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Industries Assistance Commission Act - Industries Assistance Commission - Report, together with statement by Minister on action taken on reports made under Part IV of Act - Year - 1974-75


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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

1975— Parliamentary Paper No. 276

INDUSTRIES ASSISTANCE

COMMISSION

ANNUAL REPORT 1 9 7 4 -7 5

Presented pursuant to Statute 30 October 1975 Ordered to be printed 11 Novem ber 1975

COMMONWEALTH GOVERNMENT PRINTING OFFICE CANBERRA 1976

The Honourable The Special Minister of State:

In accordance with Section 45 (1) o f the Industries Assistance Com­ mission A ct 1973, I am directed by the Commission to forward herewith its annual report for the year 1974-75.

A. E. S. DAVEY, Secretary

29 September 1975

PREFACE

In its first annual report, the Commission out­ lined its general approach and how it proposed to take into account the economic and social

policy objectives set out in the Industries Assistance Commission Act. This report elaborates that approach to the long term

development of Australian industries.

The Australian economy is currently experiencing serious difficulties. It is not sur­ prising, therefore, that immediate problems have tended to dominate recent debate about

the Australian economy and industries. The current situation has led to increasing pressure to insulate particular industries from overseas competition; and it is true that additional

assistance to particular industries can help to maintain employment in those industries. How­ ever, it cannot solve general, economy-wide

unemployment and inflation problems. In the long term, the use of such assistance to insu­ late particular industries from necessary long

term change tends to become progressively more costly to the community as a whole.

Current difficulties in the economy should not be permitted to obscure the fact that the community’s basic resources of labour and capital are limited. Both economic and social well-being depend on adherence to policies that fully recognize this constraint. In the long

term, all industries in all sectors of the

economy are competing with each other for the use of these resources. A strategy for the development of any industry must necessarily influence the movement of resources between the industry concerned and other industries.

The Commission’s approach to the develop­ ment of industries is not confined to any par­ ticular sector of the economy. Because of its economy-wide responsibilities, the fundamental

characteristic of its approach is its broad perspective—based on the need to develop rational and consistent criteria for all indus­ tries. Its overriding aim is to improve the well­

being of the community as a whole.

The Commission’s approach is designed to encourage the development of industries in Australia in a way which promotes the

interests of the whole community—by encouraging the use of resources, particularly new resources, in those activities which use them most efficiently. This approach recognizes

that economic efficiency is important not for its own sake but as a means of enabling

people, individually and collectively, to do more of the things they want to do. It enables the community to enjoy more material goods, more leisure, better education, defence and health services. It provides greater oppor­

tunities for help to be given to the dis­

advantaged within Australia at less cost to the well-being of the remainder of the population; it provides resources for protecting or restoring the environment; and it enables Australia to

be more generous in providing aid to less developed countries. In fact, efficient resource use is fundamental to the achievement of the nation’s objectives.

Because resources are not unlimited, the Commission’s approach also involves a gradual reduction in assistance to high cost industries. In the process of inquiring into and reporting

on high cost industries the Commission is identifying those areas of their production which have long term potential for low cost

development under Australian conditions.

The Commission’s approach involves posi­ tive measures to improve the mobility, quality and productivity of resources. Examples of such measures are described in Chapter 3. The Commission has references relating to some of

these measures (restricted to the rural sector) and has sought a reference to enable it to inquire into and report on encouragement to research and innovation and their application in Australian industries generally.

Finally, the Commission’s approach emphasises the need to research in advance likely changes in the environment for industry development in Australia and to publish the results of such research. The impact of change

on Australian industries is a major theme of this report. Change in the environment for industry development in Australia has import­ ant implications for industry and therefore for

the Commission’s work. The Commission has concluded that more of its work should be concerned with identifying, researching and providing well-documented advice on likely

changes in the environment for industry development—including changes which will occur as a consequence of natural factors, such as workforce and population trends. This

research and advice can provide a basis for government decision and action. It should also assist industries in all sectors of the economy to anticipate changes and thus help to provide

the information and guidance necessary for producers and investors to plan industry development with more confidence and security than would otherwise be possible.

Footnote: Most of the research and statistical data in this report relates to the manufacturing sector. Research on a sector-wide basis regarding the manu­ facturing sector has been carried out for several years by the Commission and the Tariff Board. This has

been possible because data have been collected annually on an integrated basis for this sector for a number of years. In the other sectors, except mining, most of the data have been either collected only periodically or on a non-integrated basis.

Steps have now been taken by the Australian Bureau of Statistics to collect annually production and finan­ cial data on an integrated basis for the rural sector. With regard to the services sector, the Bureau is taking

steps to extend the area of integration and where data are collected on a periodic basis to reduce the interval between collections. The Commission’s ability to pursue sector and economy-wide analysis will be enhanced as

the Bureau’s planned extension of an integrated data system proceeds.

