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Shipbuilding industry competitiveness.

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Minister for Industry, Science and Resources

Tuesday 11 May 1999



Shipbuilding Industry Competitiveness


The Budget has allocated $68.8 million to encourage the world-leading Australian shipbuilding industry to b e innovative and internationally competitive.


The measures fulfil the Governments election promise to facilitate the development of the industry.


The package includes extension of the shipbuilding construction bounty at a rate of 3 per cent on eligible costs from 1 July 1999 to 31 December 2000. The Government has also introduced phase out arrangements for the bounty which parallel those enjoyed by European shipbuilders.


The five-year Shipbuilding Innovation Scheme (SIS) will encourage product research and development and design innovation in the industry. Eligible shipbuilders will receive assistance at a rate of 50 per cent of innovation expenditure for up to a total of 2 per cent of eligible production costs. The scheme will run for five years from 1 July 1999.


The Australian shipbuilding industry has emerged as one of the modern export success stories. It is a world leader in the production of fast ferries. Australia now holds 40 per cent of the world fast ferry market


The measures were given effect by the Bounty (Ships) Amendment Act 1999, recently passed by Parliament The Act sends a clear signal of the Governments intention to encourage the growth of the Australian shipbuilding industry as a world class supplier of leading-edge products.


Specific provisions of the Act are:


* extension of the shipbuilding construction bounty from 1 July 1999 until 31 December 2000 at a rate of 3 per cent;

* establishment of a phasing out arrangement for the construction bounty to apply to vessels which are contract ed for sale on or before 31 December 2000, and are delivered on or before 31 December 2003;

* establishment of the Shipbuilding Innovation Scheme, which enables payment of a research and development bounty to registered shipbuilders, for eligible research and development expenditure, at the rate of 50 per cent of innovation expenditure up to a total of 2 per cent of the eligible construction costs of a bountiable vessel; and

* provision for the research and development expenditure bounty to apply to the construction and modification of vessels completed on or before 30 June 2004.


Media contact: Kate Schulze, Senator Minchin’s Office, 02 6277 7580;

or mobile 0419 432 664


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