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Thursday, 13 May 1965

Senator ANDERSON (New South Wales) . - 1 move -

That the Bill be now read a second time.

Recently, while introducing Customs Tariff Proposals relating to acetyl products in another place, the Minister for Housing (Mr. Bury) indicated that the Government had decided, on the recommendation of the Tariff Board, to continue bounty payments on the production of rayon grade cellulose acetate flake for use in the manufacture of cellulose acetate yarn. The period of operation of the Cellulose Acetate Flake Bounty Act .1956-64 is to be extended for a further three years, effective from 19th March 1965 and the Bill now before the Senate is to implement this decision. Cellulose acetate fluke is produced in conjunction with other acetyl products such as acetic acid and cellulose acetate moulding powders, using ethyl alcohol, a by-product of the sugar industry, as a raw material.

The Government considers that local production of acetyl products, taken collectively, is definitely worthy of encouragement. Tariff assistance is considered the best method in the case of all these products except cellulose acetate flake where a bounty is regarded as more appropriate. This is based on the fact that protective duties would lead to increased costs of acetate yarn, which is manufactured from cellulose acetate flake, and could cause some diversion of demand to viscose yarn. The Government has also decided, on the recommendation of the Tariff Board, to reduce the rate of bounty from 7d. per lb. to 6d. per lb., but to increase the annual limit of bounty payable from £90,000 to £112,000. These changes are designed to coincide with the imposition of revised rates of duty, and apply as from 19th March 1965.

The revised rate and limit of bounty have been fixed, bearing in mind current annual demand for the cellulose acetate flake, which approximates 2,000 tons. The rate of 6d. per lb., and a maximum total payment in any- one year of £112,000, are considered necessary to support the ex-factory price for rayon grade cellulose acetate flake of 37. 5d. per lb. which continues to be appropriate having regard to prices overseas.

A provision for delegation of powers by the Minister or the Comptroller-General has been inserted in this Bill. This is the current practice followed with other bounty legislation. The only recipient of this bounty at present is C.S.R. Chemicals Pty. Ltd., of Rhodes, New South Wales. This, company has sustained a substantial level- of investment and employment and has continued its successful efforts to reduce costs and increase productivity. A product balance in keeping with market requirements has been maintained. Further assistance to the industry is considered warranted. As I have pointed out, if this is to be so, it is necessary that the bounty on cellulose acetate flake be continued. I commend the Bill to honorable senators.

Debate (on motion by Senator Benn) adjourned.

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