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Tuesday, 9 May 1989
Page: 2042

Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to the 19 per cent decline in automotive exports in 1988 as reported in the recent report of the Automotive Industry Authority on the state of the industry and also to the slowdown evident in growth of exports of manufactured goods generally since the June quarter last year. I also refer the Minister to the results of the Confederation of Australian Industry-Westpac survey of industrial trends for the March quarter of 1989 which reported a fall in export deliveries to their lowest level in three years. Is he concerned about this apparent stagnation in exports of manufactured goods and to what does he attribute the slowdown?

Senator BUTTON —If I recall the figures, the increase in manufacturing exports reached its height in 1987 and there was some decline in 1988 which is reflected in the figures to which Senator Chaney refers. There are a variety of reasons for that decline in performance in the increase in the rate of exports-which is what the decline is. It is a decline, as I recall it, from about a 30 per cent increase in the rate of exports in 1986-87 to some 8 per cent last year. For some industries the value of the dollar during 1988 affected their export performance. For other industries, particularly small firms, we have found as a matter of experience that they seem to have a capacity to increase their exports to the $3m to $5m level. This fact has turned up in the review of the export market development grants scheme being conducted by Professor Hughes. When they reach that level they run out of capacity to increase their exports further. That is why current investment levels are very much welcomed by this Government.

The question is more specifically directed towards the motor vehicle industry. In the second half of 1988, there was an unanticipated surge in domestic demand which led the industry to being quite unable to satisfy the domestic market and a considerable amount of resources was diverted into satisfying domestic demand rather than into export activity. I consider that not to be a long term decline and one which will be rectified within the next six months or so.