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Thursday, 21 August 1980
Page: 651

Mr INNES (Melbourne) - I think we ought to swab the honourable member for Hotham (Mr Roger Johnston). His comments were a most left-handed way of supporting a Bill that carries with it a responsibility not only to look at the method of tendering but also to ensure that what flows from it gives the advantage of looking at a broader direction of employment. The Australian Labor Party supports thoroughly the attempt of the Preference to Australian Goods (Commonwealth Authorities) Bill to increase the Australian content of purchases by Commonwealth authorities. It is an excellent principle which can only bolster the prospect of providing increased employment in Australia and boost the economy if pursued with appropriate determination. I have some reservations about those areas of the Bill which appear to lack that resolve and determination.

The aims of the Bill are commendable. There are guidelines for responding to tenders, for allowing for percentages of Australian content, for duty to be added to imported goods if that is not included in the tender price, and for authorities to be more conscious of the need to prefer Australian made and maximum Australian content. But there are a number of matters which concern us. These are fourfold. Firstly, I ask myself: If the Government is so concerned about this problem why has it taken four years to bring this legislation forward from the time the Prime Minister (Mr Malcolm Fraser) first announced the Australian preference policy in September 1976? Secondly, a survey by the Department of Administrative Services revealed a group of statutory authorities which qualified its response to adhering to the Australian preference policy. Thirdly, another group of authorities indicated that it was unable to comply with the policy. Fourthly, I am disturbed at the exemptions clause of the Bill which allows the Minister to grant exemptions to authorities under certain circumstances. I am not suggesting for one moment that there ought to be restrictions in terms of envisaging a possibility whereby Commonwealth departments or other instrumentalities might well be in a tendering position. I would like the Minister to explain to me whether that exemption is available to those bodies and whether they would be restricted in their participation.

Mr John McLeay (BOOTHBY, SOUTH AUSTRALIA) - I think that is spelt out in clause 1 6 of the Bill.

Mr INNES - I am indebted to the Minister. I did read that clause. Perhaps the Minister will be good enough to elaborate on that aspect during his reply. The first area of concern reflects on the Government's sincerity in introducing this legislation. The Minister, in his second reading speech, said:

The Prime Minister announced a policy of giving preference to Australian-made goods in September 1976. This policy was based on the traditional approach of giving selective assistance in special circumstances. Over the succeeding year, however, it become clear that the policy was not sufficiently effective Accordingly, in October 1977, the Government decided to adopt a more positive preference policy, and this was announced by the Prime Minister in his election policy speech in 1 977. In accordance with this, government departments and authorities were instructed to:

(a)   give preference in Commonwealth procurement to goods of Australian origin or of relatively greater Australian content unless there were substantial reasons to the contrary; and

(b)   to draw up tender specifications so as not to exclude Australian supplies suitable for or reasonably adaptable to their needs.

The Minister then went on to say that it had since been discovered that the guidelines spelt out as policy and not in legislation were not operating effectively with several Commonwealth authorities.

Let me underline the fact that the Labor Party regards this legislation as vital and the spirit of it as paramount. But this sequence of government inactivity casts doubt about the motivation of this Government to the principle of preference for

Australian-made content. This legislation has come forward four years after the Prime Minister first expressed his policy and three years after it was promised in an election policy speech. Surely it has not taken three years for a caring government, monitoring the effects of this important policy, to discover that the policy is not working in certain areas and requires specific legislation. Is it in fact just a coincidence that the last time action was taken in this area and promises were made was at the last Federal election? No points for guessing what season we are in at the moment. One would be excused for being rather cynical about the fact that this legislation has arrived at the appropriate time. This sequence of events also reflects the Government's inefficient preference for policy pronouncements in place of legislation. Had there been legislation earlier, certain Commonwealth authorities would not have been able to continue their practice of ignoring Australian content. So I believe the Opposition has every right to be cynical of the Government's motives in bringing this legislation forward now. I argue that a caring, vigilant government would have discovered in much less than three years that some authorities could not or would not comply with the policy guidelines. The commitment to Australian content and Australian made and the broader questions of an offset policy which also applies within this legislation are too important to allow three year gaps to occur before loopholes and difficulties are closed and overcome. Indeed, this legislation is and will remain impotent unless action is taken in other areas to ensure that it can be and will be observed.

