Mr STONER (Oxley) [3.15 p.m.]: I move:

That this House notes the closure this week of the King Gee factory in Kempsey, one of its most significant employers.

I am pleased that the Government has agreed that this motion, regarding the closure of the King Gee
Page 886
factory in Kempsey this week, is a matter of urgency. For 26 years the King Gee factory was one of the largest employers in Kempsey, with more than 70 employees. A local economy such as the Macleay Valley, with Kempsey as its centre, so desperately needs jobs for such employees They are full-time permanent employees and their employment has a multiplying effect in the local economy. What they spend from their pay packets helps to stimulate small business and leads to the creation of many more jobs than simply the 70 at the King Gee factory.

This motion is extremely important because the Kempsey economy is in a desperate state. Kempsey and the Macleay area have experienced many business closures, including Mellow Yellow, a Sanitarium plant near Kempsey, which affected 15 jobs. The Government also axed 13 jobs from the catering and linen sections of Kempsey District Hospital late last year, which had a major impact on the economy of Kempsey.

Kempsey is a proud town which has been built on agriculture and rural industries. It was hanging on to permanent jobs in factories like King Gee, and with employers such as the Kempsey District Hospital. Unfortunately, the Government has also reviewed the Department of Land and Water Conservation and State Forests in Kempsey, which have experienced staff cuts. Now there is an appalling proposal to axe 3½ jobs from the Countrylink Travel Centre and the Kempsey Railway Station. Obviously that will contribute to a further winding back and will increase the number of unemployed in Kempsey.

In 1996 the unemployment statistics for the Oxley electorate, of which Kempsey is the major town, was 19 per cent and I have not seen an improvement in that figure. I do not have any recent figures, but there are no new employers, merely employers that have closed down. Unemployment in the Macleay would be easily double the State average and is up to four times that in Sydney. Unemployment among the significant Aboriginal community in Kempsey is estimated at more than 90 per cent. It is a desperate community.

The closure of the King Gee factory for economic reasons is an awful blow. Some of its operations have been moved off-shore and I certainly agree that the costs of doing business in the country are excessive. I do not blame the King Gee factory, which is owned by Sara Lee Apparel, for the decision to close when it was faced with payroll tax in excess of that of other State administrations and spiralling workers compensation costs. All of those things have an impact on the viability of businesses. When the tyranny of distance is added, together with costs of freight for supplies and the costs of transporting products to market, it is very difficult to do business in country towns such as Kempsey.

Mr Souris: Carr is killing jobs.

Mr STONER: Carr is killing jobs. Unfortunately, the policies of this Government are not addressing that situation, particularly in respect of the mid North Coast. In fact, the Government is adding fuel to the fire by cutting jobs from Government agencies. The result has been a spin-off in terms of a negative multiplier effect throughout the small business community, and there are many vacant tenancies in Kempsey.

Dairy deregulation is just around the corner. As most National Party members would be aware, the Macleay Valley is a major dairy producer. Over recent years its dairy industry has shrunk and is about to shrink further as a result of deregulation. So there is no good news in the policies of this Government for Kempsey and the Macleay. I searched the Governor’s Speech for some good news and found the post-2000 jobs plan. There was absolutely nothing for the mid North Coast, and particularly for Kempsey.

All the post-2000 jobs plan items were for Newcastle, Sydney and Wollongong. Under the plan, most of the funding will go to Sydney, although some will flow to Newcastle and Wollongong. That is the Government’s version of NSW. The only exception is the Tumut paper mill, but I do not think the Government can claim too much credit for that. It is arrogance for this Government to suggest that decentralisation of government agencies should go to marginal Labor seats such as Bathurst, Nowra, Wollongong, Maitland and Tweed. Decentralisation is a good policy but it needs to be implemented on a needs basis, and the need is on the mid North Coast where the levels of poverty and unemployment are far too high.

On a needs basis, the mid North Coast and Kempsey should be the first location to pilot the telecentres mentioned in the post-2000 jobs plan and to decentralise agencies. This motion should have the support of non-metropolitan Labor members of Parliament because they would be aware of the serious social issues that go hand in hand with high unemployment and poverty. Kempsey, unfortunately, is experiencing far too much unemployment and poverty. As the Minister for Police would be aware the crime level is far too high and drug and alcohol
Page 887
abuse is a major problem. Honourable members would remember the syringe attack on Kempsey schoolchildren late last year by a young person.

