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Wednesday, 30 November 1983
Page: 3033


Mr DUFFY (Minister for Communications and Acting Minister Assisting the Minister for Industry and Commerce)(10.57) —I move:

That the Bill be now read a second time.

This Bill is the second of three Bills designed to give effect to the Government 's decision, announced on 11 August 1983, to provide an assistance program for the Australian steel industry under the steel industry plan. The Government's policy for the steel industry and details of the steel industry plan were outlined in my second reading speech introducing the Steel Industry Authority Bill 1983. This Bill forms part of the bounty package to be provided under the plan.

The bounties in the Bill are intended to assist the production of certain quenched and tempered steel plate, certain steel pipe and tube, and certain cold rolled steel sheet products. Bounty payments will be made to the producers of these products on the basis of a percentage of the sales value of prescribed hot rolled steel strip and plate used as inputs in bountiable production. The bounties will operate on a sliding scale providing for maximum assistance to be given at low production levels. This will provide assistance when producers most need it, and avoid large government outlays in times of buoyant market conditions. The bounties will assist the Australian industry in those areas which have recently been most vulnerable to import competition and the benefits will also flow back to Australian producers of the prescribed types of hot rolled steel strip and plate.

Bounty will be paid on quenched and tempered steel plate as a percentage of the value of the prescribed plate feed used during a quarter in production of those products. The maximum bounty rate of 20 per cent will be paid where the annualised industry use of the prescribed plate feed, calculated for a quarter, is 5,000 tonnes or less. The bounty rate will be progressively reduced as industry output increases. No bounty is payable where the annualised industry use during a quarter is in excess of 8,800 tonnes. Bounty will also be payable on steel pipe and tube as a percentage of the value of the prescribed plate and strip used during a quarter in production of the products. The maximum bounty rate of 17 per cent will be paid where the annualised industry tonnage of the prescribed plate and strip, calculated for the quarter, is 350,000 tonnes or less. This bounty will be progressively reduced as industry output increases. No bounty is payable where the annualised industry use during a quarter is in excess of 500,000 tonnes.

Finally, bounty will be payable on cold rolled steel sheet as a percentage of the value of the prescribed strip used during a quarter in production of the products. The maximum bounty rate will be paid where the annualised industry tonnage of the prescribed strip, calculated for a quarter, is 700,000 tonnes or less. This bounty will also be progressively reduced as industry output increases. No bounty is payable where the annualised industry use during a quarter is in excess of 900,000 tonnes. The applicable bounty rates are set out in the Schedules to the Bill. The bounty schemes under the steel industry plan will commence on 1 January 1984 and will run for a period of five years. It is proposed that at the end of the fourth year a review will be undertaken and a decision made on whether the plan should be extended.

The amount of bounty is to be limited in the first year of the steel industry plan to $600,000 in respect of quenched and tempered plate, $22m in respect of pipe and tube and $40m in respect of cold rolled sheet. These limits will be adjusted in later years in accordance with movements in domestic steel prices under the plan. However, the actual amount of bounty payable in any year will depend upon the level of activity in the domestic industry. In view of recent increases in efficiency and activity in the industry, it is likely that the maximum available amount of bounty will not be utilised in the first year of its operation. I commend the Bill to the House.

Debate (on motion by Mr McVeigh) adjourned.