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Thursday, 3 November 1983
Page: 2316

Dr THEOPHANOUS(4.37) —The Bounty (Room Air Conditioners) Amendment Bill is an example of the kind of approach which we need to take to industry policy as a whole, a matter that I will address a little later. In this case, the only remaining Australian company producing room air-conditioners has been faced with severe import competition. As a result, there was a real possibility that the company would soon be forced to close. The company took its case to the Temporary Assistance Authority and a recommendation was made that we continue bounty assistance for the year 1983-84. This will cost $1.5m. In addition, because the local market has been flooded with foreign air-conditioners, it has been decided to impose a quota on imports for the coming year.

The situation of imports pouring into Australia and putting enormous pressure on domestic manufacturers unfortunately is not an isolated incident. Indeed, from 1980 to 1982 imports into Australia increased by $6 billion, while exports increased by less that half a billion dollars, which had a significant impact on the balance of payments. In many cases the foreign companies were using unfair practices such as dumping of products at prices lower than the cost of production in the home country. The Government is currently looking at the dumping situation. During the period when we were experiencing a most serious depression throughout the Western world, Australia seemed to be a particularly favoured place in which to dump products. In other cases we have also had price cutting by foreign companies and this has been used to squeeze domestic manufacturers out of the market. The rub is that once that has been achieved, prices have then skyrocketed. So the domestic manufacturer has been squeezed out and prices have gone up again. One wonders what would happen in the case of air- conditioners. The previous Government scandalously ignored this situation to the point where 100,000 jobs were lost in manufacturing in its last year in office. In my view it stands condemned for totally ignoring this situation of the misuse of trade and the inhumane consequences on industry policy. Indeed, the previous Government took no account, while this was all happening around it, of the social consequences of its actions.

The involvement of this Government in industry policy development will have to be a necessary feature in order to have a coherent industry policy. We often hear calls from the Opposition-indeed recently the Leader of the Opposition (Mr Peacock) made a strong statement in this regard-for the Government to get out industry development. Mr Deputy Speaker, there is no country in the industrialised world in which the government is not heavily involved in planning and the associated processes in relation to industry policy. Without such involvement and without a coherent policy on things such as protection, one cannot have an industry policy which works.

No country has been able to establish or develop its industrial base without two preconditions: Firstly, protection from excessive and unfair import competition-I emphasise those two factors, excessive and unfair-and secondly, direct government assistance to those industries which are viable and which can survive in a fair, competitive climate. 'Fair, competitive climate' does not mean unfair practices. This is a matter which has to be looked at again and I believe that the thrust of the Government's industry policy is based on those two principles. Indeed, if one were to look at the Labor Party's platform on industry development one would see that it is based on the notion that in areas where private enterprise fails, for example, to invest, the public sector must come in in a dynamic way and either assist in the investment of the private sector or carry out the investment itself.

The question of investment is a crucial one, especially for industries which are facing having to close down altogether, as is happening in this case. It is very unfortunate that, for example, instead of having all of the production of air- conditioners carried out in Australia, we are facing the possibility of having no production of air-conditioners in Australia unless the Government acts in relation to this matter. I would not emphasise this point if this were an isolated incident, but many companies are facing this situation. You may recall, Mr Deputy Speaker, that the Treasury papers predict a downturn in private sector investment in industry of the order of 14 per cent for this forthcoming year. I put the question: How can we therefore look towards substantial improvement in industrial development if the Government does not get more involved through providing direct assistance, indeed in some cases through public equity? Both factors are important aspects of the Labor Party philosophy for the creation of long term employment and for turning around manufacturing industry generally.

I shall speak on other occasions about various forms of government intervention which are required to support the manufacturing sector. However, let me on this occasion refer to the measures being used in this Bill-bounties and quotas, which are forms of protection. These forms of protection are often attacked by those who believe in the myth of free trade. I say 'the myth of free trade', because it is indeed such a myth. The honourable member for Ryan (Mr Moore), who spoke a few moments ago tried to emphasise the usual get tough method: 'We are not going to protect these industries for much longer. If they don't get on their feet, they will be left to the wolves'. This kind of approach and rhetoric which we hear so often in regard to industry policy in this country has become boring and ridiculous. It is time we grew up and stopped using rhetoric to replace sober and scientific analysis of the realities of the situation.

If one were to make a sober and scientific analysis of what is happening in the real world, one would find that the world of Milton Friedman and other characters who talk about the total free trade situation and the free market does not exist. What exists is a situation in which other countries are gaining advantage over us as a nation because we are failing to face the realities of the trade situation and the protection issue. To those people who constantly attack protection, protection of one's own industries is seen as a kind of narrow, nationalistic approach to a world-wide problem. As I have mentioned, in some idealistic world one could perhaps put forward that argument. If such an ideal world existed, it would be good to have total free trade and no barriers of any kind, but this world does not exist and indeed most of Australia's trading competitors and the nations with which we trade have very different philosophies and a very different and much tougher approach to their national interests.