Kempsey is also experiencing the problems of child neglect and domestic abuse that are associated with unemployment. The King Gee factory closure is certainly bad news for Kempsey and the Macleay region. I hope that the disaffected, breakaway faction of non-metropolitan Labor members of Parliament will support the plan to give the Macleay and Kempsey region priority under the post-2000 jobs plan. In fact, the region needs help pre-2000. I am glad the Minister for Regional Development, and Minister for Rural Affairs is in the Chamber. The Department of State and Regional Development must assist the Macleay Valley Economic Development Trust with projects to create and assist employment and encourage new enterprises.

A line of Slim Dusty clothing has been suggested. Slim Dusty was born in the upper Macleay region. The Kempsey Shire Council has proposed a Slim Dusty museum, and is working hard to create employment opportunities and boost the local economy because jobs are critical. I call upon the Premier to stop the plan to axe jobs from Countrylink and Kempsey railway station. Wauchope is also under the knife!

Honourable members have heard about country social and economic impact statements, but clearly they are non-existent. Such a study would reveal the extent of the problem in Kempsey, and other country towns in my electorate. Instead of giving attention to Sydney, Newcastle, Wollongong and the marginal Labor seats that I mentioned, the first priority in any action contemplated by the Department of State and Regional Development under the post-2000 plan must be given to Kempsey, the Macleay Valley and the Oxley electorate.

Mr WOODS (Clarence - Minister for Local Government, Minister for Regional Development, and Minister for Rural Affairs [3.25 p.m.]: Of course the aim of this Government is to increase economic growth in country and rural areas, but it is a huge commitment. While the Government does not diminish the difficulties of achieving that economic growth, it achieved a lot during the last term and its objective is to achieve a lot more. The King Gee company has operated in Kempsey for 26 years and currently manufactures overalls for the domestic market. The company has advised that competition, together with a reduction in demand for that type of product, led to its decision, in light of increasing imports. The factory’s products will now be manufactured partly in Wollongong and partly in Fiji.

The Government cannot reverse the company’s decision but it can work with the community, the council and local business to reposition the area’s economic base. There is a need to focus on new opportunities for future economic growth and job creation in Kempsey and the Macleay Valley, but also in many other country New South Wales areas. In February this year I wrote to the council inviting it to make a case for Kempsey’s inclusion in the regional economic transition scheme. The Government has recently received the council’s response, and I will use every endeavour to make a decision on that response as soon as practicable.

For the last 12 months the Government has been pursuing a number of other initiatives in the Kempsey area, including the commitment for funding for the Kempsey economic renewal program. That program focuses on the establishment of new business ventures and job opportunities. It has already produced 25 direct jobs and I hope that more will follow. The Government has also committed funding of $40,000 over the next three years for the Kempsey Main Street program and is providing for various industry and community initiatives.

The Government is keen to assist the Kempsey community to find new economic opportunities, as it is doing in so many other areas. I will continue to monitor progress and make every effort to secure the future of the Kempsey community. Kempsey residents deserve, like their city cousins, opportunities for a job, as does everyone throughout New South Wales. The Government will endeavour to meet that goal.

It must be made clear that the closure of the King Gee factory is strictly the result of the Howard Government’s policies. These policies are driven by an economic rationalist ideology, the interpretation of which commonly results in factory closures and unemployment. The Federal Government has little regard for the effects of its policies on regional and rural communities. Only recently the Federal Leader of the National Party and Deputy Prime Minister, John Anderson, was spouting the virtues of market forces being able to drive economic growth and employment in isolation. Of course they cannot and this Government rejects that ideology. He told ABC news on 2 December:

Our role is to draw us alongside local communities rather than try to impose development on them. That defies reality, that isn’t supported by local leadership, and somehow or other denies market forces.

