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Sugar capitalisation grants justified

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Shadow mister for Industry and Commerce



The Coalition's plan to pay canegrowers five annual tariff equivalent payments revealed quite clearly, the normally hidden cost to consumers of tariff protection, the Shadow Minister for Industry and Commerce Ian McLachlan said today.

'Those who suggest that sugar producers should not receive capital grants to adjust for reductions in assistance should consider similar forms of assistance already being paid to other industries.

'For example, the car and car parts industries, which still receives tariff assistance of 32.5 per cent, a cost to consumers of between $3,500 and $4000 per car, also received assistance of $700 million in 1989 through the export facilitation scheme and duty free imports.

'The textile, clothing and footwear industries which are still our most highly protected industries with tariffs of over 40 per cent, in 1991/92 received the same sort of assistance totalling $27 million for import credits.'

'In fact, the TCF industries exported products worth $228 million, entitling them to $32 million in credits, and used $27 million of them.

Export facilitation, duty free imports and import credits are schemes by which Australian companies are exempt from normal import taxes in return for their commitment to export either parts or products.

'It is important to remember that these figures - $700 million for cars in 1989, and $27 million for TCF in 1991/2 represent income foregone to the government and therefore are a subsidy paid by taxpayers. -

'In fact, the Industries Commission annual report shows that the cost to consumers of all forms of assistance in the passenger motor vehicle and textile clothing and footwear industries in 1990/91 was $5.43 billion dollars.

'Amongst other things, the Coalition's package to the sugar industry has identified the cost to the consumer of tariff protection to selected industries.

'Our proposal to pay the growers a tariff capitalisation grant worth $84 million means that the whole community can now see quite clearly the cost of selected tariff assistance, which in the ease of the sugar industry will be reduced to negligible levels or 5 per cent on 1 July 1995 Mr McLachlan said. COMMONWEALTH Further information: PARLIAMENTARY LIBRARY

Ian McLachlan MICAH

Shadow Minister for Industry and Commerce Telephone: 08 2377140. 16 February, 1993.