It might be thought that Australia is some kind of absurdly highly protectionist country. The fact is that in overall terms our protection levels have been reduced. Indeed, the Australian protection measures when considered in totality, when considered vis-a-vis all of the protection measures used by other countries, and not just tariffs, are very poor indeed. In fact, totality of the protection of our manufacturing industry is of the order of only 14 per cent. It is not exactly a massive amount of protection or some kind of huge impost on the nation, as some people who have talked on these matters would like us to believe .

This point is not generally understood. When people look at the protection measures used in Australia, they look at tariffs and tariffs alone and they say: 'Oh, we have high tariffs compared with those of other countries'. They do not look at the fact that in these other countries many other protection devices are used which we have never used and indeed in some cases we have never even heard of. For example, the European Economic Community uses literally thousands of different devices of a non-tariff kind to keep out goods from other countries which it does not want. Yet at the same time the EEC engages in very vigorous dumping practices, including dumping primary products on the third World countries to the disadvantage of Australia.

We have to face up to the reality of this situation. We cannot continue to look simply at the protection issue on the basis of tariffs alone or even on the basis of tariffs and quotas; we have to look at other means which we can use to protect our industries from unfair competition. In this regard, as I mentioned earlier, I am very concerned to see that the revision of the dumping arrangements be carried forward as quickly as possible. Not only a revision of the dumping arrangements is required; some of the procedures need to be gone through also in order to establish that dumping has taken place.

One of the things that came out at a recent meeting that the Caucus Industry Committee held in Brisbane with the Metal Trades Industry Association of Australia and the metal trades unions was the extraordinary difficulty companies are having in establishing that dumping has taken place because the onus is put on them actually to establish that dumping has taken place. The onus is on the domestic company to establish that this is the case. This basically means that the Australian company then has to get access to information about the kinds of costs involved in the production process in a foreign country. In the case of some countries this is very difficult indeed. Imagine an Australian company having to get information about the cost structure of a private company in a place such as Taiwan and then having to put forward a case that dumping has taken place.

I think this matter needs to be looked at in greater detail. We need to ask ourselves whether we will allow to continue a situation in which many companies are claiming that dumping is taking place but are finding it difficult to prove their case because of insufficient access to the kind of data base from which it would be possible for them to establish their case. I believe that the Government can play a role in assisting with the data base in relation to these matters. In fact, I think something ought to be done about the onus of proof in these matters. I am not saying that the whole onus ought to be put on the importer, but perhaps we ought to see what the Government can do to resolve this problem of the onus of proof in relation to cases of dumping and other unfair trade practices.

The argument that is usually put up in relation to this matter is that, of course, we have an obligation to support the poor people of Asia. I am one of the first persons to indicate strong support for assistance to the Third World countries of Asia. I must say that the Opposition, when talking about these matters in trade terms, tends to like to make a distinction between some Asian countries and others, in terms of which ought to get assistance and which ought not. The distinction is drawn more on the basis of its political beliefs than on the basis of genuine humanitarian assistance. Genuine humanitarian assistance is one thing, but trade with an Asian country which benefits the multinational foreign corporations which are owned not by the Asian country but by Americans, Europeans or Japanese, with the profits and benefits of that trade going not to that Asian country but to the multinational corporations and owners, surely is a very different proposition. We should make a greater examination of where the benefits of trade lie. We should cast a more critical eye over engaging in trade with Asia on the basis of simply allowing products to come into this country without our entering into bilateral agreements.

Bilateral agreements can be a very important way of preserving the national interest in these matters. It need not be the only way. There is no contradiction between having some multilateral arrangements and some bilateral agreements. But I emphasise that, if we are to have trade relations with other countries, those relations should be based on an honest and a balanced approach rather than on the kinds of practices adopted in the past, which have led to situations such as that faced by the room air-conditioner industry, in which the last company is about to go to the wall. The company involved, Email Ltd, is based in South Australia. Can there be any State which has suffered more from the run down of our manufacturing industry than South Australia? Can there be any State which has suffered more from the sort of process that I have described at some length in this House than South Australia? In South Australia one industry after another has been collapsing.

In South Australia long term unemployment is not some abstract concept but a concrete reality. Recently I visited Adelaide as Chairman of the Industry Committee. I was stunned by the crisis atmosphere in relation to a variety of manufacturing industries about which people spoke to me. The Government, in my view, has an obligation to support industries in that State. Indeed, it has an obligation to help to develop new ones. I shall be urging it to do so. I believe that this Bill makes a small contribution to that process. I urge the house to support the Bill.