In other words, if the market forces are not saying it should happen, he says it should not happen. Of
Page 888
course, that market force ideology fails country New South Wales. Opposition members are adherents to that ideology, which is a pretty miserable and lazy response to the needs of country people. In contrast, this Government knows that strategic and targeted intervention is necessary to ensure that people in country areas receive their fair share of jobs and services. This Government’s focus is on jobs and on economic growth across the State. Its directions statement, which the Premier launched in 1998, demonstrates the difference between its belief, its philosophy and its ideology compared with those of the Opposition. The Government has a belief but the Opposition has no belief and no ideology.

The Leader of the National Party said, "I would encourage people to vote for people who do not represent any particular party ideology." Do National Party member believe in nothing or was he asking people to vote for somebody else? Our ideology represents a new and strong belief in the value of country and regional New South Wales to generate prosperity in this State and in the nation as a whole. We must believe in it to make it work.

Policies and strategies cannot be drawn from the complete void of belief that the Leader of the National Party says the Opposition has. Clearly, without this belief the market will not deliver jobs and growth to regional areas. A market system which concentrates heavily on major centres cannot be depended on to deliver jobs in country areas. That cannot be made to work. If Opposition members have a belief in anything they should talk to John Anderson and tell him where he is wrong. The other day the media branded them as lazy.

While Victoria and Queensland recorded unemployment levels of 7.9 per cent and 8.3 per cent, New South Wales recorded an unemployment rate of 6.4 per cent. We do not underestimate the job ahead in producing those figures right across New South Wales, and we do not resile from the effort needed to make it happen. We will produce the policies and the strategies to make it happen. The tangible results of the Government’s sensible and practical policy decisions are being implemented. We all understand that having strong growth in regional centres is good for those centres and the people living in them. But it is also in the State and national interest. It is good for all of us.

Our belief has achieved tangible success. Our direction statement and the policies that flow from it enable the flexibility to recognise the strengths and weaknesses of individual centres. What can work in, say, Grafton, will not work in another area. That is why we need a unique approach, to treat each place differently. Where the opportunities are different and the weaknesses and strengths are different they must be looked at individually. That is how we will deal with Kempsey.

In the Government’s first term the employment growth rate in country New South Wales surpassed that of the greater Sydney metropolitan area - Sydney, Newcastle, Wollongong and the Central Coast - a different situation from when the Coalition was in office. With direct, targeted government assistance, as well as the facilitating of business negotiations, $1 billion has been pumped into regional New South Wales. That will provide 10,000 full-time new jobs in regional New South Wales. We have also helped businesses and in some cases whole towns to improve their outlook in the event of business closures.

Although there is growth in country New South Wales it is not necessarily across the board and we need to put our efforts into those areas that are suffering from low growth. If there is growth in one area, that does not necessarily mean that there is growth in other areas. Therefore, we have to be strategic and interventionist when it leads to real growth and investment in the future. We recently announced funding of $250,000 to help the township of Eden seek new opportunities in the light of the Heinz-Watties cannery closure. It is part of the regional economic transition scheme, which is worth $5 million per annum for the next two years. Kempsey Shire Council has written to ask for inclusion under the scheme and we are considering its representations. In the scheme’s first year, in 1998-99, it helped centres such as Lithgow. Towns to be assisted in 1999-2000 include Eden, Broken Hill, Cootamundra, Gunnedah, Bombala, Goulburn and Aberdeen.

We do not have a lazy approach to policy development. Our actions are based on our policies and strategies, the Regional Economic Transition Scheme, the Lifestyle program and all the programs that are designed to help people in country New South Wales, help business, expand economic growth and, to some degree, also encourage people to have higher morale, to have hope in the future.

The Government is not about despair and running country people down as Opposition members are doing. The people of Victoria looked at what was happening in regional New South Wales, compared it to what Kennett was doing in Victoria - and what Opposition members would do to regional New South Wales - and voted accordingly. National Party members are a lazy, lousy, miserable mob. [Time expired.]

Page 889

Mr OAKESHOTT (Port Macquarie) [3.35 p.m]: The Minister for Local Government, Minister for Regional Development, and Minister for Rural Affairs said that the Government does not run anyone down, but in his concluding comments he had a fair crack at the National Party. If ever a government has talked the talk but not walked the walk, we are looking at it. The Minister just said that the Government believes in intervention, yet it will not provide any intervention or subsidy program for the King Gee factory in Kempsey, which will close by the end of the week.

