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Wednesday, 29 September 1993
Page: 1359


Senator MARGETTS (10.36 a.m.) —Even though I know that most honourable senators will have listened attentively to the first three minutes of my speech on Monday night—


Senator Faulkner —I did.


Senator MARGETTS —I thank the minister. Just to put my own thoughts in perspective, I will reiterate some of my opening remarks with regard to the Development Allowance Authority Amendment Bill 1993. The stated purpose of the original Development Allowance Authority Bill 1992 was unclear other than to encourage expenditure on the lease of new capital or the upgrading of existing capital in certain large enterprises. It must be remembered that the cost of imported capital has already decreased as a result of decreases in tariffs. Employment creation was obviously not a criterion.

  The Commonwealth legislation claimed that the allowances were for industries with an effective rate of assistance of less than 10 per cent. Up until 2 September 1993, 80 per cent of projects registered are in the manufacturing and mining sectors. To give honourable senators an idea of what the allowance was meant for, let me quote the One Nation statement:

The Government wishes to build on this advantage and promote an early upturn in investment in new plant and equipment for projects which offer particular benefits for Australia's competitiveness in world markets.

The broad criteria intended to identify such projects relate to the absence of any substantial assistance or protection. This was mentioned in relation to the rate of assistance being less than 10 per cent. The broad criteria state:

.positive facilitation by State and local governments in relation to such matters as project approval processes—

For that read fast-tracking—

and, where appropriate, the economic and efficient pricing of inputs under the control of public utilities and statutory marketing authorities. Where a need for similar or complementary action at the Commonwealth level is identified, it will be taken

.employers and employees committing to management and industrial relations arrangements which promote the achievement of world best practice.

How does this link with the states actually work? In Western Australia it came out in a report called The WA Advantage. I was somewhat horrified at the time because, according to that report those projects which would be disadvantaged would be the ones that would not receive special attention and administrative assistance. Those were projects with a capital investment of less than $50 million; those employing less than 100 people—that is, the majority of Australian businesses; those producing for the local market; and those not requiring significant infrastructure to be provided by the state.

  This is one of the major rubs. The state government in Western Australia, in linking with the Commonwealth legislation, said, of the projects to be identified, that one of the identifying criteria was the creation of significant infrastructure which was required by the state. That is assistance, but somehow or other it did not get added in. If, as part of the criteria, the state were required to provide cheaper inputs like electricity and water, that is also assistance, but this somehow or other did not get added into the 10 per cent. The other criterion was that those people who were disadvantaged were those who were not requiring an environmental clearance, including many who were helping to repair the environmental damage. The other people who were disadvantaged by this package were those not impacting on Aboriginal reserves, national parks or areas of major land use conflicts.

  The way it worked in Western Australia was that the Commonwealth legislation worked in with Western Australian legislation which actually singled out large, imposing projects which had major environmental impacts or major impacts on Aboriginal land, or which required large amounts of state government assistance. The way the actual legislation worked in Western Australia was contradictory. In other words, apart from fast tracking and reduced tariffs on electricity and water in Western Australia, the selection criterion was that the community had already contributed to the projects' infrastructure costs.

  Considering that in Western Australia there are already a number of other built-in subsidies, such as reduced royalties, it would appear that the development allowance has already defeated its own purpose. In other words, this so-called development allowance is operated as a job shedding subsidy to industries which are already heavily subsidised by the community, even without costing in the environmental costs of such subsidies. In the absence of any real information that such an allowance is not simply allowing large corporations to benefit even more at the expense of employment, the Greens (WA) senators cannot support the expansion of this scheme.