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Government decision; IAC report on ships, boats and other vessels not exceeding 6000 tons gross register: and related matters

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The Minister for Industry and Commerce, Mr Phillip Lynch, the Minister for Business and Consumer Affairs, Mr Wal Fife, and the Minister, for Transport, Mr Peter Nixon today announced the Government's decision on the Industries Assistance Commission's report on Ships, Boats and Other Vessels Not Exceeding 6000 Tons Gross Register and other related matters

in respect of import controls on ships under the Government's shipping policy.

The Ministers said the Government had generally accepted the Commission's recommendations providing for the continuation of present assistance arrangements of tariffs, bounty assistance and import restrictions. The main features of the new assistance arrangements were:

® Twenty-five per cent duty on vessels not exceeding 150 tons gross and on fishing, vessels not exceeding 21 metres in length and continuation of bounty on all larger vessels, which will be dutiable at minimum rates.

o Introduction on 1 July 1980 of a new, simplified, bounty scheme under which bounty will be assessed as a percentage of cost of construction - present bounty arrangements to apply to eligible vessels for . which tenders close before 1 July 1980.

© Present levels of bounty to continue until 30 June 1984 - i.e. 25 per cent on lowest Australian tender price basis up to 30 June 1980 and 27% per cent on a cost of construction basis on vessels whose construction

commenced after 1 July 1980 and before 30 June 1984.

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e The bounty rate to phase down to 25 per cent for vessels commenced between 1 July 1984 and 1 July 1985; 22% per cent for vessels commenced between 1 July 1985 and 1 July 1986 and the long term bounty rate of 20 per cent to apply from 1 July 1986. , ■

© From 1 July 1980 bounty to be paid on modifications to ships where the total cost of modification exceeds $400 000 - the rate of bounty to be 20 per cent.

The Ministers also outlined a number of administrative changes to be introduced under the new bounty arrangements commencing on 1 July 1980.

It will not be necessary for a shipowner to enter into an agreement to repay bounty if a vessel built with the assistance of bounty is subsequently taken off the Australian coast or registered abroad. However, vessels built for export will not be eligible for bounty.

The requirement that registration of shipbuilders for bounty purposes be only accorded if it was judged to be in the interest of orderly development of the shipbuilding industry in Australia will be abolished. .

The new bounty scheme will be administered by the Department of Business and Consumer Affairs.

The Ministers said the Government had decided that commence­ ment of the phasing down period would be deferred until 1984, rather than 1982 if the Commission's recommendation was

adopted. The Government believed this would provide the industry with enough time to make an orderly transition to the new long term bounty rate of 20 per cent. In reaching its decision on a longer phasing down period the Government nad regard to the present world excess shipbuilding capacity and the possibility of overseas vessels being available at disruptive prices. _

The Ministers also announced that all vessels would remain as prohibited imports under the Customs (Prohibited Imports) Regulations.


However, under the shipbuilding assistance arrangements, importation of the following vessels will be permitted subject to such importation being in accordance with shipping policy requirements

e all new ships

© second-hand ships, as follows:

- not exceeding 15 tons gross

- exceeding 10 000 tons gross

- of a type not available new from Australian yards.

Permanent importation of second-hand vessels exceeding 15 tons gross but not exceeding 10 000 tons gross will not be permitted. Arrangements will continue, however, for temporary importation of these vessels.

It will no longer be a requirement for shipowners to call tenders locally if construction by an overseas yard is under consideration. Ministers said however that this decision was made in the expectation that shipowners would continue

to give local yards an opportunity to bid for supply of new vessels. For bounty purposes, the calling of tenders locally would be necessary until July I960 when the new bounty scheme commences.

The Ministers said the new assistance arrangements constit­ uted a package intended to allow continuation of the ship­ building industry as presently structured.

Administrative measures would be introduced to ensure that second-hand vessels temporarily imported do not remain on the Australian coast for longer than the periods of initial authorisation. This, together with restrictions on perm­ anent importation of second-hand vessels up to 10 000 tg

should ensure that the local shipbuilding industry was not faced with unfair competition. At the same time the arrange­ ments will allow shipowners to acquire new vessels at world . prices.

The Ministers also announced the Governments decision on import controls for shipping policy purposes following a review of these controls.

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In the interests of having stability in the coastal shipping industry, authorisation of imports under the shipbuilding assistance arrangements would be subject to importation being in accordance with shipping policy.

They said the importation of all vessels (new and second- . hand) would be permitted only where the vessels were to be registered in Australia or, if that were impracticable, would

operate under Australian conditions relating to: manning scales, crew accommodation .and rates of pay, but importation of foreign flag vessels would be permitted for limited periods where operations under Australian conditions would be impracticable.

In addition, for the next three years only, imports of second^ hand vessels exceeding 10 000 tons gross would be permitted . . only where .

the importer wished to replace his own existing or permanently imported vessels with a second­ hand vessel of a similar size, type and capacity; or

the vessel to be imported is subject to a long term contract and will not replace suitable available· : Australian built vessels.

The Department of Industry and Commerce would shortly make available to interested parties a paper giving fuller details . of the. Government's new policy on assistance to local shipbuilding. .

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The Covnmission’s report will be available from Australian Government Publishing Service Bookshops in each of the capital cities as soon as possible. ' ; '

Canberra, ACT


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29 November, 1979