CONTENTS

Page

Chapter 1 STRUCTURAL CHANGE IN THE AUSTRALIAN ECONOMY . . 1 The nature of structural change . . . . . . . . . 1

The causes of structural change . . . . . . . . . 1

The capacity of industries to cope with structural change . . . . 4

The effects of changing assistance to industries . . . . . . 7

Long term structural reform in perspective . . . . . . . 13

Chapter 2 RECENT CHANGES IN A SSISTA N C E................................................................. 15

Rural s e c t o r .................................................................................................................16

Mining sector . . . . . . . . . . . . 16

Manufacturing s e c t o r ............................................................................................. 17

Chapter 3 THE COMMISSION’S APPROACH TO THE DEVELOPMENT OF IN D U STRIES................................................................................................................ 21

The benefits of more efficient resource u s e ................................................................ 22

The path to better resource use . . . . . . . . . 25

Factors affecting the rate of adjustment . . . . . . . 27

Approaches to assist adjustment and encourage innovation . . . . 28

Advice on industry assistance—the public inquiry process . . . . 30

Chapter 4 OPERATIONS OF THE CO M M ISSIO N ................................................................. 32

Reporting and research functions . . . . . . . . 32

Inquiry and reporting p r o c e d u r e s .......................................................................... 33

References received and reported on . . . . . . . . 33

Changes in the membership of the Commission . . . . . . 34

Administration . . . . . . . . . . . . 34

Appendixes* 1.1 Recent trends in Australia’s balance of paym ents..................................... 36

1.2 The structure and mobility of the Australian labour force . . . 41

1.3 Aspects of recent trends in imports . . . . . . . 74

2.1 Forms of assistance in Australia . . . . . . . . 84

2.2 Recent changes in assistance for selected industries in Australia . . 95 2.3 Temporary assistance . . . . . . . . . 100

2.4 Complaints of dumping, by industry: 1972-73 . . . . . 1 0 8

3 The gains from reducing protection . . . . . . . 109

4.1 The advisory process for assistance to industries . . . . . 1 1 7

4.2 The operations of the Tariff Board and Industries Assistance Commission 120 4.3 Profitability and capital structure of Australian manufacturing industry 186

TABLESf 1.1.1 Balance of payments: Australia—1964-65 to 1974-75 ............................................... 39

1.1.2 Composition of exports: Australia—1961-62 to 1973-74 . . . . . 40

1.1.3 Estimates of export income from mining: Australia—1973-74 to 1983-84 . . 40 1.2.1 Job duration of employed persons, by sex, age and birthplace: Australia—November 1972 41

1.2.2 Job duration of employed persons, by sector: Australia—November 1972 . . 42 1.2.3 Job duration of employed persons, related to effective rates of assistance: Australia— November 1972 . . . . . . . . . . . . 43

1.2.4 Current and previous job, by sector, of employed persons who had more than one job in the previous year: Australia—November 1972 . . . . . . . 44

* The appendixes in this report are numbered according to the chapters to which they relate. For example, Appendixes 1.1 and 1.2 relate to Chapter 1. t The tables in this report are numbered according to the appendixes to which they relate. For example, Tables 1.1.1, 1.1.2 and 1.1.3 relate to Appendix 1.1.

Page

1.2.5 Current and previous job, by industry, of employed persons who had more than one job in the previous year: Australia—November 1972 . . . . . . 45

1.2.6 Characteristics of employment by sector: Australia—30 June 1971 . . . . 46

1.2.7 Characteristics of male employment by sector: Australia—30 June 1971 . . . 47 1.2.8 Characteristics of female employment, by sector: Australia—30 June 1971 . . 48 1.2.9 Employment by sex and birthplace, related to effective rates of assistance: Australia— 30 June 1 9 7 1 ..........................................................................................................................49

1.2.10 Characteristics of employment in the manufacturing sector, by industry: Australia— 30 June 1 9 7 1 .......................................................................................................................... 50

1.2.11 Characteristics of male employment in the manufacturing sector, by industry: Australia—30 June 1971 . . . . . . . . . . . 5 8

1.2.12 Characteristics of female employment in the manufacturing sector, by industry: Australia—30 June 1 9 7 1 .........................................................................................................66

1.3.1 Notified retrenchments in manufacturing industry due to structural change: Australia— 1 July 1973 to 30 June 1975 78

2.1.1 Forms of assistance classified by type of measure: Australia—1972-73 to 1974-75 . 84 2.1.2 Forms of assistance in the rural sector: 1972-73 to 1974-75 ...................................... 89

