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Monday, 26 June 1995
Page: 1775

Senator CAMPBELL (6.19 p.m.) —I wish to make some comments about the Competition Policy Reform Bill 1995. In defence of the government and those of us who support this reform bill, I think that Senator Coulter has misread the motives behind the whole competition policy reform agenda. Certainly to suggest that enhancing competition and making particularly government-owned business enterprises and government monopolies more open to competition is somehow a policy that is designed to only assist people's insatiable material greed is not sustainable on the facts.

  On the contrary, it is a fact that if we do not have efficient production of power—even Senator Coulter in his speech did draw the Senate's attention to this—and we do not have a sensible system of providing power and alternatives in power to people, they will not make the right choices. If we have a system whereby there are massive taxpayer subsidies for the provision of power, people's decisions as to whether to use power off a grid, power generated by the burning of fossil fuels, power used by nuclear generation or power by wind or water—hydropower as it is called—will be distorted. That distortion will take place because people will decide quite sensibly what is the most cost effective way for them to gain the power they need to run their households or their industries.

  If there are hidden subsidies, they will act as one of the incentives for people to use what may not necessarily be the most environmentally friendly form of power. People will even use power that is in the short term more expensive for them, because they cannot afford the up-front capital costs of providing longer term and often less expensive power generation that comes from hydro-electricity, solar generation, tidal or wind power. That is because, historically, governments have made massive investments in power generation.

  In my home state of Western Australia, coal power generation is a very recent example. Governments have made massive infrastructure investments to provide power from those generation facilities, often not necessarily with economic motives at heart. Often a range of even political decisions can come into place when they are building those sorts of facilities. If citizens want to look at producing power from a wind turbine in their backyard or a solar hot water system in their roof, the taxpayer has to meet the up-front costs of providing that power. Certainly, in the short term, they can be a lot higher.

  I want to respond a little to what Senator Coulter said. The point of what I have been saying is that if we have better competition and more obvious government subsidies, rather than hidden subsidies, people will be able to make more sensible decisions and will be able, probably for the first time in many people's lives, to make decisions based on a whole range of rationales. Senator Coulter was making the point that this has all been driven by economic rationale. But if you do not get the economics right, it is very hard for people to make decisions based on other important rationales, be they environmental, heritage, cultural or other.

  One of the points that should be made about the competition reform policy, as it has been put forward by this government, is that it certainly makes some advances in competition policy across the nation between the states, and in the reform of some of the uncompetitive practices by both state and federal governments in the past—and, as has been outlined, by a range of other sectors of the economy. Where it is lacking, and where there is an enormous need for reform in Australia—a reform area that this government has been incapable of dealing with in any significant way—is in a number of other areas in the economy.

  Industrial relations is an area that stands out head and shoulders above just about all the other areas of this nation's economy. The work force forms an important part of that economy. Our industrial relations system is so far out of touch with international reality in terms of what production and international competitiveness we must achieve, that it is a disgrace. The reality of our industrial relations system is that it creates a totally non-competitive environment for many people in this nation. One of the most severely affected portions of that population, particularly the working age population, is young people because the industrial relations system has delivered to Australia some of the highest rates of youth unemployment in the world. After 12 years of the Australian Labor Party government, the percentage of youth unemployment has not changed.

  The Australian Bureau of Statistics last week issued its social trends publication which showed—and I do not have it in front of me, so the Senate will just have to trust me—that in 1983 the youth unemployment figure was around 23.5 per cent. Now, in 1995, the figure is something like 23.8 per cent. That figure has fluctuated a little during that period but the youth unemployment statistic is as bad today in June 1995 as it was during the depths of the recession.

  One very important part of the Australian community is suffering an enormous amount of pain because this government will not apply the principles of competition in industrial relations policies. By saying we put the principles of competition into industrial relations policy or workplace relationships, it does not mean open slather in the workplace. There needs to be—and it is important that there is—protection in terms of standards and conditions at the workplace.

  Many of those standards and conditions have been fought for by trade unions over generations. It is important that trade unions maintain an important role in workplaces to help people there ensure that wages and conditions, and other aspects of employment, are protected. That certainly should go without saying. Unless we have an industrial relations system that allows flexibility and ensures that productivity is enhanced and Australia's workplaces compete internationally, Australia will fall further and further behind. Our living standards will continue to deteriorate in comparison with those of our trading partners.

  Another area of reform where this government has failed to act—I presume because of the power and influence of the trade unions within the Labor party organisation—is in coastal shipping. It is crucial that a nation that has a coastline as long as Australia's and a maritime history as great, and which has the natural advantages we gain from having some of the world's best natural and artificial harbours, ensures that our coastal shipping—that trade and commerce carried on from international shipping and the shipping that plies the Australian coast—is very efficient.

  We should ensure that businesses in Australia and those that seek to trade internationally have a very effective and efficient means of transport around our coasts. We know that with cabotage and a number of other restrictive practices which apply to shipping off our coast, this is simply not the case, although it could be fixed very quickly. Equally, in relation to trans-Tasman shipping, we have across the Tasman a closed shop in relation to unions working on trans-Tasman trade.

