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Budget 2006: $10 million annual boost to power and water projects and their Australian suppliers.



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Media Release The Hon Ian Macfarlane, MP

9 May 2006

$10 MILLION ANNUAL BOOST TO POWER AND WATER PROJECTS AND THEIR AUSTRALIAN SUPPLIERS The Enhanced Project By-law Scheme, which offers tariff concessions to major projects for imported capital equipment that can’t be sourced in Australia, will be expanded to include significant power and water projects.

Australian Industry Minister, Ian Macfarlane, has announced the extension of the programme to take in power and water projects, which will deliver reduced tariff costs of about $10 million a year to major power and water projects.

The Enhanced Project By-law Scheme (EPBS) presently provides tariff duty concessions on eligible goods for significant projects in the mining, agriculture, food processing, manufacturing and gas supply industries.

“This programme loosens the shackles on major investment projects in Australia while also incorporating Australian Industry Participation Plans to provide Australian companies with the opportunity to win a guernsey in the local projects and global supply chains.”

“The Participation Plans will be developed for qualifying power and water projects and I expect that will generate at least $56 million in extra work and contracts for Australian companies,” said Mr Macfarlane.

The Scheme allows major project developers to apply for a tariff concession on imported capital equipment that is not produced in Australia or is technically more advanced.

“Through the EPBS we have seen greater transference of technology and skills to, and from, Australian companies as well as the development of many strategic partnerships between project developers and suppliers.”

“The local project work on these major projects allows the Australian companies to showcase their delivery strengths and pries open the door on international supply and partnership opportunities,” said Mr Macfarlane.

To get the tariff concession, major project developers in the power and water industries will develop and implement an approved Australian Industry Participation Plan that provides Australian industry with the opportunity to participate in the project.

Since 1 July 2002, it is estimated the existing Scheme has increased Australian industry participation by at least $1.7 billion in 270 projects, underpinning total major investment in Australia of more than $85 billion.

Department contact: Mike Lawson, 02 6213 6490.

Media contact: Kirsty Boazman, (02) 6277 7580 or 0412 171 444.

Supporting Information

Why is this important? z Expanding the Enhanced Project By-law Scheme will increase opportunities for Australian small to medium businesses to participate in major investment projects and gain entry to global supply chains. z It also supports the Government’s reform agenda in the power

and water industries by encouraging investment and smoothing out anomalies.

Who will benefit? z Industries investing in major power and water projects in Australia through reduced cost of capital equipment. z Australian suppliers who will have increased opportunities to

participate in major projects and increased access to global supply markets.

What funding is the Government committing to the initiative?

z The Government will forgo estimated revenue of $10 million per

year.

What have we done in the past? z For the existing Scheme the revenue forgone is estimated at $130 million.

When will the initiative conclude? z The Scheme is an ongoing programme.