Slade Brockman (WA, Liberal Party) Share this | Hansard source

Today, following that contribution from Senator Sheldon, I rise to start clearing up a few misconceptions—and I'll call them misconceptions, not straight-out untruths. There are some misconceptions among the Australian public, largely fuelled by the rhetoric of those opposite about manufacturing in Australia. Would it surprise those who are listening to this debate to hear that manufacturing output in Australia has actually risen since the 1950s? Would that surprise you? Manufacturing output has actually risen since the 1950s. Yes, there's been a change in the mix. Some industries have gone, and others have come in to take their place. But manufacturing output as a whole has risen. In fact, from the 1950s to the early part of this century, manufacturing output in Australia quadrupled. So, when we're talking about the decline of manufacturing in Australia, when we're talking ourselves down as a nation, we're actually talking about the relative decline of manufacturing. As a senator—and I'm sure the same applies to Senator Cash and Senator Scarr, who are in this place with me—one of the absolute privileges I get is going out to so many small manufacturers across Australia. The industrial areas of Western Australia are replete with small manufacturers out there having a go. That is why manufacturing output in this country has actually grown over the last two or three generations, contrary to the rhetoric of those who want to talk down the manufacturing sector, talk down the Australian economy and make some cheap political points about unionisation that do not reflect the reality out there.

What has happened is a relative decline in manufacturing, and that is because we've had another massive success story in this country. The services sector has grown since the 1950s. We all see it in the way we live our lives. We see it in these devices we carry in our pockets. So much of our daily lives and our work and our pleasure activities are on our phones. We see that the nature of the economy has changed over the last 50, 60 or 70 years. Much, much more of the economy now, compared to the 1950s, is in the services sector. That's where we've seen massive growth in our economy. Manufacturing output quadrupled between the 1950s and the early 2000s, but, yes, it has seen a relative decline against the really significant growth, from a very low base, of the services sector.

Why are we actually opposed to the National Reconstruction Fund Corporation Bill 2023? The cartoon caricature we get from those opposite is that we're voting against this bill because we don't like unions. My goodness, what a ludicrous argument that is. We're voting against this bill because it is completely the wrong thing to do at this time and because there are some serious objections to key parts of this bill that are just bad policy. In particular, from my point of view, the use of equity shareholdings in manufacturers by government is an exceedingly bad move. It's a poor policy decision. I know those opposite can say that other governments have done it in the past, but it is a very poor decision to make that a cornerstone of your manufacturing policy. Governments should not have equity stake stakes in business.

The trouble is that Labor governments from the past have form on this. We've seen Labor governments getting way too close to business at the state level particularly. A number of administrations in the past have become, well, infamous. I will go to an example in my home state. Senator Cash, who's in the chamber, very well remembers the WA Inc days. The name 'WA Inc' has become synonymous with political malfeasance at the highest level, where political players, proverbially, got into bed with corporate titans and sent government money, by way of investment vehicles, into private hands. The absolutely disastrous results of that are still well and truly etched in the memories of every Western Australian—at least, every Western Australian who is over 30 years old. The WA Inc era was a shameful era of Labor Party politics in Western Australia, and it involved far too cosy relationships, including equity relationships through the Exim vehicle, with businesses in Western Australia.

We actually saw the outcomes of this in my home town of Pemberton. Pemberton is heavy soil country. It grows a lot of vegetables. There is fruit production and a lot of cattle production. We saw a massive shearing shed built in Pemberton, of all places. It was built by one of those who had gained largesse through the WA state government. A shearing shed in Pemberton! I'm trying to think of an eastern states equivalent example, but it probably won't come to me on the fly. This really is something that's out of place. It's economically crazy, and yet there we saw the way money was being used as a plaything for political and large business leaders' purposes. It was a very foolish use of taxpayers' money.

When governments get involved with business they are in an extremely difficult position. What happens if the business tanks? There's clearly a massive moral hazard. Does the government just let the business go under? Does it put more equity in to try and prop the business up, even though it knows it's failing? We get a situation where rather than being a silent shareholder—what if a large manufacturing business that takes one of these equity injections from the government is in a marginal seat? I know you spoke about this, Senator Scarr. What if one of these businesses is in a marginal seat and the minister for industry has the local Labor member banging on their door saying, 'You can't let this business go under; it'll cost me the seat'? Regardless of what the government's decisions is, it's going to be seen through a political lens. You risk corrupting the process, and perception is important in politics. We all know that. Everyone in this chamber knows that. Perception is important. Governments should not be taking equity shares in this way.

Sadly, the WA Inc situation is not the only case we can cite. There's also the Victorian Economic Development Corporation. I'm certainly not as close to that one; I don't know the history, but I'm sure some of my colleagues in this place do. Again, a state Labor government vehicle tried to pick winners and racked up $110 million of losses for the taxpayer. Manufacturing is difficult. Small and medium-sized business is difficult. There is no doubt about that. There is a lot of private investment that goes into those businesses, and a decent percentage of them will fail. It is a sad reality of economic life that, through the economic process, we see businesses that cannot compete. Holding equity in those businesses puts governments in a very, very dangerous position indeed. We should stay out of the market where at all possible.

The coalition's program in the last term of government was a grants program. Yes, there will be purists who argue against even those sorts of programs, and I do have some sympathy with that view. But, in a hands-off grants program, you are awarding money on the basis of a project's merit; there are effectively no strings attached. It's about trying to speed up an investment and advance a particular process, growing it from initial stages to the point where it can be taken to market, and there is an argument that that sort of funding from government can be a positive on the economy. There are arguments against that as well, but, when we get to the point of equity, we are entering very dangerous territory indeed. That is why I'm particularly strongly opposed to this bill. We've seen it before. We've seen government getting too close to business.

Senator Sheldon said that every submission to the inquiry was in support of this bill. Well, gee, guess what—business looks at free money and says yes. Is anyone remotely surprised by that fact? That does not mean it's good policy. We have hundreds of cases—I've named a couple of them, such as WA Inc and the Victorian Economic Development Corporation, and I'm sure Senator Scarr can give me hundreds of examples from Queensland—where these sorts of approaches have resulted in very negative outcomes for the taxpayer. Throughout history and throughout the western world, there are plenty of examples of where governments haven't been able to help themselves—trying to achieve a particular economic outcome and protect a particular industry, they have got their sticky fingers involved, and it has never—or very rarely—ended in positive territory for the taxpayers of the nation involved. That is why I remain extraordinarily concerned about this bill and I will certainly, very happily, vote against it.