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Tuesday, 4 October 1983
Page: 1279


Mr LIONEL BOWEN (Minister for Trade)(6.02) —I thank honourable members for their contributions, wide and varied as they were. Estimates for other departments relate to primary industry and I have no doubt that other matters will be mentioned when those estimates are dealt with. I want to advert to the matters relating to trade and to make some comments in the brief time available to me. This Budget provides approximately $300m by way of assistance to export industries. It is significant that there are promotion outlays of $35m and about $4.2m which will provide for new initiatives. In that sense we are very mindful of the fact that trade is the life blood of what we are about in this country. It is important that we talk about new initiatives and trade promotion activities. This will involve substantial sums of money, missions and activities in markets throughout South East Asia, the Middle East, New Zealand and the Pacific.

We also need to talk about areas of high technology in the provision of products and services. Whilst this has not been clearly identified, one of the fastest growing export areas is what is called elaborately transformed manufactures. Despite the fact that our manufacturing industry is declining in turn from the point of view of domestic production, there is an innovativeness about Australians which must be looked at. I think one of the gaps in my Department at present is that we do not seem to have any segment specifically related to the export of manufactures. The Trade Commissioner Service introduced in the 1930s arose out of a meeting in Sydney of all the State representatives from the chambers of commerce and the chambers of manufactures. Those people were told: 'You also have to look at what you can do to survive'.

I think it is very true that everybody who has participated in this debate is anxious that we do better, and so am I. They identified the markets in which we can improve. I am anxious that we improve our position rapidly. China was mentioned particularly. We have established a special section to deal with China . I am delighted to know that it looks like achieving a rapid improvement. This section does not relate only to the areas we want to talk about, such as the agricultural area, but also to technology and the areas where we think we can certainly play an effective role in China's modernisation program. We also want to talk about the North American market. Let us make it very clear that there are market opportunities for us in Canada and the United States of America, as there are in Japan, if one is talking about areas which, at present, I do not think have been adequately explored. The New Zealand-Australia relationship will work well, although there are a lot of difficulties associated with getting it started because there is a lot of uncertainty about which way it should go.

In terms of domestic relations it is also important to look at the States. They have a role to play. I am anxious that we promote what is called Commonwealth- State trade promotion programs. The States can be involved because they run the ports. They run a number of the resource areas. We have to encourage them to work as a nation and not to have six or seven States all trying to sell the same product overseas and cutting each other's throat in some of the markets in which we should be acting in unison. The buyers are acting in unison and it is important that we, the sellers, understand that there is an Australian concept. I am delighted to know that our coal producers are taking part in study groups. I have encouraged that. I want to see the coal producers really discuss matters relating to the industry and to what will make that industry effective. It is quite counter-productive to have sales of coal at a loss and mines closing when we have such a precious energy resource.

I am disappointed to think that the Leader of the National Party (Mr Anthony) is so upset about what is called an overseas trading corporation. He opposed it last time it was proposed. His Party defeated such a proposal last time it was put in the Senate. We do not have an overseas trading corporation. The Japanese have a number of trading corporations. As a matter of fact, I am told that we lose about $40m on the sale of our wool to the Soviet Union through Japanese trading houses. How can we afford to ignore the fact that other nations are now using this sort of additive to their ability to trade when 30 per cent of world trade is government to government? The sugar industry wants to talk about taking fertiliser in exchange for sugar. Why can that not be done? But we cannot always expect the private sector to be able to do such things. This applies right across the board. I am having a feasibility study undertaken about an overseas trading corporation and I invite the private sector to be right up front and involved with that. Such a corporation would operate only from the point of view of taking goods to guarantee that we get a sale which we would not otherwise get . For example, it is quite silly to think that we are now letting the trading houses of Japan sell so many of our goods and get the benefit of that.

There are a number of matters which I cannot readily take to much of the Committee's time in discussing. The Leader of the National Party-he was fair in some of his comments but certainly not in relation to this matter-suggested that there were some problems in the industrial relations area in the Pilbara recently and that the Government stood idly by. We did not stand idly by; far from it. The problem involves difficulties in that management in Australia is not really understanding industrial relations as it perhaps should be. For example, if three apprentices served their time in the Pilbara and an employer decided that he was not going to employ them any longer, it is natural, that with these three young men facing dismissal, the Australian sense of fair play, the rest of the tradesmen might say that that was not giving them a fair go. The matter was as simple as that. We could not really get to the heart of the problem because, firstly, it was virtually a State matter and, secondly, regretfully I do not think the company responsible was very mindful of the fact that it could have done something about the matter. The dispute certainly cost us about $30m in terms of trade.