2.1.3 Forms of assistance in the mining sector: 1972-73 to 1974-75 . . . . 91

2.1.4 Forms of assistance in the manufacturing sector: 1972-73 to 1974-75 . . . 93

2.1.5 Forms of assistance in the services sector: 1972-73 to 1974-75 . . . . 94

2.2.1 Average effective rates of assistance for some rural activities, 1971-72 to 1973-74 . 95 2.2.2 Summary of recommendations by the Tariff Board and Industries Assistance Com­ mission for manufacturing industries reported on during 1973-74 and 1974-75 . 96 2.2.3 Structural adjustment assistance schemes for industry and individuals . . . 99 2.3.1 Reports on requests for temporary assistance: 1960-61 to 1974-75 . . . . 103

2.3.2 Tariff quotas introduced since 1 July 1974 and operative as at 1 July 1975 . . 104 2.3.3 Import licensing introduced since 1 July 1974 and operative as at 1 July 1975 . . 105 2.3.4 Voluntary restraint arrangements introduced since 1 July 1974 and operative as at 1 July 1975 ................................................................................................................. 106

2.3.5 Characteristics of industries currently assisted by import restrictions . . . 107 2.4 Complaints of dumping, by industry: 1972-73 . . . . . . . 108

3.1 Average tariffs on total and dutiable most-favoured-nation imports, by commodity group: 1970 . . . . . . . . . . . . . I l l

3.2 Distribution of imports of industrial products under the most-favoured-nation tariff, by level of tariff rates: 1970 ..................................................................................... 112

3.3 Size and structure of selected manufacturing industries—Australia and Canada . 113 3.4 External trade as a proportion of GNP: OECD countries, 1960 and 1970 at 1963 prices 115 3.5 Intra-industry trade in selected countries: 1959-1967 ............................................... 115

3.6 Gross domestic product per head in OECD countries, 1960 and 1973 at 1970 prices 116 4.2.1 References received and reported on by the Tariff Board and Industries Assistance Commission, by type of reference: 1967-68 to 1974-75 . . . . . . 120

4.2.2 Stage of completion of inquiries and action taken on references at 30 June 1975 . 121 4.2.3 Stage of completion and action taken on references between 1 October 1974 and 30 September 1975 . . . . . . . . . . . . 179

4.2.4 Reports and papers produced by the Industries Assistance Commission during 1974-75 182 4.2.5 Characteristics of manufacturing industries reported on by the Tariff Board or the Industries Assistance Commission during 1973-74 and 1974-75 . . . . 1 8 4 4.3.1 Concentration, profitability and sales: manufacturing sector—1973-74 . . . 188 4.3.2 Profitability, capital structure and sales ratios: manufacturing sector—1963-64 to

1973-74 ........................................................................................................................... 189

4.3.3 Profitability, capital and sales ratios: manufacturing sector—averages for each industry —1971-72 to 1973-74 190

4.3.4 Profitability, capital structure and sales ratios: manufacturing sector—median and quartile analysis of large firms in each industry—1971-72 to 1973-74 . . . 201 4.3.5 Profitability, capital structure and sales ratios: manufacturing sector—Australia and the United States of America—1963-64 to 1973-74 . . . . . . 212

4.3.6 Industry classification: relationship to ASIC ........................................................ . 2 1 3

1.1 Trends in gross domestic product and employment, by sector: Australia—1900-1969 2 1.2 Fixed capital expenditure in manufacturing industries, related to effective rates of assistance: Australia—1968-69 to 1972-73 . . . . . . . . 8

1.3 Distribution of females and migrants among manufacturing industries ranked by effective rate of assistance, Australia—30 June 1 9 7 1 ........................................................11

1.4 Distribution of ‘skilled’ persons among manufacturing industries ranked by effective rate of assistance: Australia—30 June 1 9 7 1 .......................................................................... 12

1.3.1 Trends in main economic aggregates, seasonally adjusted: Australia—1970-71 to 1974-75 ........................................................................... 79

1.3.2 Relationship of imports’ share in gross national expenditure to factory overtime: 1960-61 to 1974-75 ........................................................................................................ 80

1.3.3 Trends in imports and gross national expenditure, seasonally adjusted, and movements in the ratio of import prices to domestic prices: Australia—1960-61 to 1974-75 . 81 1.3.4 Index of effective exchange rate: Australia—1970-71 to 1974-75 . . . . 82

1.3.5 Movements in Australia’s exchange rate with selected countries: 1970-71 to 1974-75 83 2 Range of tariff rates recommended by the Tariff Board or Industries Assistance Commission: 1973-74 and 1974-75 18

4.1 The advisory process for assistance to in d u s trie s ........................................................ 119

FIGURES* Page

t The figures in this report are numbered according to the chapters or appendices to which they relate. For example, Figures 1.1 and 1.2 appear in the text of Chapter 1. Figures 1.3.1 and 1.3.2 relate to Appendix 1.3.

1. Structural Change in the Australian Economy

1.1 Change is one of the most constant

elements in the environment. However, indivi­ duals or members of various groups in the community are sometimes slow to recognize this fact: although beneficial changes are generally welcomed, attempts are often made to prevent or postpone changes which disturb settled ways of living and working.