  On the other side of the Tasman, in New Zealand, there is a nation that has gone through a bit of an economic miracle at the moment. We should not overstate it, but New Zealand has come from a very poor base in the 1970s through some very hard decisions by the David Lange and Roger Douglas government, followed by Mr Bolger's government. They have taken some very tough decisions. That nation is re-emerging with an emerging economy. A lot of goods can be traded across the Tasman for the mutual benefit of Australian citizens who seek to buy goods from New Zealand and, of course, New Zealanders who we would hope would buy goods from us.

  On a lighter aside, the incredible year or so that New Zealand has had both in terms of the economy and sporting ventures suffered a little setback on Saturday night when it fell to the Springboks. Other than that, it is doing quite well.

  To be serious, trans-Tasman shipping is an important link. Waterfront reform in New Zealand has far outpaced our waterfront reform. The waterfront reforms that were ushered through by Senator Collins when he was the minister have seen some improvements on the Australian waterfront. However, they have not given Australia any net comparative advantage over waterfronts in other parts of the world.

  It is very good to have reform. It is very good to have progress and improvement on the waterfront. However, unless we are improving relative to our trading partners—New Zealand is a very important one—we are not improving. It is no good, for example, to be running faster if a competitor is running even faster again. One does not win the race.

  I will reiterate the reforms. There are the industrial relations reforms, reforms to coastal shipping and reforms to trans-Tasman shipping, where a union to union deal excludes other flagged vessels from plying that trade. Reform on the waterfront will ultimately ensure that Australia's living standards deteriorate in comparison to those of our trading partners. Waterfront reform has an important place in our economic life. It makes Australia an efficient trading nation for the benefit of all of our citizens.

  The reforms that were ushered through the waterfront while Senator Collins was the minister did make some improvements. One problem that exists is that we still have this absolute monopoly over waterfront labour by the unions. We saw in Western Australia only a matter of weeks ago the consequences of a new stevedoring business being established using non-union labour. The other union-dominated stevedoring companies closed down all ports across Australia for 24 hours, again to ensure that their monopoly control over waterfront labour stayed in place. That situation cannot be allowed to occur. As hard as it will be for waterfront unions and the Australian Labor Party to accept it, there needs to be reform of waterfront labour in Australia.

  The Minister for Trade (Senator McMullan) is now in the Senate. He will recognise, even begrudgingly, that if we do not have a waterfront that is up to international best practice, our exporters and those who import into Australia will suffer a disadvantage that they do not need to suffer. As hard as that may be for waterfront unions which have achieved a position of privilege in that part of the Australian economy, they need to understand that sooner or later that will change. The best way to ensure that that change does not hurt them too much and that it does not hurt the country any more than it has for the last decade is for them to embrace competition positively. I certainly will not hold my breath waiting for that to happen. It is a great shame that the government's commitment to competition does not go to those very crucial areas in our economy.

  Senator Margetts and certainly Senator Coulter referred to the environment. Competition does not have to harm the environment. Plenty of evidence around the world shows that, where there is not effective competition, particularly in the area of water services, power, which I have already described, and the management of forest resources, there can often be enormous amounts of waste. That waste will cost all Australians dearly both in terms of what they pay for those services and commodities—be it timber out of the forests or management for environmental values—and in how it will harm the environment. Wasting water in a dry environment like Australia ultimately damages the economy.

  So competition policy does not necessarily have to be the bogyman for the environment that people like the Greens from Western Australia and Senator Coulter will always have us believe. Competition can be a very positive factor for environmental management and long-term environmental sustainability.

  Other areas of competition are very important. An important principle is that competition cannot be a partial thing. For example, in the Commonwealth's own provision of services through some of the DAS businesses there has been a massive opening up to competition from the private sector in providing services to government. But we have to make sure when we open up things for competition that there is competition and contestability at all levels. I do not want to pick on the DAS businesses because they have been making a lot of progress.

  Dasfleet is the government's hire car company. We cannot say that we will untie certain sections of it but not others. We may find that it is much better for the Australian taxpayer to ensure that the private sector can get more actively involved, for example, in the provision of cars to the Commonwealth fleet. Where one ensures that there is competition for the provision of services, ultimately the taxpayer will benefit and the Australian economy will become that much more competitive.

  I was listening this morning to 2UE when Alan Jones was talking about another start-up airline coming to Australia. It reminds me of the problem that happens when competition in the air is created, which is what we have had since the two-airline agreement was thankfully demolished a few years ago. However, on the ground, the Commonwealth has provided massive infrastructure over the past decades, particularly in terms of the terminals, the terminal facilities, the runways and all the other massive expensive infrastructure that has gone into our airports.

  It does not really help Australia's competitiveness both in domestic and international travel if we go to potential airline operators and say, `We're quite happy for you to compete in the skies, but when you get to the terminals you will go to Qantas or Ansett and ask them very kindly if they will let you have a terminal at gate 57, and a check-in counter, if you're lucky, stuck around the corner near the dunnies in the airport somewhere'. If we are going to ensure that Australia achieves the benefits of competition, we have to ensure that that principle is applied all the way through some of these enterprises, particularly some of the former monopolies owned by the Commonwealth and the states.

  In the few seconds remaining to me, I congratulate the government and the heads of government who sat around and worked out this competition policy. It is a great step forward. But if Australia is to make the most of this initiative, we would expand the principle of competition to a whole range of other areas.