It was country day during question time today. To some degree it was a reaction to what happened in Victoria. For some reason the Government has suddenly woken up. This is the first test for Country Labor, the new, breakaway, gimmicky faction. Is it going to do anything about payroll tax and workers compensation? Will it intervene to support a regional business or is it going to be teflon coated, to put up smoke and mirrors? Will it continue to talk the talk but not walk the walk? There are cutbacks across the board in regional New South Wales, in businesses such as the Midco abattoir in Macksville, which employed more than 150 people and was a good regional business, and the Government did nothing to prevent it.

A week or two ago the Premier brought a hard hat into the Chamber and claimed that the Government was doing wonderful things for New South Wales. Where is his hard hat now? We are talking about families and their livelihoods. Local communities are being hurt by the loss of businesses in regional New South Wales. Jobs are going out of New South Wales. This is the test of the Government, right here and right now. The Minister just said that he is opposed to economic rationalism. That is fine by us. The Minister was talking about subsidies and interventions. They are fine by us. Where is the money? Show us the money. There cannot be a subsidy program without any money to back it up. That claim is a smoke and mirrors trick.

It is a disgrace that businesses throughout regional New South Wales are closing, as with King Gee in Kempsey. There are examples in every electorate. Hot Tuna in my electorate is one. There is York refrigeration in Coffs Harbour. Do Country Labor members have any examples in their electorates? We do not want to talk about regulating the size of beer bottles or about petrol prices without anything being delivered. It was Country Labor members who said that they would fix the problem with petrol prices. If Country Labor wants to do something for regional New South Wales it should do something about payroll tax. If the Labor Party wants to do something real, if it wants to be relevant to what is happening in regional New South Wales, it should do something about workers compensation.

Mr Newell: You put it on.

Mr OAKESHOTT: The honourable member for Tweed interjects that we put it on. But it is he and his colleagues opposite, not the Opposition, who have their hands on the levers of government. Why do they not do something about it? If they have a problem with it, they should deal with it and fix it.

Mr Orkopoulos: We have reduced payroll tax.

Mr OAKESHOTT: You have extended it. You should speak to your Treasurer. He has not delivered on what he promised. The Treasurer promised that he was going to hack into payroll tax as heavily as he could. He also said that he wanted to reduce this State’s payroll tax rate to the Queensland payroll tax level very soon. The Labor Party is not delivering, and King Gee is falling apart. That is a complete and utter disgrace for the Government.

Ms NORI (Port Jackson - Minister for Small Business, and Minister for Tourism) [3.40 p.m.]: I have a prepared speech that outlines many of the programs and policies that this Government has introduced to help many small businesses and those in regional New South Wales. However, I have been distracted somewhat by the contribution of the honourable member for Port Macquarie, who claims that this Government ought to do something about payroll tax. He said that if this Government were interested in creating employment we would do something about payroll tax. It seems that the honourable member for Port Macquarie was not listening during the Budget Speech when the Treasurer announced that, effective from 1 July 1999, the general rate of payroll tax would fall from 6.85 per cent to 6.4 per cent. Of course, that does not take into account the fact that earlier in our first term we raised the payroll tax-free threshold from $550,000 to $600,000. That initiative alone provided $110 million in tax savings to date.

Since I have been distracted from my speech because of the contribution of the honourable member for Port Macquarie, I take this opportunity to assure him that if he had been reading the newspapers he would be aware of the fact that I was able to announce recently that over the last five years the number of small businesses in this State has grown by almost 10 per cent. That is three times the rate in Victoria and twice the rate in Queensland.
Page 890
I point out to the honourable member that the portfolio for which I am responsible is doing extremely well.

The closure of King Gee in Kempsey is unfortunate. Obviously, there are always impacts when a closure of this nature takes place in a regional town. We acknowledge that many of these impacts are inevitable, but it is important that they be anticipated and planned for, and that measures be introduced to assist these communities to rebuild their economies. The Carr Government is very mindful of this. In our 4½ years in office we have worked to ensure that rural and regional communities remain vibrant and continue to grow.

In light of the closure of the King Gee factory in Kempsey I have asked the small business development division of the Department of State and Regional Development to see what specific small business assistance can be applied to Kempsey. We have also supported regional New South Wales, including Kempsey, through the Government’s regional tourism strategy. The Government’s commitment to regional tourism stands at a record $8 million for 1999-2000.