1.2 This chapter is about changes which occur over the longer term in the structure of Australian industries, the general causes of these changes, and some of the factors which will influence the capacity of industries to

cope with them. It suggests that the Australian economy is normally well able to cope with the changes (including the rate of change) in the industrial structure which the Commission is likely to recommend to enable Australia to

make better use of its resources in the future.1

The nature of structural change

1.3 ‘Structural change* is the term normally used to describe a change in patterns of pro­ duction in the economy, or in the allocation of resources between different types of pro­ duction activities or different regions. A broad picture of the change which has occurred in the Australian industrial structure since the beginning of this century can be obtained by examining the changes which have occurred

in the relative sizes of the main sectors of the economy—that is, the rural, mining, manu­ facturing and services sectors (Figure 1.1). Since World War II, the most striking changes

have been the decrease in the relative size of the rural sector and the increase in the relative

T h e Commission explained in its 1974 annual report (Chapter 5) why the community should be concerned about the efficiency with which its resources are used. There is further discussion of this question in Chapter

3 of the present report.

size of the services sector, measured in terms of their contributions to gross domestic product at factor cost.

1.4 In an economy which is growing—as Australia’s has been almost continuously throughout its history—most individual indus­ tries are also growing, although at different rates. Relatively few industries—as distinct from firms—actually contract in size, in

absolute terms. In other words, in a growing economy, structural change usually takes the form of variations in the relative growth rates of individual industries. For example,

during the twenty years to 1967-68, 18 indus­ tries in the manufacturing sector grew at least twice as fast, in terms of value of production, as the sector as a whole, while 48 industries grew at less than half the rate for the sector

as a whole.* 2 Production declined absolutely in only three industries, in terms of current values.3 Employment increased at least twice as fast as for the sector as a whole in 33

manufacturing industries, and at less than half this rate in 64 industries.

1.5 Within individual industries, structural change manifests itself through changes in the types and ranges of products made, in the number of establishments or factories in each

industry, and in the locations of these establish­ ments. For example, the number of factories at least doubled in 39 manufacturing industries during the twenty years up to 1967-68, whereas

it declined absolutely in 46 manufacturing industries over this period.2

The causes of structural change

1.6 Virtually all structural change can be attributed ultimately to changes in the

community’s demand for different types of

2, 3 for footnotes see page 3.

1

FIGURE 1.1: TR EN D S I N G RO SS D O M ESTIC P RO D U C T A N D E M P LO YM E N T, B Y SECTO R: A U STR A LIA — 1900-1969

Percentage o f total G D P / employment

Mining

Rural

Manufacturing

Services

GDP at factor cost Employment

1910-19 1930-39 1900-09 1940-49 1960-69 1920-29 1950-59

Note: The figure shows, cumulatively, the proportions of GDP at factor cost, and employment, attributable to each of the main sectors. The points on the chart are averages for each ten year period. No information is available for GDP at factor cost for the period 1940-49. Sources: GDP: 1900-09 to 1930-39: N. G. Butlin, Australian Domestic Product, Investment and Foreign Borrowing, 1938-39, CUP, 1962. 1950-59 onwards: ABS, Australian National Accounts, 1973-74.

Employment: 1910-19 to 1950-59: M. S. Keating, The Australian Workforce 1910-11 to 1960-61, ANU, 1973. 1960-61 to 1963-64: M. S. Keating, D. S. Gascoine, ‘Average Earnings per Employee and Product per Worker in Australia, 1959-60 to 1965-66,' Economic Record, June, 1970. 1964-65 onwards: ABS, The Labour Force,

goods and services; to changes in the supplies, and relative prices, of the various inputs into production processes—such as materials and different types of labour; to changes in tech­ nologies; or to actions by governments. For

example, the immigration program followed by all Australian Governments since World War II considerably increased the proportion of migrants in the population—the proportion of persons in the population who were bom over­ seas increased from 11 per cent in 1947 to 20 per cent in 1971—and helped to bring about changes in the community’s attitudes and tastes, which were reflected in changes in the types of goods and services demanded by the community. It also increased the supply of certain types of labour skills in the com­ munity. The considerable inflow of foreign capital during much of the post-war period— reaching as high as 15 per cent of gross fixed capital formation in some years—brought with it new products, technologies, manage­ ment techniques and, in some cases, new enter­ prises; and it would have had an important effect on the internal structure of some

industries.

1.7 The development and widespread use of synthetic materials brought radical but not universally advantageous changes in the pro­ duct ionprocesses used, and types of products made, by industries. For example, during the twenty years to 1967-68, the Rayon Acrylic

'These figures were calculated from data published by the Australian Bureau of Statistics up to 1967-68, according to a classification of manufacturing indus­ tries no longer used by the Bureau. Data on manu­

facturing industries published by the Bureau for 1968-69 onwards cannot be readily compared with data for earlier years. As a result, the relative growth rates of individual industries over a long period, and

up to the present time, cannot be readily calculated. T o derive the figures quoted in paragraphs 1.4 and 1.5, growth was measured by comparing average levels of

production (employment, number of factories) for the three years 1945-46 to 1947-48 with average levels of production (employment, etc.) for the three years 1965-66 to 1967-68.

