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Tuesday, 9 September 2003
Page: 14638


Senator IAN CAMPBELL (Parliamentary Secretary to the Treasurer) (3:55 PM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

ACIS ADMINISTRATION AMENDMENT BILL 2003

The ACIS Administration Amendment Bill 2003 is a bill to amend the ACIS Administration Act 1999.

This bill implements the Government's post-2005 assistance package for the Australian automotive industry. The package will deliver assistance to the value of $4.2 billion to the industry by extending the Automotive Competitiveness and Investment Scheme to 2015.

The post-2005 Automotive Competitiveness and Investment Scheme will assist the industry to complete its transition to a genuinely world competitive, self-reliant industry. This will be the largest, and the last, assistance package provided to the industry.

Passage of this bill will give Australian car and component manufacturers unprecedented security. The bill will provide more than a decade of policy certainty, allowing firms to develop their businesses in a stable environment and to prepare for the end of industry specific support on 31 December 2015.

The Australian industry is well-placed to achieve sustainable growth. A judicious combination of direct assistance and tariff reductions has transformed the industry.

The gradual opening of the local market has spurred a revolution in the quality and competitiveness of Australian products. These gains are most obvious in the growth of our automotive exports.

Since 1996, Australia's vehicle exports have trebled to be worth more than $3 billion. At the same time, production has increased by more than 35,000 vehicles per year.

The Government's policy for assistance beyond 2005 continues to combine assistance and tariff reform. On 1 January 2005, tariffs for passenger motor vehicles and related components are scheduled to fall from 15% to 10%.

A companion bill to this bill provides for similar tariff reductions in 2010. Tariffs on passenger motor vehicles and related components will remain at 10% until 1 January 2010, when they will be reduced to the general manufacturing tariff level of 5%.

In 2008, the Productivity Commission will conduct an inquiry into the scheduled 2010 tariff reductions. The industry has raised concerns about overseas market access; the Commission will be asked inter alia to report on this issue.

However, I am confident that the outlook for the industry is very promising and its projections for strong, continuing export growth will be fulfilled. Market access should improve as a result of the World Trade Organisation's Doha Round and the Government's negotiation of bilateral trade agreements such as the Free Trade Agreement with the United States.

The extended Automotive Competitiveness and Investment Scheme will include two important new features.

At the request of industry, the Government has decided to distribute program funds into two pools. Motor vehicle producers will be allocated a 55 per cent share of these funds; component producers and other participants in the scheme will be allocated the residue.

This decision ensures even greater certainty for the industry and has been implemented with effect from the first quarter of 2003.

Another important initiative will be the establishment in 2005 of a $150 million Research and Development Fund for motor vehicle producers. Funding will be drawn from the motor vehicle producer's pool of the Automotive Competitiveness and Investment Scheme.

The Fund will offer competitive grants to support significant new research and development. Unallocated monies will be returned to the motor vehicles producers' pool.

The bill also provides for the administrative detail of the Automotive Competitiveness and Investment Scheme to be set out in subsidiary legislation, in the form of Regulations and Ministerial guidelines.

In line with the Government's policy to have open and transparent process concerning the allocation of public monies, the bill clarifies the disclosure of information requirements concerning participants in the Automotive Competitiveness and Investment Scheme.

Passage of this bill will mark a historic step in the evolution of the Australian automotive industry. For the first time, the industry will be assured of a decade of generous public support; at the end of this period, industry specific assistance will end.

In the mid-1970s Australia had tariffs on automotive imports of up to 57.5 per cent, in addition there were import quotas restricting imports to 20 per cent of the market. Import quotas are long gone and, at the end of the extended ACIS, tariffs will be only 5 per cent. Australian companies have demonstrated that they are able to prosper in an increasingly free market, becoming more innovative and competitive.

The next thirteen years represents a tremendous opportunity for the Australian industry to secure its future.

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CUSTOMS TARIFF AMENDMENT (ACIS) BILL 2003

The Customs Tariff Amendment (ACIS) Bill 2003 contains amendments to the Customs Tariff Act 1995.

Those amendments are complementary to, and cognate with, amendments contained in the ACIS Administration Amendment Bill 2003. Together, these Bills extend the provisions of the Automotive Competitiveness and Investment Scheme beyond its original finishing date in 2005.

Customs duty rates for passenger motor vehicles and certain components will reduce from 15% to 10% on 1 January 2005. These rates will be maintained until 1 January 2010 when the Customs Tariff Amendment (ACIS) Bill 2003 will provide for the further reduction of duty rates for passenger motor vehicles and certain components from 10% to 5%.

The enactment of the post-2010 duty rates at this time provides transparency and certainty for automotive and component manufacturers enabling sufficient time for planning prior to the scheduled reduction in 2010.

I commend the bill.

Debate (on motion by Senator Mackay) adjourned.