Kempsey, which is in the Northern Rivers tropical New South Wales tourism region, has received almost $1 million from this Government to spend on tourism marketing. In addition, $90,000 has been provided to the regional tourism organisation. I have asked Tourism New South Wales to meet with tourism operators in Kempsey to see what further assistance is possible. I can also announce that the Department of Fair Trading will be sending a departmental officer and counsellor to assist affected workers with financial advice.

As members opposite should be aware, small business underpins the growth of the New South Wales economy and is critical for the success of rural and regional economies. Over the last decade small businesses have been the major source of job creation in Australia. The maintenance and growth of the small business sector is especially important to regional communities, which are experiencing structural and demographic changes.

The Government has put in place a number of initiatives aimed at supporting small businesses located in rural and regional areas through the small business development budget. These include the Women in Business mentoring program, which links emerging female entrepreneurs and experienced business owners to facilitate knowledge sharing and boost business and employment growth. The program has been extremely successful, with a number of courses and a number of graduations coming to fruition. We are very pleased that the program has now been extended to include the Hunter, the Central Coast, New England, the north-west and the Northern Rivers region.

In 1999-2000 the Department of State and Regional Development will establish business mentoring and free workshops for businesswomen in regional and rural New South Wales, in locations including the Illawarra, Wagga Wagga, Albury and Dubbo. The program will be flexible to meet the needs of the local community and will be delivered in co-operation with local providers. We also have a support system of 48 business enterprise centres, the cost of which is approximately $4 million, spread throughout regional and metropolitan New South Wales but mostly in the regions.

Mr GEORGE (Lismore) [3.45 p.m.]: This debate should not be solely about King Gee closing at Kempsey. This is about keeping businesses in New South Wales. That is what we are on about. We are losing too many businesses to other States and countries. We need to address the issues. The honourable member for Tweed interjects to say, "What would you do?" I have said in this House, as other members have said, that workers compensation and payroll tax are just two of the issues that honourable members of this House need to address. The Minister for Local Government, Minister for Regional Development, and Minister for Rural Affairs was critical of the Opposition and said that we are lazy. We are not lazy; we are trying to keep these businesses not only in our electorates but, just as importantly, throughout this State.

Payroll tax and workers compensation are just two of the problems that all businesses face, regardless of what electorate or what part of the State they are in. I have been involved with rural industries, as many members would be aware. In the New South Wales meat industry alone, in round figures New South Wales has the same number of workers as Queensland. New South Wales has the same number of plants as Queensland, and we have the same number of workers compensation claims. The premium in New South Wales is $18 million; the premium in Queensland is $11 million for the same coverage of workers compensation. I invite members opposite to suggest how that is helping businesses in New South Wales. Members opposite want the recipe to fix up the problem, so we will give it to them.

[Interruption]

I appreciate the support of my colleagues.

Page 891

Mr Orkopoulos: We are not interjecting.

Mr GEORGE: No, because you cannot interject. It is a problem we are all faced with, regardless of what side of the fence we are on. We need to address the issue. I need the support of the honourable member for Tweed, as part of the Country Labor team, to address the issues facing the Northern Rivers region. However, that is not the only problem we have. We also have the problems with the forestry in the north of the State. It is good to see the honourable member for Tamworth in this Chamber. The honourable member led a fight in this House in trying to combat payroll tax in this State. Unfortunately, both sides of the House refused to support him. We will get this problem fixed up, if it is the last thing we do.

[Interruption]

The honourable member for Tweed can interject as much as he likes. But he realises what the forestry cutbacks have done to the northern part of the State as well. I need his support. We need to address those issues, because again they are hitting regional and country areas. We cannot afford to lose jobs from those areas. We must keep fighting on.

Given that the King Gee company has closed, we need to try to get behind the Kempsey community; we need to offer it support. It is good to hear the Minister for Small Business, and Minister for Tourism say that she will provide support to those people. I am sure the honourable member for Oxley will take up that generous offer and ensure that support and initiatives will be put in place in the electorate of Oxley to combat these problems. Another problem that faces my electorate, and I am sure other regional areas, relates to dairy deregulation.