•Over the period 1949-50 to 1967-68, production valued in constant prices tended to decline in 4 of the 62 factory sub-classes for which the Australian Bureau of Statistics published indexes of factory production

at constant prices. (Such indexes were not published for the remaining 106 factory sub-classes in the manufacturing sector). These 4 factory sub-classes were Woolscouring and Fellmongering, Tanning

Currying and Leather Dressing, Hats and Caps (not millinery) and Boxes and Cases. The average annual rates of growth of the other 58 factory sub-classes, as calculated by the Commission, ranged from zero to

19.4 per cent (see also footnote 4).

and Other Synthetic Fibres industry4 grew at nearly three times the rate for the manufactu­ ring sector as a whole, in terms of value of production, whereas the Wool Carding Spin­

ning and Weaving industry grew at less than a third of the rate of the manufacturing

sector as a whole.

1.8 Some of the factors which contributed to the structural changes that occurred in Aus­ tralia during the last few decades are still operative and seem likely to continue to

influence the pattern of industrial development for some time into the future. For example, the growth which has occurred since World War II in Australia’s trade with countries in

the Asian and Pacific regions seems likely to continue. This trend—typified by the

emergence of Japan and the United States of America as Australia’s main overseas markets, and displacement of Britain from the position it had held for over a century as Australia’s principal overseas market and supplier—has contributed to structural change in the

economy mainly by enlarging the markets for the products of some local industries, and intensifying the competition in the local

market for others, such as Textiles and Motor Vehicles.

1.9 The growth of the mining sector which began in the second half of the 1960s, follow­ ing the discovery of extensive reserves of oil, natural gas, iron ore, and a variety of other minerals, may also continue. Although the

rate of growth of this sector during the next decade may well be lower than during the last decade, the expansion which has already occurred will continue to have important effects on other sectors of the economy for some time to come, principally through its likely effects on the exchange rate (Appendix

1. 1) . ‘

1.10 A factor which has only just begun to contribute towards structural change in Aus­ tralia is the apparent change in attitude to­ wards varying the exchange rate, in line with the adoption of more flexible exchange rate policies in most of the other countries with

which Australia trades (Figures 1.3.4 and 1.3.5). This development, after a long period during which variations in the exchange rate ‘The industry descriptions used in this paragraph, and

in footnote 3, relate to the factory classification used by the Australian Bureau of Statistics up to 1967-68. This classification is different from the one referred to elsewhere in this report—for example, in Appendix

1.2 (see footnote 2).

3

were avoided as far as possible, has profound importance for the economy generally as well as for individual industries. It means that fundamental economic changes in Australia

and other countries are likely to be reflected more promptly than in the past in the terms on which Australia trades with other countries.6

1.11 Some of the implications of more flex­ ible exchange rate policies, in Australia and overseas countries, for structural change in Australia have been demonstrated during the last few years. Following the accumulation of

substantial overseas reserves, due mainly to a rapid rise in export earnings by the mining sector (Appendix 1.1), the Australian

dollar was revalued twice and devalued once between June 1972 and September 1974 (Fig­ ure 1.3.4). Over the same period, numerous changes were made by other countries in their exchange rates. The effect of the revaluations, modified to some extent by the later devalua­ tion of the Australian dollar, would have -been to alter the relative returns from alternative

uses of resources—and more specifically, to encourage some resources to move from certain import-competing and exporting industries into industries in the non-trading sector.

1.12 A recent development which has not yet caused significant structural change in Aus­ tralia, but which seems likely to do so during the next decade, is the rise in international oil prices during the last few years. The way in which this development affects the Australian

industrial structure will depend critically on the relationship which emerges over the longer term between domestic and overseas oil prices.6

Possible future developments which may gener­ ate important structural changes in Australia during the next decade, or over the longer term, include a general lowering of barriers to international trade, and a decline in the rate

“It also means that the argument often put forward for tariffs and export subsidies in the 1950s and 1960s when balance of payments deficits appeared to be a recurring problem—that such measures would help the balance of payments by reducing imports and stimulating exports—will be less valid in future

than it may have been then. T h e Government recently announced that as from 18 September 1975 oil from newly discovered fields ‘will attract a price at the nearest refinery port equivalent

to the landed cost of imported crude oil from time to time’ (Prime Minister, Press Statement No. 556, 14 September 1975). It also announced that the Indus­ tries Assistance Commission would be asked to make recommendations on ‘all aspects of Australian crude oil policies after 1980 when the present indigenous crude oil absorption arrangements expire'.

of growth of the Australian population and change in its composition.

