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Friday, 16 June 1989
Page: 4251

Senator SCHACHT —My question is directed to the Minister for Industry, Technology and Commerce. It was announced yesterday that Sarich Technologies had signed a licensing agreement with General Motors to manufacture, use and sell Sarich engine technology worldwide. Has the Government been involved in any discussions with Sarich Technologies to ensure that the maximum manufacturing and production of Sarich Technologies' products can be achieved in Australia and hence improve Australia's terms of trade?

Senator BUTTON —I have seen the press reports of the announcement made by Sarich Technologies. One of the difficulties about interpreting the press reports is that the nature of the agreement, its size and such things are described as being commercially in confidence and are not included in the newspaper reports. I can say, however, that for a long time the Government has had discussions with Mr Sarich. At an earlier stage the Automotive Industry Authority indicated that it was prepared to support further development of the Sarich engine in Australia by a grant under the Automotive Industry Authority Act. But a condition of such a grant, of course, which was made clear to Mr Sarich, was that manufacturing should follow the further development of the engine in Australia. In fact, that is a condition in the Automotive Industry Authority legislation. It is fair to say, on that basis, that the offer was not acceptable to Mr Sarich. While further development work will take place in Australia supported by some of the international companies, I think it is fair to say that it is unlikely that the lead manufacturing plant will be in Australia.

Both the Federal and State governments have sought to secure manufacture of the engine in Australia. I believe that Mr Sarich has sought to do that himself, but I am not sure that that is, by any stretch of the imagination, a possibility at this stage. Work commissioned on behalf of the Government in conjunction with Sarich Technologies into the feasibility of a manufacturing plant in Australia showed that the engine could be manufactured profitably in Australia but that it would be manufactured more profitably in, perhaps, the United States.