Mr Black: Ask Ian Armstrong about that. Who deregulated it and took the 2¢ off?

Mr GEORGE: Who will deregulate the dairy industry in this State from 1 July next year? I remind members on the Government benches that one cannot drive a car forward while it is in reverse gear. The sooner they realise that and begin to worry about what will happen in the future the better everyone will be. The problems must be attacked now. The reality is that deregulation of the industry will commence on 1 July next year. That will have a major impact on regional and rural New South Wales. That problem must be faced. Members of the Municipal Employees Union [MEU] demonstrated outside the Parliament recently, but unfortunately the honourable member for Murray-Darling was not here.

Mr Martin: I was here.

Mr GEORGE: The honourable member was there, and National Party members were out there with them. This closure will have a devastating effect on jobs in rural areas. That is what I am trying to push for: jobs for rural New South Wales.

Mr STONER (Oxley) [3.50 p.m.], in reply: I have had the benefit of listening to the response from two Government Ministers, the Minister for Regional Development and the Minister for Small Business. The Minister for Regional Development spoke about the regional economic transition scheme. I will applaud that scheme if it results in the Kempsey Shire Council receiving financial assistance. If that happens, I will say bravo and thank the Minister. At least that would be one item of concrete assistance for the Kempsey-Macleay region. The Minister spoke about the Macleay economic renewal project and said it would generate 25 direct jobs.

I would like to see the details of that proposal. It is a new one to me. In my understanding the economic renewal project provides jobs only for a few consultants and further studies, but will result in no concrete jobs or full-time pay packets for permanent employees. It allows for academics wafting around the place doing nice warm and fuzzy things. If the project generates 25 permanent jobs, I will support the Minister; but I doubt that will be the case. Perhaps the Minister, who is not sure where the electorate of Clarence is located, is not too sure about the figures either. The Minister for Small Business, and Minister for Tourism spoke about $1 million being made available for Kempsey tourism. I would like the Minister to give me some details about that, because it is new to me also.

Kempsey is an inland town, not a tourist centre. It will be bypassed with the rerouting of the Pacific Highway. Tourism is not the be-all and end-all for Macleay's employment problems. Full-time permanent jobs must be made available. Neither of the Ministers mentioned anything about Countrylink and the plans to slash jobs from Kempsey station and the travel centre. Actions speak louder than words. The Government has backed down on this issue before and wanted to cut those jobs. The Minister for Transport backed down. Just before the election he said that the Government would not reduce those services and take away jobs. After the election it is on again.

The Government has known about the closure of the King Gee factory since the end of June but has not put forward one concrete strategy to address the problem. I moved this urgent motion today
Page 892
because the factory will be gone by the end of the week. The Minister for Regional Development criticised the Howard Government. The Federal Government has delivered low interest rates and cheaper diesel for businesses in the country. It should be applauded for those initiatives. However, the New South Wales Government has workers compensation premiums that are too high and payroll tax that is much higher than in other States. That is the result of another broken promise by the Treasurer.

The New South Wales industrial relations policy forces businesses offshore. How will businesses be able to stay in country towns such as Kempsey? The Minister referred also to economic rationalism. He should know. What about the centralisation of linen and catering services from Kempsey hospital, one going to Grafton and the other to Tamworth? That is economic rationalism at its worst. I do not know of any more devastating economic rationalist policy than compulsory competitive tendering. That will devastate employment in country towns. The Minister for Local Government and the Minister for Transport are implementing that policy - another broken promise.

In regard to Countrylink, the Government is considering reducing services on stations. Little old ladies will not have the security of knowing that station attendants are present at night-time to assist them with their luggage on darkened stations. The reduction of jobs in country TAFE colleges is another example of economic rationalism. That is why the unions are talking to National Party members about these reductions in jobs. They are supplying us with information. The Australian Services Union and the MEU have objected to the economic rationalist policies of the New South Wales Government.

The National Party is the true country party, because its members care for people, they care for the bush and they care for jobs. That is why the unions are coming to National Party members. They know where they will get true representation for the bush. All we heard from the Ministers were platitudes. Actions speak louder than words. The job cuts in Kempsey District Hospital, Countrylink, the Department of Land and Water Conservation and State Forests are the actions of - [Time expired.]

Motion agreed to.