1.13 The First Report of the National Popu­ lation Inquiry predicted a decline in the rate of growth of the Australian population on the basis of predicted declines in fertility and immigration. It also predicted a decline in the rate of growth of the labour force, due not only to the factors just mentioned but also to a slackening in the rate of growth in female participation in the labour force. The signifi­ cance of such changes will be greater for some industries than for others. For example, indus­

tries specialising in supplying products for particular age groups will be obliged to adjust their levels and patterns of production if the

age structure of the population alters; and industries which have been heavily dependent on certain types of migrant labour may experi­

ence difficulties if immigration declines.

1.14 The general significance of the popula­ tion projections for the manufacturing sector becomes evident when it is recalled that one of the historic reasons for protecting manufac­ turing industries in Australia was the desire to provide employment opportunities for a rapidly growing population. Expansion of the manufacturing sector was considered necessary to support this population growth, particularly

as employment opportunities in the rural sector began to decline. Although this historic argu­ ment for expansion of the manufacturing sector is still used, the recent population projections suggest that it is now less valid than it may once have been—and that it is likely to become increasingly less valid.

1.15 Because demographic changes are one of the basic causes of structural change, the Commission has recently begun a study, jointly with other interested bodies, of the longer term implications for the Australian industrial

structure of the projections in the First Report of the National Population Inquiry.

The capacity of industries to cope with structural change 1.16 The capacity of industries to cope with the types of changes in their general economic

and trading environment described in the pre­ vious section, and with the structural changes to which these give rise, depends partly on the rate at which the economy is growing, and on the ability of the Government to maintain a high level of aggregate demand in the com­ munity through fiscal, monetary and exchange

4

rate policies. This is clearly demonstrated by the experience of the last few decades. Thus, despite the substantial growth in the labour force in Australia during this period, due partly

to the inflow of migrants and, more recently, the entry of an increasing proportion of women into the labour force, and despite the fact that employment opportunities declined

absolutely in some industries, the general level of employment in the economy remained high throughout most of this period. During the

few and relatively brief periods that unemploy­ ment exceeded 2 per cent of the labour force, such as in 1961 and 1972—and more notably

at the present time—the basic reason for the rise in unemployment was a cyclical downturn in the general level of economic activity.

1.17 The capacity of industries to cope with structural change depends also on their adapt­ ability to changing circumstances— and in par­ ticular, on the willingness of workers to change their jobs and perhaps also their place of living,

and on the speed with which investors can recognize and take advantage of new oppor­ tunities. Most structural changes involve some disturbance to settled ways of living and work­

ing, and entail adjustment costs of one form or another for someone. For example, alterations of product ranges often entail the abandon­ ment of activities to which individual firms

have become accustomed, or the investment of time and effort in developing new product lines. Firms which adopt new production pro­ cesses are often obliged to train new labour

skills and to reduce their employment of other skills. Expanding industries would, under nor­ mal economic conditions, draw some of the additional resources they need away from other industries, thereby imposing adjustment costs

on those who have invested in the latter indus­ tries or who work in them.

1.18 As a first step towards improving its understanding of industries* capacity to cope with change, the Commission has begun an analysis of the latest data available from the

Australian Bureau of Statistics on labour mobility in Australia.7 The initial results of that analysis are summarised below and in Appendix 1.2 (Tables 1.2.1 to 1.2.5).

The mobility of labour

1.19 The Bureau surveyed a representative sample of the 5.57 million persons who were

7ABS, Labour Mobility, November 1972.

employed in Australia in November 1972Λ This survey showed that about 25 per cent of all persons employed—or about 1.38 million persons—had been in their current job for less

than one year (Table 1.2.1). The proportion of these ‘short term ’ employees was much higher than this among younger people (44 per cent) and females (32 per cent), and much

lower among older people (14 per cent) and males (21 per cent). It varied less across the main industry sectors, however, ranging from 16 per cent in Agriculture up to 29 per cent

in Wholesale and Retail Trade (Table 1.2.2). There was little difference between the pro­ portions of short term employees in high and low cost industries (Table 1.2.3).

1.20 A high preportion of the 1.38 million short term employees had not been con­ tinuously employed throughout the preceding twelve months, and many of these persons had held more than one jdb during that period

(Table 1.2.1). The total number of these ‘intermittent’ employees was 1.02 million—or 18 per cent of all persons employed in Aus­ tralia. As might be expected, the distribution of the intermittent employees appeared to be

similar to that for short term employees: the proportions appeared to be higher among younger people and females, and lower among older people and males. Across the main

industry sectors, the proportion of intermittent employees was lowest in Transport, Storage and Communications and, as with short term employees, highest in Wholesale and Retail

Trade (Table 1.2.2).

