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Thursday, 5 December 1985
Page: 3030


Senator WATSON(3.13) —I move:

That the Senate take note of the paper.

The Department of Industry, Technology and Commerce has an important role in advising and implementing government policy in relation to Australian manufacturing and service industries and technology and it is a focal point of interaction between business, unions and Federal and State governments. I draw the Senate's attention to a significant paragraph of the report, and that is the one which states that the Australian economy has grown up around a framework of government intervention in industries and the key question for government is how to modify the framework of intervention so as to improve the ability of the economy to achieve the required structural change. The plight of manufacturing industry must continue to exercise some concern for both the Minister for Industry, Technology and Commerce (Senator Button) and his Department. Over the past 15 years we have seen the loss of 150,000 jobs. Of those 150,000 jobs, 140,000 were actually lost during the Whitlam years.

Our inability to compete internationally and the failure of our industries to exploit modern technology and opportunities for growth, particularly in the Pacific region, have caused us problems. Those problems have been manifested very much in the form of a relative decline in our standard of living. For example, 40 years ago Australia ranked fourth amongst the most prosperous nations in the world, whereas today Australia is ranked seventeenth. I think that we were all very much relieved in Australia when the current Australian Labor Party Government showed that it had a much more responsible attitude to the preservation of the manufacturing sector in Australia. I think it is true that the manufacturing sector must be rejuvenated. It needs government co-operation to recover from the slump. At the same time, government needs to ensure that its relative policies in manufacturing interact properly with its tax policies so that good work done in, say, the manufacturing area is not dissipated by ideological beliefs imposed through taxation measures which react against manufacturing industry.

However, I believe that on all sides there is now a very much wider recognition of the need to preserve our manufacturing industries in Australia. I think that we have passed the time when many of our academics suggested that we should abandon our current manufacturing industries in favour of high technology industries. I think that this has been dispelled by the realisation that the costs, both economic and social, in terms of dislocation could never be recouped. Last year Australian industry was so uncompetitive internationally that our firms supplied only $1m of the $200m worth of products which were ordered world-wide by the United Nations Children's Fund. Many of our manufacturers are reluctant to tender in the international field.

I think the question that needs to be asked is: Why do Australian manufacturers and service industries not take more advantage of the opportunities around us? Firstly, we have to recognise that many of these industries, particularly in South East Asia in future will suffer tax consequences as a result of the new tax reform measures. Also, many of those industries face tremendous competition from other international suppliers who receive tremendous levels of assistance and subsidies from their own respective governments. There is also the problem of our own industrial disputations and stoppages. It is felt that Australia is not always a reliable supplier as far as the rest of the world is concerned.

Many of our industries are faced with high labour and transport costs which undermine our international competitiveness. There is also labour market rigidity, which is a barrier to the development of more efficient and export-related industries. Many of the wage fixing practices are an incredible obstacle to effective overseas competition and also the domestic rationalisation of our industries. Thus it is almost impossible to institute any form of structural change in response to international demand. I commend the report to the Senate.

Question resolved in the affirmative.