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The industry commission



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M l 1 «.AUSTRALIA j m

TREASURER

NO. 75

EMBARGO 7.30 pm, 15 August, 1989

STATEMENT BY THE TREASURER, THE HON P.J. KEATING MR

THE INDUSTRY COMMISSION

As I indicated in the Budget Speech, the Industries Assistance Commission (IAC) is to be restructured to make it an effective catalyst for change.

Its charter will be greatly broadened and it will become the Government's major review and inquiry body in industry matters.

The expanded body will be renamed the Industry Commission.

The new Industry Commission (IC) will further the important role that the IAC has played in the structural adjustment process in Australia. It will build on the lAC's earlier work which was instrumental in awakening the community to the enormous costs of many industry assistance

policies.

The 1988 May Statement announcement to significantly lower tariffs flowed directly from the earlier work of the IAC.

As an institution, the IAC has been an important force, building community aw areness of the need for Australian industry to be outward looking and internationally competitive.

It is only in this way that Australia can make the best use of our resources and expand our productive potential.

By analysing structural issues across a wider spectrum than tariff reform, the Industry Commission will be an important stimulus for reform.

By providing independent advice to the Government and through its public inquiry processes the IC will build community aw areness of the need for structural change. As part of the process of building community awareness, the IC will be working to involve a wide range of groups in its inquiries. .

In the future all references on transport matters will be sent to the Industry Commission rather than the Inter-State Commission (ISC) and the staff and functions of the ISC will be absorbed by the Industry Commission as far as possible.

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The Government has also decided to establish an Office of Business Regulation within the Industry Commission to absorb the functions of the Business Regulation Review Unit. The Government will be proposing corresponding amendments to the Industries Assistance Commission Act 1973.

To give the IC a solid work program, the Government will shortly send a comprehensive set of references to the IC. The main references will cover: .

. Energy Generation and Distribution

. Railways

. Passenger Motor Vehicles

. Construction Costs for Major Plants

. Export Franchising and Distribution Arrangements

. Raw Material Pricing for Domestic Uses

. Product Liability

. Availability of Capital for Australian Industry

. Mining and Minerals Processing

. Commercial Tariff Concessions System

. Statutory Marketing Arrangements

Terms of reference will be developed shortly. On the first two items as well as the last that process will involve consultation with the States.

The full 2 year work program is attached. This will build on the lAC's current work program which was announced last year and which covered broader based inquiries into impediments to competitiveness in the Australian economy.

The Government will be recommending to the Governor-General the appointment of Mr Tony Cole as the Chairman of the Industry Commission. The Chairman will have an important role both in managing the IC but also in consulting with industry groups and the community. Mr Cole is a Deputy Secretary in the Department of the

Prime Minister and Cabinet and has had extensive experience in providing advice to Government across a wide range of areas including economic and social policy. Mr Cole was the joint author of the recently

released book "Apartheid and International Finance: A Program for Change".

CANBERRA ACT 15 August 1989

ATTACHMENT

FORWARD WORK PROGRAM OF THE INDUSTRY COMMISSION

The following list of inquiries is proposed for the Industry Commission over the next two years. The precise timing and detailed terms of reference of each inquiry will be announced at the time references are sent to the Commission.

1. Energy Generation and Distribution

The inquiry will cover efficiency of resource use and options for separating generation from distribution. State Governments will be consulted before proceeding with the inquiry.

2. Railways

The inquiry will examine impediments to improving the efficiency of rail services. State Governments will be consulted before proceeding with the inquiry.

3. Passenger Motor Vehicles

The inquiry will commence early enough in 1991 to allow consideration of the final report before any decision is made on post-1992 assistance arrangements for the industry.

4. Construction Costs for Major Plants

The inquiry will report on the nature and extent of cost disabilities in the construction of major mining, manufacturing and processing plants in Australia.

5. Export Franchising and Distribution Arrangements

The inquiry will report on the impact of these arrangements on Australian industry and the economy more broadly.

6. Raw Material Pricing for Domestic Use

The inquiry will report on export and import parity pricing of raw materials for domestic use.

7. Product Liability

The inquiry will examine the economic effects of the Law Reform Commission’s product liability proposals.

8. Availability of Capital

The inquiry will report on availability of capital for industries in the light of experience with financial deregulation.

9. Mining and Minerals Processing

The inquiry will examine impediments to these industries' contribution to the national economy.

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10. Commercial Tariff Concession System

The inquiry will review the overall objectives and operation of the system which allows duty-free entry of goods where domestic industry does not produce comparable goods.

11. Statutory Marketing Arrangements

The inquiry will examine the economic effects of the various arrangements at both Commonwealth and State levels. State Governments will be consulted prior to commencement of the inquiry.

12. Dairying

The Commission will conduct an inquiry into the dairy marketing arrangements that are due to expire in 1992.

13. Sugar

The Government has previously announced that the IAC would conduct an inquiry in 1991 into the long-term arrangements to apply from 1992.

14. Health Services

The inquiry will examine impediments to increased exports of health services.

15. Education Services

The inquiry will examine impediments to increased exports of education services.

16. Recycling

The inquiry will look at the economics of recycling.

17. Imported Aids and Appliances for Disabled People

The inquiry will examine the possibility of removing tariffs on these goods. ·

18. Implications for Australia of Firms Locating Offshore

The inquiry will report on implications of and opportunities for firms locating offshore in the context of the greater integration of the Australian economy with the world economy.