1.21 The Commission analysed data relating to those persons who could be described as ‘job-mobile’—that is, persons who had held more than one job during the twelve months

to November 1972. The total number of such persons was 0/97 million, or about 17 per cent

8It is not clear at this stage whether the general

economic conditions in Australia in 1972 would have significantly affected the picture of labour mobility which emerged from the Bureau’s survey (and hence whether a very different picture of labour mobility will emerge from a similar survey which the Bureau

conducted in February 1975). The average rate of unemployment over the twelve months to November 1972 was 2.2 per cent. The general picture of labour

mobility revealed by an earlier survey by the Bureau, in February 1969 (ABS, Labour Force Experience 1968), was not significantly different from that revealed by the 1972 survey, although economic con­

ditions were more buoyant at the time of the earlier survey: for example, the average rate of unemploy­ ment in February 1969 was only 1.5 per cent

(seasonally adjusted).

5

of all persons employed in Australia (Table 1.2.1). The proportions of such persons in total employees ranged from 13 per cent in Agriculture up to 25 per cent in Construction

(Table 1.2.2). Within Manufacturing, the pro­ portions of job-mobile employees did not differ significantly between high, medium and low cost industries (defined for the purpose of the

analysis as industries which had average effective rates of assistance in 1969-70 of more than 50 per cent, 25 to 50 per cent, and less

than 25 per cent, respectively) (Table 1.2.3).* 9 1.22 About half the job-mobile persons employed in each industry sector had come from other jobs within the same sector (Table

1.2.4). Of those job-mobile persons who had changed sectors, the largest numbers in absolute terms comprised persons moving between Manufacturing and Wholesale and

Retail Trade, and persons moving from the latter into Finance, Business and Community Services. Amongst those job-mobile persons moving into Manufacturing from other sectors, persons from Construction and Wholesale and

Retail Trade were disproportionately highly represented.

1.23 Of the 0.22 million job-mobile persons employed in Manufacturing, about 0.10 million were in high cost industries at the time of the ABS survey (Table 1.2.3). Of these, 19 per

cent had come from lower cost industries within Manufacturing and 44 per cent from industries in other sectors of the economy (Table 1.2.5).10 * Of the total number of job-

mobile employees in low cost manufacturing industries (0.06 million), 23 per cent had come from higher cost industries within

Manufacturing and 56 per cent from industries in other sectors of the economy.

1.24 One point to emerge from the Com­ mission’s analysis was that much of the mobility of labour in Australia is associated with movements in and out of the labour force, rather than with movements between

•About 31 per cent o f the 0.97 million job-mobile persons employed throughout all sectors had also changed their ‘major occupation groups’ and 47 per cent had changed their ‘minor occupation groups’.

The occupation classification of the Australian Bureau of Statistics distinguishes eleven major occupation groups, and 78 minor occupation groups. “ About 0.17 million, or nearly 80 per cent, of the

0.22 million job-mobile employees in Manufacturing had come from jobs in manufacturing industries other than the 3-digit ASIC industry group in which they were employed in November 1972, or from other sectors of the economy.

jobs by persons who are continuously in the labour force: of the 1.38 million persons employed in November 1972 who had been in their current jobs for less than twelve months, only 0.36 million had been continuously

employed throughout that period. This fact is relevant to any assessment of the general capacity of the economy to cope with struc­ tural change, because it suggests that a sig­ nificant part of the burden of adjusting to structural change may fall on ‘intermittent’ employees—that is, on persons who appear to be less committed to continuous employment than the majority of the labour force. It is relevant also to any assessment of the capacity of individual industries to cope with structural changes, because it suggests that those indus­ tries with a higher proportion of intermittent employees in their labour force, such as those employing more females, may have less diffi­ culty in coping with such changes. The large number of intermittent employees in the labour force has some significance also for the nature

of retraining schemes and other forms of assis­ tance which are provided to help industries to adjust to structural change.

1.25 Another point to emerge from the

analysis is that employees in high cost manu­ facturing industries appear to be just as

mobile as employees in other industries: dur­ ing 1972, they changed jobs within and between industries just as frequently as em­ ployees in other industries. This is relevant to any assessment of the capacity of high cost industries to cope with structural change, including changes in assistance.

1.26 The extent of social hardship associated with structural change depends largely on the number of persons losing their jobs as a result of such changes, and on the periods for which those wishing to work are without jobs (or have to accept less rewarding work than they

are accustomed to). The information available from the Australian Bureau of Statistics for 1972 suggests that most workers who changed jobs in that year did so without becoming

unemployed:11 that is, they either changed directly from one job to another or left the labour force for a short period between jobs. During 1972, 10 per cent of the labour force was unemployed at some time; but the Com­ mission’s analysis of labour mobility suggests

uAn unemployed person is conventionally defined as somebody not currently in a job, but who is actively seeking work. Thus an unemployed person should be distinguished from a person not in the labour force.

