By Peter Boyle
The Australian Democrat-initiated independent parliamentary inquiry into tariffs and industry development has called for a 12-month pause in tariff reduction and an urgent reappraisal of industry policy.
The final report was released on April 22. "Current policies are decimating Australian industrial capacity, escalating the steeply rising waves of cheap imports and making sure that the 1 million unemployed Australians will be joined by many more", said Democrat Senator Sid Spindler, the chairperson of the inquiry.
Spindler said that Prime Minister Paul Keating's recent call to industry to take responsibility for unemployment was "hollow" while his government pressed ahead with further tariff cuts and irresponsible "macho economics" which were throwing workers on the scrap heap.
Last June, the federal Labor government and the opposition refused to support the Democrats' call for an official Senate Select Committee on the tariff question. The independent parliamentary inquiry subsequently established — the first ever to be held in Australia — heard 129 witnesses and received 127 written submissions over the last nine months. Employer groups, unions, industry sector representatives, economic and trade analysts and local government authorities made submissions.
Nine written reports were compiled. Some of the findings were:
- Up to 20% of job losses in the last three years were due to tariff cuts.
- Regional communities have been hardest hit by unemployment caused by tariff cuts, recording general unemployment levels of up to 29% and youth unemployment above 50%. Entire communities are being destroyed as crime rates, family break-ups, bankruptcies and the drift to the cities increase.
- The share of Australian manufactures in the domestic market declined from about 65% in 1972-73 to 48% in 1990-92.
- For every $1 million of manufacturing output lost to imports, Australia loses 29.5 person years of employment, $280,000 in tax revenue, $255,000 disposable income and has to fund $231,000 in social security payments.
- Australia is the only country with car, textile, clothing and footwear industries to have abolished all quantitative restraints on imports of competing products.
- Some 243 Australian export items faced non-tariff measures (such as bureaucratic obstruction, surcharges, export liberately restrictive labelling, packaging and quality controls) imposed by 29 countries.
- Australia does not avail itself of GATT-sanctioned temporary tariffs available when industries are threatened by disruptive practices or when balance of payments difficulties are being experienced.
- Australia ranked 16th among the 19 members of the OECD in its spending on research and development.
Spindler said that the inquiry's final report does not advocate a return to old-style protectionist policies.
"However, the current non-policy of broad tariff cuts — and in particular the timing — must give way to a selective industry by industry strategy, using incentives, appropriate protective devices, higher research and education investment — i.e. a positive trade and industry policy developed in cooperation between government, industry and unions."