14/01/2009 - 22:00

Base industry policy a priority for WA

14/01/2009 - 22:00

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This is an edited version of Colin Barnett's maiden speech to the WA Parliament on September 12 1990.

Base industry policy a priority for WA

MR Speaker, I join this parliament with a background in economics and have been, for the last five years, the executive director of the Western Australian Chamber of Commerce and Industry Inc.

I count the greatest achievement during my time with the Chamber of Commerce as being the public record of that organisation in support of free enterprise and free market principles.

Indeed it was the determination to be true to principle more than anything else that allowed the chamber to grow in both stature and credibility.

I might add that the chamber was not free from criticism, from both within and without, for taking strong public stands in support of such issues as the deregulation of retail trading hours, the right of employers and their employees to a free choice of fund with respect to occupational superannuation, and the case for a separate central city council.

My pledge to this parliament is that I shall continue to remain true to the principles of free enterprise and the free market and to work in support of the rights of the individual.

I hope that over the course of my parliamentary career I might make a positive contribution to the economic and social development of Western Australia.

The Western Australian economy is both small and unique.

The disadvantages of geographic isolation and a limited local market are countered by the advantages of an abundant natural resource endowment and a very high quality of life.

Our economy is exposed to the uncertainties of world markets and must operate within a macro-economic environment that is largely determined by policies set at a national level.

Self-determination is further limited by the disturbing trend of a loss of local control over local enterprises and the generally low level of responsibility delegated to the state managers of national organisations.

In spite of these constraints, I contend that our economic destiny lies within our own hands.

However, we must accept the reality that WA is a small regional economy.

Our population is only 1.6 million people. We cannot hope to be all things to all people.

We cannot hope to be a small-scale version of the large industrialised economies of the world.

In the increasingly competitive world of the 1990s, we must recognise that our economic success and, therefore, living standards, will depend upon our ability to specialise and thereby maximise our comparative advantages.

Our future, both economic and social, depends upon our ability to do a limited number of things and to do them superbly.

In a visit to the US in 1987, I was very much impressed by the success of different regions in setting a clear path for their economic development.

There were no master plans or legislative decrees, though there were common objectives shared by both the private and public sectors.

Examples include the marriage of old money and intellectual resources to make Boston a booming centre of new technology; the deliberate attraction of a naval presence as the mainstay of San Diego's economy; and the more recent moves by Houston to become the centre of the space industry into the next century.

For WA, it is obvious to all that the greatest areas of comparative advantage are in mining and agriculture.

In these industries, world -lass status has already been achieved.

I suggest that there is the opportunity to develop a third economic base in marine-related industries.

There is a synergy waiting to be developed on the existing fishing, shipbuilding and offshore oil and gas industries.

To these may be added the growing naval presence under the two-ocean defence policy and the tourism and recreational opportunities presented by a 12,500-kilometre coastline.

What is lacking is a base industry policy.

Such a policy must have as its centrepiece a commitment to specialise in those export activities where our comparative advantage is greatest.

WA simply does not have the population to generate economic growth from within.

It is only through exporting that we can bring income into the state.

The circulation of this income throughout the community provides in turn the opportunities for what should be a flourishing small business sector.

The best opportunities for manufacturing and service industries will be found in providing inputs to the base industries and in adding value to the product of those industries.

In this context, there is no more critical element to a base industry policy and indeed to the goal of value added processing than a reliable and competitively priced power supply.

In comparison, all other industrial development policies pale into insignificance.

For small to medium sized businesses to feed successfully off the economic base, it is essential that they be freed from the unnecessary burdens of over-regulation and over-taxation.

Nowhere is this clearer than with respect to employment.

It is as though society is intent on making it even more difficult for small businesses to actually employ people.

As an aside, I am at a loss to understand why the progress of labour market deregulation has been so slow.

The much-heralded process of award restructuring has, with a few notable exceptions, been a failure.

I see no equity and certainly no comparative wage justice in a system, which, for example, allows a nurse working over a weekend to earn a comparable sum of money to a colleague working a five-day week.

To adopt a base industry policy is not a riskless strategy.

It is one, however, where the potential benefits are large relative to the risks.

For WA, the risks of specialisation are far less than those faced by other Australian states and indeed by most other regional economies around the globe.

The risks are further minimised by what should be a supportive expansion in the services sector as WA benefits from the rapid growth of wealth and disposable income within the Asia-Pacific region.

Tourism, education, health care and business services are the obvious areas of service sector growth.

The concept of a base industry policy is one that is almost self-evident and therefore one with which it is quite easy to feel comfortable.

However, the true test of such a strategy of economic development is the commitment to provide the necessary infrastructure, whether it be publicly or privately funded, and the discipline to avoid being too easily distracted by apparent opportunities outside that strategy.

It is equally necessary that a positive investment climate be maintained and that business and the wider community can have confidence in the direction and continuity of government policy.

It is only with a strong economy that the people of WA can hope to realise and sustain their aspirations in such diverse areas as education, environmental protection, health care and housing.

n The full speech can be found at http://www.parliament.wa.gov.au/web/newwebparl.nsf/iframewebpages/Members+-+Current

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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