This touches on the second and third areas of concern which I expressed - the departmental survey which revealed that a group of authorities qualified its resources to adhering to the policy and that another group were unable to comply with the policy at all. This is a most serious matter yet the reasons why these problems occurred have not been spelt out by the Minister or the Government. Therefore we are left to speculate. Why did a group of authorities qualify its resources? I believe it is the Minister's responsibility to outline the reasons to the House, to the Parliament and to the people of Australia. With unemployment at record levels, it is the proper responsibility of government to take all measures possible to increase employment opportunities. If some authorities were having difficulties meeting the policy guidelines, what new guidelines are included in this legislation to overcome those difficulties? The young people of this country are entitled to know why they are not going to have the opportunity of employment in the future. The announcement made by Telecom Australia in the last few days shows that if there is a determined policy and that policy is carried forward to its logical conclusion to ensure that there is maximum Australian participation then there will be a future for young people coming out of the universities and the education areas that cover the development of technologies which are vital to the defence and security of this country. As I see it, this legislation, albeit commendable in principle, simply legislates the guidelines into law. It spells out further detail but there is nothing in that detail or in anything the Minister has told the House to indicate whether the difficulties some authorities are experiencing have been covered and overcome. At face value they do not appear to be. The authorities who qualified their responses also concern me. I do not see where the problems have been overcome either. Is the difficulty the problem that Australian companies face in these days of uncontrolled growth from transnational companies? It should be clear to all by now that transnationals are treated with cotton-wool love by this Government. The irony is that the cottonwool love is applied to tender, defenceless babies, and transnational corporations could never be described as 'tender', 'defenceless' or 'babies'. We heard the honourable member for Hotham (Mr Roger Johnston) talking about Australian industries possibly having a further advantage. He spoke tongue in cheek about Australian participation and Australian made and what might be the feather-bedding of Australian industries. Let us face it: If we are not going to go out positively in this way then it becomes a joke, just as the offset policy is a joke at present. The 'babies' in this case are the Australian Government Ministers. The pandering to that section of the business world could be one reason why there was a guarded, qualified response from some authorities and a reluctance by the Minister to outline the reasons behind that response. The purpose of this legislation does not appear to have been served by the legislation itself because if there are serious reasons why those responses were given they do not, at face value, appear to have been covered in the Bill. I put it to the Minister that if they have been so covered, he should spell out how, so that authorities can understand clearly their responsibilities in the matter. This measure has not been overdone because this Government is either serious or it is not serious about the important need to provide the facilities for local contract offsetting and for Australian industry to plan for future needs and projected procurements. This 1980-81 Budget again demonstrates the point: Support by the Government to maintain essential industries as a defence measure has been cut by 5.5 per cent in real terms to only $63.5m. This Government and the small percentage of the Australian community it represents have always scoffed at the concept of economic planning as socialist drivel. At the same time, we have seen business turn more and more to government for planning guidelines and the development of a network that provides that sort of organisation. It is essential to the security and development of industries involved in defence. The honourable member for St George (Mr Neil) was a member of the sub-committee of the Joint Parliamentary Committee on Foreign Affairs and Defence that went through a great range of inquiries. It produced a very good report, but not one thing has been done about it.

Mr Neil - This is the Bill.

Mr INNES - Not one thing has been done since the report hit the light of day. I commend the work of the sub-committee of which the honourable member for St George was a member but, let us not kid ourselves, unless its recommendations are put into practical effect the questions asked and the recommendations made will fall to the ground. The irony of this situation is that it has probably escaped the minds of those who sit on the Government benches that their masters in big business, including the transnational companies, will be wanting to take them for a ride again. If there is to be a preference, the Minister for Administrative Services, for whom I have the utmost respect, will have to take a stand and ensure that we will not give effect to the principles outlined by the honourable member for Hotham. The Minister stated:

A further group indicated that they were unable to comply with the Government's policy.

I wonder whom he is talking about. In that statement we have a classic example of the social consequences of the Government's myopic policy. Central economic planning is essential if the ends are to be tied and if the economy is to work for the benefit of the total society and not simply for the selfish greed of a few. The examples I have spelled out typify that. We are talking of purchases of about $3, 300m a year by government authorities. Certainly it is not peanuts. It is scandalous that this spending cannot be restricted to Austraiian produced goods because the Government has not had the foresight to ensure that Australian industry is geared to meet the needs. There has been a running down over many years in a whole range of areas, particularly in regard to the technology that is fundamental and vital to defence requirements, including the items of defence procurement foreshadowed over the next five years.

