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Wednesday, 16 December 1992
Page: 5165


Senator DEVEREUX —Has the Minister for Industry, Technology and Commerce seen a report called The challenge of leadership: Australia's emerging high value-added manufacturing exporters published yesterday by the Australian Manufacturing Council? This report results from a study of 700 companies. Can the Minister inform the Senate of details of this report and the importance of the companies surveyed to future economic growth?


Senator BUTTON —The point of Senator Devereux's question is important following on Senator Short's question. The McKinsey report, commissioned by the Australian Manufacturing Council, was a survey of 700 new exporting companies in Australia. It underlines the importance of small to medium size manufacturing exports. These exports are increasingly important. Increasingly, the wealthy countries of the world are the ones that produce sophisticated manufactured goods. Unless we in Australia produce more of these goods and sell them internationally, we will not be able to pay our way in this world.

  The Opposition, of course, will not like this report because it threatens to puncture its present euphoria about Australia's current economic difficulties. The report shows that many small and medium sized companies are recording significant successes in international markets. The survey identified 700 of these manufacturers which have rapidly increased exports over the past five years. These companies now earn Australia about $8 billion a year. McKinsey predicts that this export income will grow to $15 billion over the next five years.

  The 700 companies concerned are companies which have a new export culture. I have visited and talked to many of them. They are high value-added manufacturers, innovative young companies, run by a new generation of business people. Many of these companies once concentrated on the domestic market only but, in recent years, they have got into exports. There are plenty of examples of those. The Opposition, which gets all its policies from a paid think-tank, would probably not be aware of the existence of many of these companies. The fact of the matter is that they are there and I have visited many of them. They are very important in the changing and diverse pattern of Australian trade, particularly in the Asia-Pacific region.

  I commend the survey for serious study. If members of the Opposition can get a look at it before Friday, it would be very good for them; it would be very helpful. It would save them visiting any of these places. They might understand some of the problems which are realistic problems as distinct from theoretical ones identified by paid policy providers of the Opposition.


The PRESIDENT —Order! The Minister's time has expired.


Senator DEVEREUX —Mr President, I ask a supplementary question. Did the report provide any information on the importance of Asian markets to the 700 countries surveyed? As the economic recovery gathers pace, is there a danger that these companies will refocus on the domestic market at the expense of exports?


Senator BUTTON —It is the historic experience under conservative governments in this country that new exporting companies tend to fall back into supplying the domestic market in a period of growth. That was not the experience from 1985 to 1990 in a period of high economic growth in Australia. Manufacturing exports grew by approximately 15 per cent a year throughout that period—a period when one would normally have expected them to fall backwards.

  Most of the companies surveyed, as the senator points out by implication in his question, are committed very strongly to Asian markets. There are a variety of reasons for that, including niche opportunities and the same time zone. These companies now see exports as critical to their success and survival. Unfortunately, the same cannot be said for every other company in Australia.