co-operative approach. I was pleading the case for the Government-and we will hear from the Minister for Industry, Technology and Commerce, Senator Button, later-to take the opportunity to establish an environment or co-operation between industry and government, which is second to none. I was using the Japanese example as one that the Australian Democrats would recommend to the Government as being worthy of careful consideration. This is the sort of approach which the Japanese have applied through their Ministry of International Trade and Industry which gathers market information from around the world, brings it back to Japan and then asks industry to discuss with the government instrumentality the potential market for Japan in the various categories.

Once there is agreement on the projections of the market potential by categories with the industry leaders concerned, MITI assesses the capacity of Japanese industry to meet that projection five or 10 years hence. If the capacity of industry in Japan is too high the MITI organisation says to industrial leaders: `Go away, rationalise your industry and reduce your output'. If the capacity in Japan is not capable of meeting the projection, MITI says: `Right, we must expand that industry'. That is exactly what it did some years ago with the automotive industry. There is a clear understanding of government attitudes.

Senator Chaney —I believe that MITI has tried to squeeze out Mazda.

Senator SIDDONS —The fact is that the Japanese now produce more motor cars than the mighty United States auto industry and that has been achieved in a comparatively short time. Therefore, the Japanese must be doing something right. I believe their co-operative approach between industry and government is one of the factors. I would be very interested to hear any comments that Senator Button cares to make on this basic approach. I believe that there would be a lot of support in industry for getting away from confrontation and being able to understand and discuss clearly with the Government its long term projections and hopes for industry by product. This requires a lot of work and a basic new approach. I believe that the Department of Trade would have to do what the MITI organisation does in Japan-gather in the information on market potential around the world by product. The Department of Trade could be expanded to do that, and that information could then be collated and discussed on a continuing basis with industry leaders in this country. That would mean having a co-operative approach as opposed to the confrontationist approach of the IAC which says to industry repeatedly: `You are in the dock, you tell us why you should exist as a manufacturer in this country'.

Senator Chaney pointed to the need for a bipartisan or tripartisan approach to the development of industry in this country, and I could not agree more. Industry is too fragile to be at the beck and whim of party politics, to be a political plaything. If we are to develop industries that, as we all hope, will be internationally competitive, industries that can look on the world as their potential market, we have to do some pretty basic thinking. The Government has to be in a position to pick winners. It has to be able to say, in consultation with industry: `This is the area, this is the thrust we are prepared to encourage'. Industry would know what was expected of it. The Government would know what industry was going to try to do and the funds with which to do it would be readily available.

The organisation of our industries has to be improved. Some weeks ago I introduced into the Senate an employee participation Bill. In my second reading speech I made the point that the secret of the Japanese success, apart from government co-operation, is the fact that Japanese industries have developed organisational structures which respect the individual as a thinking person. Japanese industry does not adopt the attitude that so many Australian industrialists adopt; that is, that the workers are there to do what they are told. Japanese industry looks on the workers to make a positive contribution to improve the efficiency of the industry in which they work. Unless we can get that co-operative attitude between management and workers in industry we will never be really efficient. In the employee participation Bill I set out four criteria that would establish an environment in which the ideas and suggestions of workers could be gathered in co-operation with the management. The most important criterion is what is called small group activity. For instance, the small groups in the Toyota organisation in Japan last year processed no fewer than 1.9 million suggestions from workers. Of those, 90 per cent were acted on by management. We could have the greatest industrialists of all time, someone such as Henry Ford I, but no one man could come up with 1.9 million suggestions to improve the efficiency of an organisation. But if the whole organisation thinks that way and if there is a process which allows the suggestions of people in it to be assessed, to be put into a concrete form which management can either act on or not, we will get efficiency.

Just how dramatically successful has Japanese industry been? Starting in 1945 from a heap of rubble with a reputation for producing shoddy imitations, by 1980 Japan was producing more motor cars than the United States of America, 56 per cent of the steel used in US industry and 90 per cent of the motorbikes in the world, and it was world leader in the manufacture of machine tools, computer design and so forth. That all happened in 40 years. A very careful assessment of how the Japanese have done it comes back again and again to the fact that they use the expertise and abilities of the entire work force. The Japanese workers do not go to work and say: `What shall I do? Tell me what to do'. They discuss what they are doing in small groups and they look at ways of improving the efficiency of the industry in which they work.

