REPORT OF THE STUDY GROUP ON STRUCTURAL ADJUSTMENT
Ministerial Statement
Mr. MALCOLMFRASER ( Wannon Prime Minister)
For the information of honourable members, I present the
Report of the Study Group on Structural Adjustment, and seek
leave to make a statement on the future handling of the Report.
The Study Group, chaired by Sir John Crawford, was set up to
examine and advise the Government on the adjustment problems of
Australian manufacturing industries. Other members of the Study
Group were Sir Brian Inglis ( Chairman of the Government's
Australian Manufacturing Council and Managing Director of Ford
Australia); Mr. R. J. L. Hawke ( President, Australian Council of
Trade Unions); and Mr. N. S. Currie ( Secretary, Department of
Industry and Commerce). I would like to place on record the
Government's thanks to the members of the Study Group and
particularly to the Chairman. The Study Group's Report
represents a further contribution made by Sir John in the course
of a long and distinguished career.
Mr. Speaker, in its preface, the Study Group expresses
its concern that " expectations about its Report have been raised
too high in many quarters".. As the Report makes clear, the
challenges facing Australian manufacturing industry are great
and there are no easy solutions. The answers are necessarily
to be found in a wide complex of policy measures. The Report,
as requested in the Terms of Reference has addressed itself
to these measures.
In the view of the Report, lower population growth
rates, technological change, import competition, changing
patterns of consumer demand, and wage cost pressures are all
part of the challenge requiring these measures. The Report
notes that: " In the early 1970s, wages especially, those
for women, increased sharply, partly as the
result of the introduction of equal pay.
In 1973-74 alone, minimum award wages
increased 37 per cent for females, and 27 per
cent for males."
In addition the Report underlines the fact that:
" Government action has at times Contributed
to the adjustment pressures on industry. The
per cent across-the-board tariff cut in
1973, appreciations of the exchange rate in
1972 and 1973, and a scaling down of the Export
Incentive Scheme in 1974 are important examples
of such actions. However, more recent Government
actions have been directed towards reducing
inflation and reducing external pressures on the
hardest-pressed import-competing industries
through limiting imports by quotas and temporary
increases in tariffs. Devaluations of the
Australian dollar since 1974 have also assisted
the import-competing industries as well as the
export sector."
The Report proposes a series of positive measures to
respond to the challenges and opportunities faced by Australian
manufacturing industries. The Government believes that the
analysis and recommendations contained in the Report will be an
important contribution to its consideration of long-term policies
to assist industry to adjust to a changing environment and to
promote sound industrial growth in the future. The Report also
provides a focus for all interested parties in their evaluation of
future prospects for Australian industry. ./ 3
The Report endorses and considerably elaborates the
need identified in the White Paper on Manufacturing Industry
for Australian industry to become more competitive, better
able to compete with imports and to enter export markets.
The manufacturing sector must be export oriented if it is to
use fully our resources and skills. The Australian market is
seen by the Report as being too limited for any other policy.
The Study Group is " in favour of the Government
following policies that set the right climate for investment and
growth" and it has proposed an extended range of incentives as
the principal means of encouraging industry to become more
competitive and export-oriented. In this way, the Report
believes growth rates in the sector can be raised and employment
better sustained and expanded.
Many of the areas covered by the Report are matters
to which the Government is giving continued attention: export
development, industrial research and development, investment
incentives, productivity improvement and industrial financing.
The Government has already introduced taxation
concessions to encourage investment; made significant improvements
to export incentives; substantially increased funding for
industrial research and development; and instituted other
programmes designed to improve productivity in industry. In
addition, particular emphasis has been given to increasing our
efforts to secure better access to overseas markets for Australian
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goods, a matter heavily emphasised in the Report.
The Crawford Study Group believes that further
improvements could be made in the range of programmes and has
put forward a large body of recommendations. It sees the
need for a " positive" strategy to deal with adjustment
problems, what it terms an " industrial adaptation policy".
Other elements in the strategy outlined and developed in the
Report include the gradual adjustment downwards in the higher
reaches of Australian protection levels; an overseas trade policy
designed to secure markets for Australian manufacturing exports;
manpower policies to help the workforce to adjust to new
employment opportunities; and special policies for the most
highly protected industries, aimed at easing the process of
adjustment for them.
Each of the Study Group's recommendations will be given
very careful consideration. Many of them have far-reaching
implications. In a number of cases, the Study Group's analysis
of particular issues will as it recognises be complemented
by related studies commissioned by the Government such as the
Committee of Inquiry into Education and Training, the Inquiry
into the Process of Technological Change in Australian Industry and
the Inquiry into the Australian Financial System.
Mr. Speaker, the Report will be a very valuable input
to the Government's decision-making process. It is very much
concerned with what the authors believe to be necessary and
practical programmes. It will assist the Government to ensure
that future policy decisions will contribute to the maximum
possible extent to achieving the Government's overall economic
and industry policy objectives, and to improving the competitive
position of Australian industry and to assisting the transfer of
resources to those competitive, export-oriented industries which
in the years ahead must provide the basis for a successful
industry policy and enable manufacturing to play a much stronger
role in the economy as a whole.
Significant progress has been made in bringing down
inflation and improving the competitive position of local
industries and the Report recognises that " manufacturing is in a
better position to export than it has been for some time". There
is now evidence that Australian industries are increasingly being
able to exploit market opportunities overseas and that our
improved competitive position has generated significant interest
in new investment in local industry. It is essential that these
gains be sustained and new opportunities actively sought if the
economic growth which would facilitate structural adjustment is to
be realised. In view of the importance and breadth of the matters
raised in the Study Group's Report, it is being tabled now so that
it can be widely and intensively discussed and the community's / 6
4 I 6.
response registered by the Government. A special Committee of
Ministers has been set up to coordinate the Government's
assessment of the recommendations. This Committee will be
chaired by the Minister for Industry and Commerce. Other
members will be the Ministers for Primary Industry, Education,
Industrial Relations, the Treasurer, Employment and Youth
Affairs, Productivity, Business and Consumer Affairs, and
Special Trade Representations.