It is wrong to put all the blame on the unions or the workers when one looks at areas such as the Pilbara. I know things have to improve. Simply to make the statement that the unions and the workers are always wrong is not right. They have a very effective performing position in terms of commodity sales. It is counter-productive to be suggesting all the time that there is something wrong with them. One can look at the very poor track record of a couple of companies in Australia which could do a lot better in the area of industrial relations. Some of the companies in the same region are miles ahead of the others and have had no industrial troubles whatsoever. One has to look at the personality problems that originate in that area.

A matter also identified today by the Leader of the National Party was our credit rating. I am happy that he raised the matter. When I inherited this portfolio our current account deficit was over $9 billion. I think we will get it down to $6 billion. The forecast is that it will be $6 billion for the next five years at least. Why is that so? The reason is that about one-third of that deficit relates to profits remitted to corporations overseas. The problem is: For how long can this country go on borrowing just to cover the current account deficit? I have looked at an excellent paper given to me by the Trade Development Council. It says that this deficit will remain undiminished and that we will need to continue the capital inflow. The paper states:

The Commonwealth government's overseas debt obligation was $6.9bn . . . Taking into account State Government guaranteed raisings . . . Australia's publicly guaranteed sovereign debt currently stands at about $10bn, half of which falls due for repayment during the next decade. If overseas indebtedness of enterprises is included ie. debt which is not government guaranteed, Australia's aggregate foreign debt is closer to $40bn.

If this amount is going to escalate, as it obviously will, is it not obvious that we are having all this difficulty with trade in terms of what can happen to our exchange rate and everything else? I think it is very important that we, as Australians, realise that we have to do much better in a certain number of areas . We do not mind foreign investment, but we cannot have foreign domination, where so much money is remitted overseas that our current account is affected. Nor can we have the problems of invisibles, as high as they are, particularly with freight. We carry only 4 per cent of our own goods in our own ships and much of the other money goes to foreign corporations in insurance. They are some of the things that honourable members can identify. I know that they have not had the time to talk about them today.

I congratulate Mr Teese of my Department who has worked tirelessly to get the international arrangements for sugar on a basis that will help the producers in Australia. They are the most efficient producers in the world, but what are they up against? They are up against the fact that the European Economic Community and others are subsidising their sugar, have massive stockpiles and are now not prepared to come to the agreement that Mr Teese put forward. For example, France has advised that the EEC would not accept what is called a reference export availability of less than 6.5 million tonnes. That is virtually its own reserve. Australia has proposed that we leave the availability at about 3 million tonnes, but the EEC refuses to participate.

These are the problems that Australians face. We are pretty fair traders and we are very efficient, but we do not always get a fair result when it comes to international arrangements. World sugar prices over the last two years have been depressed by world record surpluses. Late last year the price fell to US6c a pound, the lowest price for 15 years. These are the problems. I would not want it to be thought that Australians were not trying. In fact, Mr Teese of my Department is responsible for putting forward these propositions. He cannot get agreement not only from the EEC but also from Cuba in terms of the operations of the Council for Mutual Economic Assistance. It does not want to include its particular deals with the Soviet Union as part of the package. We have awful problems in this area.

I am happy to say that we have come to some sensible arrangements in the beef area but again there was poor forecasting from Australia-very poor indeed-as to our ability to provide the appropriate quantity of beef to the United States market. That got us into no end of trouble and it was only after special representations that we could get another 40 million pounds sold there. I am disappointed that corporations that should have known better were not able to gauge Australia's capacity accurately.

All of these matters are of vital importance. I have undertaken a review of the Trade Commissioner Service. I think it can be substantially improved. I think that improvement ought to relate to linguistic skills, apart from a few other matters concerning our dealings with other countries. I think also it is important that we talk about regional development. I am anxious to establish regional trade commissioners in areas such as Geelong, Townsville and Newcastle, to mention just a few. I want the co-operation of the States. Other matters relating to minerals and energy were raised by my colleagues and the Minister for Science and Technology (Mr Barry Jones) would like a couple of minutes in which to deal with them. I thank honourable members for their participation in the debate.