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STATEMENT BY' THE PRIME MINISTER, THE HON. P. J. KEATING MP
SUMM* ARY OF R. EMARKS TO EPAC TARIFFS
on 12 March 1991 path breaking changes were announced to the
Parliament uphic6 altered forever Australia's dependence on
the tariff.
In greeting these momentous changes I said in the
Parliament: " The package or measures announced today ends forever
Australia's sorry association with the tariff as a
device for industrial development."
I also said at the same time:
" Today's statement completes the program announced in
the Economic Statement of May 1988.
It puts an end to the high tariff culture which did so
much to dimninish Australia's potential in the post-war
period. But the decisions announced today do more than complete
the transition to an open economy."
The 1991 tariff changes completed the process of tariff
adjustment and were not the stepping stone to further
downward adjustment.
As I have alway ' s said, the Government's policy has been to
wean Australian industry of f protection and to make it
competitive with world industry.
And this has been absolutely essential if we are to develop
secure industries capable of generating wealth for Australia
and permanent jobs.
But the Government has always sought industry restructuring
and adjustment rather than industry elimination.
As I said in the Parliament on 17 September 1990, this
Government has never believed in the mindless pursuit of
zero tariffs without regard to the impact that it would have
on industries.
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Ina the House on 17 September 1990 1 said:
" we make decisions about whether we want industries.
For instance, we want a car industry. We know that a
car industry will not function at zero protection
levels, but apparently those opposite believe that at a
zero level of protection a car industry will remain
viable. It will not. The Opposition is really saying
it does not want a car industry.
The car industry Is willing to invest with a tariff phasing
down to 15 per Cent by the year 2000.
Evidence of this is the commencement of the new Toyota car
plant announced a few weeks ago and the decision by GMII to
commence a new paint plant which I attended last week In
Adelaide. Mitsubishi is also commencing a new paint shop in Adelaide.
The key point is that these investments would not have taken
place with a zero tariff and this is the key policy
difference between the Government and the Opposition.
Phasing down tari~ ffs5 to zero on motor vehicles and parts,
such as passenger car tyres, would mean that these
industries could no longer exist in Australia.
The same is true for textiles, clothing and footwear.
With a tariff of 25 per cent in the year 2000 these
industries can adjust and restructure and will continue to
exist. With a zero tariff they will simply disappear.
This is the policy difference between the Government and the
Opposition, and the Opposition should admit it.
This is not to say that the textile, clothing and footwear
and motor vehicle industries will not be competitive in the
year 2000.
At present, textile and clothing imports into most developed
countries including the US, EC ( UK, France, Italy, Germany),
Canada, Sweden and Japan are covered by the multi Fibre
Arrangement ( MFA) which places quantitative restrictions on
imports through Voluntary Restraint Arrangements.
And quantitative restrictions are the ultimate form of
protection extending beyond any tariff.
Notwithstanding what happens under GATT, Australia will end
up with a textile industry more internationally competitive
than all of these countries with the tariff levels decided
in March 1991.
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The motor vehicle industry around the world is also
protected by voluntary restraints and quotas.
By the year 2000, when the tariff on motor vehicles phases
down to 15 per cent, Australia will also have a motor
vehicle industry which will be competitive and able to hold
itself up in world terms without quantitative restrictions.
CANBERRA 27 March 1992 c F 1"