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Tuesday, 11 October 1983
Page: 1588

Dr HARRY EDWARDS(9.49) —I will direct my remarks to the budget for the Department of Science and Technology. In doing so, I acknowledge at the outset the contribution the Minister for Science and Technology (Mr Barry Jones) has made to lifting public awareness of the challenges and opportunities of new technology and the importance of getting Australia more into high technology industrial development. That is an objective of very great importance for Australia today. But, having said that, the 1983-84 science and technology budget is a disappointment. While there has been a lift in funding in some areas bearing on the objective to which I have just referred, this has been done at the cost of cutbacks in other areas, most seriously the Commonwealth Scientific and Industrial Research Organisation, Australia's premier scientific research organisation.

The fact is that the overall increase in the science and technology budget is a mere 4 per cent in money terms, which is considerably smaller than the annual increase under previous Liberal-National Party governments in recent years, for which they took a fair battering from this Minister. In respect of CSIRO, which accounts for $316.9m of the Department's expenditure, the actual fall in the figure as against last year is mainly in the area of capital funding. But even so the provision for current funding will, in the face of inflation, involve the general programs of the organisation having to suffer a reduction in both staff and operating funds of 2 1/2 per cent. There can be no doubt that this will have a long term deleterious effect on the organisation. On the positive side of that , however, there is an increase of $4m to supplement CSIRO's existing programs of research in particular areas of new technology. A further $1.2m is provided for the proposed new contract research company, Sirotech, to assist in the commercialisation of CSIRO research results.

I now turn to other sectors of the science and technology budget. Funding for the Antarctic is generally well below that projected by the previous Government and indeed even further below the election promises of this Labor Government which promised a 300 per cent increase in funds for Antarctica. Again no money has been allocated for the $10m upgrade of the Landsat station which was approved by the previous Government. Thus, a valuable technique for monitoring our natural resources is being lost to Australia. What of the Government's commitment to new technology here? I suppose Australia's resource industries, which contribute massively to wealth generation in Australia, are not in the ' sunrise' set.

On the positive side, there is a major boost to the Australian industrial research and development incentives scheme-a 36 per cent increase to $71.7m. I urge that an increasing proportion of those funds be devoted to development as distinct from research and, further, that that support should primarily be directed to smaller firms. The other area of substantial increase-that is, percentage wise; the actual sums involved are comparatively small-is in respect of a range of technology and innovation programs. Thus, for the Technology Transfer Council, the Productivity Promotion Council of Australia and the Industrial Design Council of Australia, taken together, the allocation is more than doubled.

But in respect of fostering technology based industry, and the research and development which nourishes it, all this is rather heavy on bureaucracy and on the Government doing the job. The real action in high technology industrial development and new jobs has to come from the private sector and therefore the Government is on surer ground in its decision announced after the Budget to implement the recommendations of the report of the Australian Academy of Technological Sciences, the Espie Committee, which report I stress was commissioned by the previous Government, to provide tax incentives for venture capital. That measure commands general support. But the Government needs to get on with the job of passing the necessary enabling legislation as a matter of some urgency. The scheme, or its acceptance by the Government, was announced in early September and since then something of a hiatus in venture financing appears to have occurred. Thus, to avoid what money there is available drying up , I suggest that the Government needs to act with some expedition.

In summing up on those remarks, while some headway in re-ordering priorities has been made, the initiatives are nowhere near as extensive as the Minister promised in the runup to the election and in his rhetoric since, nor is the approach under this Minister and this Government as novel as the Minister would have the public believe-or even the public affairs commentators such as Richard Carleton, whom the Minister seems to have bluffed. Witness the last-named measure to which I referred, which is essentially a private sector arrangement strictly in accordance with the report commissioned by the previous Government and prepared by a committee which the Minister himself described at the recent technology conference as 'a committee of dedicated capitalists'.

I wish to underline a few points in this matter of getting Australia more with high technology, points which I think the Minister often loses sight of. The first is that high technology is important not only in respect of the emergence of new industries producing high technology products as such-computers and computer software-but also in the upgrading, revitalising and renewing of existing industries. After all, for many years yet established industries will be providing the bulk of employment in industry. While new process technology in established industry, making for increased productivity, may spell some considerable reduction in employment, that is better than the catastrophic fall that could result in the absence of unconscionable levels of protection, if the technology is not adopted.

The second point I make is that in referring a moment ago to the importance of new technology for new products and new industries, I was not suggesting that Australia could compete broadly, for instance, in micro-electronics mass producing computer hardware and the like; but we are well placed to custom design and produce silicon chips or computer software or to apply computers to material processing and so on. In the biotechnology area, it would be difficult to compete in human pharmaceuticals-though not, perhaps, monoclonal antibodies- but plant genetics and veterinarian applications could suit us well. I stress in saying that that I am only being indicative. The market will determine the matter and that is the central point. That is where the Minister for Science and Technology, who is at the table, typically oversteps the mark. Persuaded that he knows better than any market, he confidently nominates 16 so-called sunrise industries as if these were the only worthwhile fields of endeavour-which, I suggest, is not only misplaced but also somewhat offensive.

The last point I make is this: High technology industrial development is not a matter for science and technology alone or even primarily, but of creating a favourable overall climate for development, investment, innovation and risk taking. The Minister's stance tends to encourage a sort of science or high tech myopia, that science and technology, while indeed creating challenges and problems of various sorts, is the panacea for all our ills. In fact, it is important to create this climate, which means first and foremost getting the macroeconomic settings of the economy right-real cost levels contained, profitability up and inflation and interest rates down. The Budget as a whole, with which the Committee has been dealing, with its vast increase in government spending and massive deficit, taken together with the Government's commitment to full indexation of wages, does not augur well in that respect.

In addition, it is important to address other fundamental features of the Australian business climate, including taxation policies and depreciation schedules, the profusion of government regulations restricting competition and stifling enterprise and other aspects. The Minister ought to get together with his colleague the Minister for Industry and Commerce (Senator Button) in the other place and, first, agree to abandon threats of a capital gains tax, which would be an awful dampener to venture capital risk taking. Secondly, while the previous Government achieved a good deal in making depreciation schedules more realistic, the Government, if it is serious about technology-based industrial development, should take that process further. Depreciation schedules which foster the process of scrapping equipment and starting again are a powerful encouragement to firms to keep with the state-of-the-art technology and obtain a competitive edge. As I said, getting the macro-economic settings of the economy right and addressing such fundamental features of the Australian business climate is very important. The pursuit of science and technology in isolation will not get us very far.

The CHAIRMAN —Order! The honourable member's time has expired.