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Industries assistance commission - inquiry program



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At.

TREASURER

EMBARGO

PRESS RELEASE NO. 7

STATEMENT BY THE TREASURER, THE HON. PAUL KEATING, MP.

INDUSTRIES ASSISTANCE COMMISSION - INQUIRY PROGRAM

I am announcing today details of the work program of the Industries Assistance Commission for the next two y e a r s .

By announcing the forward inquiry program now the Government will assist the IAC to use its resources efficiently, as well as demonstrating how the Government sees the Commission contributing to the process of structural adjustment now

under way in the Australian economy.

The sharp deterioration of Australia's terms of trade over the past two years, and the more recent troubles in world share markets, have highlighted the need for our industries to become and remain internationally competitive, for efficiency to be improved across-the-board and for

impediments to change to be removed. '

The Commission has a long tradition in assessing micro-economic efficiency issues and in identifying the costs that inefficiencies and assistance measures to one industry can impose upon others. The recent movement of the Commission to my portfolio reflects the Government's

intention that the Commission's role should be related more to the overall operation of the economy.

While the Commission will continue to conduct inquiries of a traditional kind into particular industries, the Government now intends that it also conduct broader ranging inquiries directed towards removing impediments to improved efficiency

across the whole spectrum of industry.

The Government believes there is merit in announcing a forward inquiry program for the Commission. This will:

. help focus the IAC's resources and expertise in areas

consistent with the Government's priorities for structural reform;

. ensure there is scope for the IAC to do more to identify

impediments to lower costs and improved efficiency across the whole spectrum of industry;

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. allow the IAC to program its inquiries more efficiently, contributing to better quality reports and higher productivity as a result of more stable workloads;

. provide a more orderly framework for private sector participants in IAC processes.

Against this background the Government has drawn up a program of references to be sent to the Commission over the next two

calendar years. A key feature of this program is the

inclusion of a number of broad ranging references.

It is proposed that the first such inquiry be into Government non-tax charges on industry - by both State and Federal Governments. Such charges have generally been introduced by Governments with beneficial objectives in mind, and they usually have been imposed as proper payment for services and

sometimes have incorporated broader social purposes. Nevertheless, the level and basis of some charges have been a source of complaint by business over a long period. In

addition, no clear picture is available on their overall impact. I will therefore be asking the IAC to prepare a

comprehensive information report surveying the basis and extent of such charges from the perspective of their impact on the competitiveness of Australian industry. Interested parties will be encouraged to assist in focussing this

inquiry on the areas of greatest concern from the point of view of international competitiveness. At the same time I will be looking to the States for their cooperation in the inquiry.

The program also includes an inquiry into trade in services. For the first time, trade in services is being addressed in the GATT Uruguay Round of Multilateral Trade Negotiations. In Australia, as in other countries, there is an imperfect understanding of the extent and effects of domestic barriers to trade in services. A reference asking the Commission to

identify, and evaluate the effects of, domestic barriers to trade in services in the context of the Uruguay Round would help Australia properly define, and pursue, its national interests in the negotiations.

The food processing industry has never been examined as a whole by the IAC yet it represents a significant part of our

industrial sector, and has considerable export potential. The IAC work program therefore includes a broad inquiry into the sector which will examine current assistance arrangements for the sector and the impediments it faces to improved competitiveness.

Another sector which has substantial further export growth potential is travel and tourism. There will be a need to

maintain the momentum in this area in order to achieve a larger ongoing contribution to invisibles earnings. It is proposed that the IAC conduct an inquiry into the industry to assess the impact of regulatory and other measures, and to

suggest corrective meas u r e s . The reference would take account of the current inquiry into tourism shopping.

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Other major references of a more traditional industry- character to be included in the program will cover the following industries:

- dairy industry;

- sugar industry;

- fabricated metal products and industrial machinery; - white goods.

Detailed terms of references for each inquiry will be announced following the usual consultations with relevant industry Ministers and industry representatives.

Scope is provided in the program for some additional references to be taken on board. Possible problems associated with customs harmonisation would be one example; remaining areas of relatively high assistance not reviewed in recent years could also be contenders.

In its Annual Report for 1986-87, the IAC referred to difficulties that have arisen through the elimination of a first round of public hearings in inquiries and the tendency for some parties to make submissions only very late in proceedings. Approval has been given to first round hearings being held in some particular inquiries and I will continue

this practice in appropriate cases. The Government will be prepared also to make available, where appropriate, relevant submissions and material put to us in relation to IAC recommendations after reports have been received. This will contribute to the transparency of the inquiry processes.

The arrangements I have announced today will enhance the capacity of the Commission to make a greater contribution to policies directed towards achieving a more efficient and internationally competitive economy.

Set out below is a listing of current IAC inquiries, together with an indicative timetable for the IAC's future work program.

Inquiries currently being conducted

- transport containers - fresh fruit

- wheat

- jewellery etc

- mining and agricultural equipment - coastal shipping - shipbuilding

Proposed broad inquiries on impediments to competitiveness

Government Charges on Industry -

Trade in Services -

Food Processing -

Travel and Tourism -

Commencing early 1988

Commencing early 1988

Commencing mid 1988

Commencing late 1988

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Industry reviews

Fabricated Metal Products and - Commencing early 1988 Industrial Mac h i n e r y

White Goods - Commencing early 1988

Dairying (scheduled mid-term - Commencing mid 1988 review of present arrangements)

Sugar Industry - Commencing mid 1988

CANBERRA ACT

26 JANUARY 1988

004101