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Monday, 9 September 1996
Page: 3061


Senator COOK(4.37 p.m.) —by leave—I move:

That the Senate take note of the document.

There are a number of documents on this list which cover returns on bounties: the Bounty (Bed Sheeting) Act, the Bounty (Books) Act, the Bounty (Computers) Act, the Bounty (Fuel Ethanol) Act, the Bounty (Machine Tools and Robots) Act, the Bounty (Printed Fabrics) Act, the Bounty (Ships) Act and the Bounty (Textiles Yarns) Act. All of these bounties serve a vital and important role in Australian industry.

A bounty is the cashing out of a tariff; that is, rather than impose a tariff, causing importers to pay the Commonwealth whatever the tariff level is on top of the cost of their product, to put it in money terms, it is paying the Australian produce company a bounty for each product. Thus it encourages Australian companies to replace imports, and it encour ages Australian companies to grow their exports as well.

The world marketplace is by and large corrupt—not corrupt in the sense of criminal activity but corrupt in the economic sense. It is not that the market is not clean, but there are bounties and protections, both visible and invisible, provided by other countries on their products. For Australian companies trading on the international market, it means that they do not trade on a flat or clean playing field. They trade on a playing field in which other nations support their companies against Australian companies, which are internationally competitive.

Thus it is that all of us for a long time have seen a bipartisan role in a corrupted marketplace of that nature to ensure that the playing field is at least in nominal terms a little more level than it otherwise would be. Bounties are one way of encouraging Australian companies to meet foreign competition which is aided by their governments and to win in the international marketplace.

All of the bounties referred to here are documents setting down properly for public scrutiny what the Australian government has paid to particular companies as bounties in the interests of helping them become more internationally competitive. It is properly before the Senate on the basis that it is taxpayers' money and that Australians are entitled to know what happens to that money.

The document that I would in particular like to refer to today is the Bounty (Ships) Act 1989 relating to payments made during the financial year 1 July to 30 June 1996. This document shows that the Australian taxpayer met payments of $23,728,663.32 to 12 ship construction companies in four states of Australia. Those states do not include New South Wales and Victoria. They are what you normally might call the outlying states.

When you look down the list, you will find that these are the best companies that the Australian manufacturing industry can boast. These companies are world renowned. These companies have the market dominance in the niche of manufacturing fast aluminium catamaran ferries in the world.

These companies include Flagship and Incat Tasmania, as well as a number of companies in my own state of Western Australia, the most important being Austal Ships, International Ship Yards and Oceanfast. All of them manufacture in this market area.

This market area is the only area in which Australia's complex, sophisticated and high-tech manufactures have a world lead. In other areas of the Australian manufacturing sector we have derived technology, we add some of our own and we are in the middle of the market. But in this area we lead the market. It is this industry which is quite critical in giving Australia a worldwide reputation for engineering and innovative excellence, for leading because of its technology and because of its research and development.

You would think that in the case of this sort of industry the government would be eager to ensure that the playing field was even and flat and that this industry had a fair chance in the international marketplace to continue its winning way. It is sad to say that this government chooses not to take that view.

In the budget brought down just last month, this government is prematurely ending the bounty for this industry's sector, thus putting these companies—Incat, Austal Ships and Oceanfast, all 12 companies on this list—at a competitive disadvantage in, to use the economic term, a world `corrupted' marketplace. That is not intelligent support for Australian industry.


Senator Calvert —When was your government going to phase it out?


Senator COOK —Our government was going to allow the Bounty (Ships) Act to run its full term, Senator, and not to prematurely end it. Our government—and I was the minister at the time—was of a mind to extend the bounty.


Senator Calvert —Oh, were they?


Senator COOK —Yes, it was.


Senator Calvert —Where, up here?


Senator COOK —No. Mr Acting Deputy President, I am being interjected upon, but this is a critical point. It was not a secret understanding that the government had at the back of its mind. It was a declared position because of the importance of this industry.

The contrast between the parties—brought out by the interjection from Senator Calvert of Tasmania; and I wonder why he did interject—is that the government of this day is wanting to prematurely end a piece of legislation that aids Australia's international competitiveness. Whereas we, when we were in government, and I, when I was minister, wanted to extend the right of this industry's sector—and all others, for that matter—to be internationally competitive, to compete on a level playing field, to win export credits for Australia as well as to address the problems of the current account deficit. That is the issue that is at stake here.

The other point that I need to make in this debate is that last year—the year under review in which these documents have been tabled—there was a payment, as I have said, of $23.7 million to the 12 companies. That ought to be contrasted to a recent decision that this government made. This government recently decided—in my view rightly, because it had contracts entered into on the basis of the existing legislation—to not do as it intended to do and prematurely end the Ships (Capital Grants) Act.


Senator Bob Collins —As they got beaten into it.


Senator COOK —The National Party claimed they did that in causing the government to cave in. I do not think that that is the full story, but let us not worry about the full story.

A number of companies—the Shell oil company, BHP and the Mackay sugar refinery—had undertaken the construction of ships. The government was going to terminate the ships capital grants scheme, which upon completion of construction would have paid them a major sum to encourage those ships to be built so those companies would use Australian owned vessels in Australian waters for their own needs. As I recall, the contrast here was the amount the Commonwealth government would pay those three companies, all major companies in their own right—that is, $27 million—but the important point is the ships were being built in Holland or in the Republic of Korea.

Here we have an industry which is overwhelmingly Australian owned that has the world market leadership in its market niche. There is a small payment to make the playing field even to end the corruption, in the economic sense of that word, of that playing field, and this government wants to pull the rug from under the industry and chop it out. I think that is an absolute and total disgrace. It goes against employment opportunity. It goes against high skill, high technology and innovation in Australia. It goes against our reputation in the world marketplace to hold our head up as a developed, sophisticated economy able to produce goods of this complexity and sophistication.

When we come to the time this measure by the government is debated in the Senate—and I can mark the spot now—this opposition will be strenuously opposing that measure. We do stand for the interests of Australian industry. We do stand for the interests of making the playing field level and for enabling those who are competitive—and this industry is—realise the gains they are rightfully entitled to. (Time expired)

Question resolved in the affirmative.