Australia has untapped potential for implementing this policy in government establishments - in the defence, Telecom and Department of Transport workshops to name a few. For instance, the Department of Transport, along with the Commonwealth Scientific and Industrial Research Organisation, developed the world renowned InterScan air navigation system. The failure of this Government to give that development a proper marketing program is another story, but the development itself highlights the potential for innovation in this country. Telecom workshops have modified international telephone exchange systems for this country but, unfortunately, the modification is becoming the patented property of L. M. Ericsson, a transnational electronics company which will make billions of dollars profit internationally thanks to the Australian taxpayer and the technologists who are trained in this country. It is scandalous that this is allowed to go on.

There is enormous untapped potential in the workshops and in the technicians out in the field, as I have pointed out. For example, the Royal Melbourne Institute of Technology and similar institutions are training people who have the potential to participate competitively in industrial research and development and to be able to lead the world in initiatives in those areas. Why should the young people of this country not participate in the natural growth in that way and have some resources channelled back into their fields? Many defence establishments work at nowhere near their potential capacity or else produce goods of little social value. In regard to the offset work that we talk about, at one time the munitions factory in Victoria produced lipstick cases as an offset against other areas and to keep people employed. That is a ridiculous state of affairs.

The potential to boost Australian production is being wasted because of the Government's commitment to private enterprise and its refusal to allow industry to have the opportunity to develop and compete in a proper way. If that opportunity could be taken, much of the problem in my third area of concern would be overcome. Indeed, we would see much of the $3,300m circulating within the public sector and not being lost to the few overseas who benefit from private profits. Proper planning involves the pinpointing of the future needs of private industry and the involvement of industry in the overall planning program.

Private enterprise in the electronics industry, with participation from Telecom, has produced a magnificent report that lays out the scenario for the development by us of a technological base for ourselves for the future, instead of our being dragged along by the ears and playing second fiddle to overseas transnational organisations which are moving so quickly to control and own the manufacturing base of this country that it is not funny. I hope that we will finish up reversing the situation. Something like 50 per cent of the manufacturing industry in this country is owned by transnational companies or major foreign investors. I ask honourable members to consider the Japanese and American situations. In both cases, foreign investors control only 4 per cent of industry. The situation in Australia is a joke. We have allowed it to get out of hand. But I believe there is a way to retrieve the situation.

My fourth area is concerned more with interpretation than with principle. In itself, the principle of ministerial exemption under extraordinary circumstances is not indefensible. What concerns the Opposition in this case is how the Minister and the Government will interpret the legislation in the short time that they will have to administer it. I hope that either the honourable member for Adelaide (Mr Hurford) or 1 will be doing precisely that in a couple of months. Given the doubts I have raised - the four-year gap between promises and legislation, the silence about the reasons the government guidelines have failed in certain circumstances and the apparent failure of the legislation to wrestle with these problems - the Opposition believes that nothing will change. lt is the Government's real intent that worries us. We do not trust it. We have become too accustomed to seeing this Government capitulate when the interests of the nation clash with the interests of transnational or local investors. In these circumstances I believe that it is reasonable for the Opposition to be concerned at the introduction of provisions which may make the legislation a toothless tiger and unworkable. We would feel much more comfortable if the circumstances under which ministerial exemptions can be granted were spelled out clearly, allowing no room for philosophical manipulation.

Put simply, the Opposition believes that in those circumstances, this legislation probably does not go far enough. However, many of the questions I have raised this evening can be answered by the Minister for Administrative Services. I hope, as I have said before, that we will have an opportunity in the field of Australian tendering to ensure that no restriction is placed on organisations such as Telecom or other statutory authorities, government departments and the like to participate to this end. If that is to be the case, the Opposition commends the legislation in principle. I hope that the honourable member for St George will express some of the views that were expressed by the sub-committee when looking at this question. The Opposition agrees with the general principles of the legislation and certainly does not oppose it, but it has some reservations, to which I have directed my attention. I hope that the Minister will be able to answer the questions I have raised.

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