If Australian industry is to be internationally competitive it has to have a very close and careful look at how the Japanese have done it. Until we do that we cannot hope to beat them. We have to assess our competition, find out what is good about it and try to improve on it. The two fundamental ways of doing that-I take the opportunity in this debate to stress this-are, firstly, to have a co-operative attitude between governments and industry and, secondly, to have a co-operative attitude between management and the work force. That is all there is to it-two very simple concepts that have been shown in Japan to have dramatic results.

Chamberlain John Deere Pty Ltd is essentially the only manufacturer of large tractors in Australia. The company has a long history. It has been going since 1932 and it has been able to remain viable in spite of intense import competition from the rest of the world. We import tractors from manufacturers in Russia or any other country in the world-name it-in competition with Chamberlain John Deere in Western Australia. The fact that it has been able to compete against the world, with all the problems and all the on-costs that are associated with Australian industry today, is a great achievement. The Opposition says: `Why should we subsidise Chamberlains? It has had a bounty for some considerable time and it is about time it either stood on its own feet or disappeared'. I make a plea for time. I commend the Government for upping the ante, as recommended by the Industries Assistance Commission. It has told Chamberlain John Deere quite clearly that it wants the company to continue. I think that is the right decision. We have the basis of a very important industry here. Surely it is important that we have the capability to manufacture our own heavy tractors. So let us keep going the industries that have survived over a long time, that do have potential. Let us help them in the short term with a bounty and in the long term let us see whether we can do something better. Let us see whether we can get these industries to be as efficient as the Japanese industries.

I once visited the Komatsu factory in Japan, which makes crawler tractors. For a while that company was a licensee of Caterpillar. It had a massive manufacturing enterprise and produced crawler tractors and bulldozers at the rate of one a minute. It had acres and acres of paddock where tractors stood after rolling off the assembly line. I asked how on earth it could sell that output and where the tractors were going. They were going to China and all around the world and a lot were being used in Japan. That massive industry, based on the technology of Caterpillar, had been developed in a very short time. Why was Komatsu prepared to invest the massive funds that were necessary to develop its enterprise? It was prepared to do so because it knew that it was developing a plan which had the absolute backing of the Japanese Government, the stamp of approval of MITI, and away it went. As we now know, it makes crawler tractors and bulldozers as efficienly and cheaply, if not more so than Caterpillar itself.

I think it is important to take time out to look at where we are heading as an industrial nation. What do we intend to do about our industries? How can they become internationally competitive? We will not achieve that by slavishly following the recomendations of the IAC, which simply puts the maximum pressure it possibly can on industry and which looks on industry as something to attack on whoever's behalf.

The Australian Democrats will support both of these Bills. We commend the Government for its action in relation to the bounty both on metal working machinery and robots and on agricultural tractors and equipment. As we see it, it is a short term approach. We hope that the Government will comment and give us some insight into its longer term plans for industry so that it can become internationally competitive and so that the best of our industries can look on the world as their market.

I close by reiterating the two fundamental principles that must be embraced. The first is co-operation between government and industry. The Government has to bring industry into its confidence and tell industry what it wants. The Government has to be prepared to pick winners. It is as simple as that. We heard from Senator Puplick last night about picking winners. I was not clear as to whether he was for it or agin it. But the fact is that there is no other way. We cannot spread government assistance broadly. The Government must use rifle shot accuracy to decide where to encourage development. When it has decided precisely where to encourage development, it has to do so in co-operation with industry.

The second fundamental principle is co-operation between management and workers-participative management. I implore the Government to look carefully at the Bill that is now in its second reading stage which embraces the principles that have been so brilliantly adopted in Japanese industry and which could readily be adopted in Australian industry if we were prepared to drop our entrenched ideas-ideas that workers are there to do what they are told and the attitude of workers that they are not going to help the boss make money. We must drop these entrenched attitudes and accept the fact that workers and management, and investors for that matter, are all in the same canoe, and recognise that unless the efficiency of the enterprise can be expanded and increased, there will be no cake to divide up between the component parts of that enterprise.