6

that a significant proportion of those unem­ ployed would have been seeking work for only part of the year. Of those who registered as unemployed between June 1972 and

October 1974, 50 per cent were without a job for less than one month and a further 30 per cent were unemployed for one to three

months. (The percentages were very similar for males, females, adults and young people.) Most unemployment, therefore, was for relatively short periods.8

The adaptability of investors 1.27 New investment is potentially much more mobile than labour: the rational investor will be prepared to direct his more liquid

capital into whatever uses seem likely to yield the ‘best’ return to him over some future period, given his general attitude towards risk, the amount of information and understanding

he has of alternative investment opportunities, and the general efficiency of the capital mar­ ket. The mobility of capital already invested, on the other hand, obviously depends on the

form of the investment. At one extreme, the capital may be just as mobile as new invest­ ment; at the other extreme—when it is highly specialised and durable plant, for example—it

is very immobile in the short to medium term.

1.28 It is of interest that the distribution of new fixed capital investment among manufac­ turing industries during the period 1968-69 to 1972-73 does not appear to have been

systematically related to industries’ average effective rates of assistance. In other words, the opportunities for investment appear to have been no less numerous among low cost

industries than among high cost industries (Figure 1.2). This fact has some relevance to the claim often made by critics of the Com­ mission’s general approach to the development of industries that resources displaced or

diverted from high cost industries would have difficulty in finding employment opportunities in lower cost activities (see paragraph 1.35).

1.29 One of the important objectives of the Commission, both in its reports on particular industries and in its more general research program, is to provide some of the basic

information which investors require if they are to respond promptly and intelligently to the new opportunities that continually arise in a changing environment. Accordingly, the Com­

mission endeavours to provide in its reports and technical papers on individual industries comprehensive information about recent trends

in those industries and the likely impact of its recommendations on firms and people (Table 4.2.4). Other more general studies undertaken by the Commission deal with factors which

influence the general structure and perform­ ance of Australian industries, and the possible implications for industries of important changes in their general economic and trading

environment (see paragraphs 3.38 to 3.41). The type of information the Commission will progressively provide should assist investors to plan more effectively and with greater security.

It should also reduce their dependence on, and increase their freedom from, government intervention.

The effects of changing assistance to industries 1.30 Actions taken by governments—federal and State—in pursuit of their various objec­

tives are an important source of structural change in the economy (paragraphs 1.6 to 1.15); and changes in assistance to

industries constitute an important class of government actions which directly affect the industrial structure. In this section

of the chapter, the Commission suggests that industries which are able to cope

with general changes in their economic environment should be well able to cope with the types of changes in government assistance which the Commission is likely to recommend

to enable the community’s resources to be used more efficiently.

1.31 It is sometimes argued that the types of changes in assistance advocated by the Com­ mission will severely disrupt the manufacturing sector. It has also been argued that such

changes will lead to massive unemployment and a decline in the rate of growth of the economy.12 The Commission believes that such assessments are unrealistic, for four main reasons. First, they appear to assume—the Commission believes incorrectly—that recom­

mendations for changes in assistance will involve rates of structural change which have little regard for the economy’s capacity to cope with such change during any given period of

time. Second, they tend to exaggerate the

12For example, see the public submissions to the Com­ mittee to Advise on Policies for Manufacturing Indus­ try (Jackson Committee) by Associated Chambers of Manufactures of Australia (ACMA) and Australian

Industries Development Association. See also W. D. Scott and Co. Pty. Ltd., A Study of Resource Allo­ cation Strategy in Australia, July 1975 (commis­ sioned by ACMA).

7

FIGURE 1.2: FIXED CAPITAL E XPEN D ITU RE IN M ANUFACTU RING IN D U STR IE S, R ELATED TO EFFECTIVE R A T E S O F A S S IS T A N C E ^): A U STR A LIA — 1968-69 TO 1972-73

$’000

I 0 Fixed capital

expenditure

Fixed capital expenditure as a percentage o f value added

600­

5 0 0 .

4 0 0 .

Fixed capital expenditure as a cumulative percentage o f

total for Australia

Per cent

. 30

- 25

- 20

Effective rate o f assistance 1969-70 (per cent)

(a) The bars in the figure show, for example, that for manufacturing industries with an average effective rate of assistance between 185 and 189 per cent in 1969-70, total fixed capital expenditure over the period 1968-69 to 1972-73 amounted to about $50 000, and total fixed capital expenditure as a percentage of total value added over the same period was about 20 per cent. The continuous line shows, for example, that manufacturing industries which had average effective rates of assistance above 50 per cent in 1969-70 accounted for about 4 per cent of all fixed capital expenditure in Australia over the period 1968-69 to 1972-73. Sources: ABS, Manufacturing Establishments, various issues.

Industries Assistance Commission Annual Report, 1973-74.

effects on particular industries of changes in assistance—both in absolute terms and relative to the other changes which are continually occurring in the general environment of the in­

dustries concerned (see paragraphs 1.3 to 1.15). Third, they appear to overlook or misunder­ stand the relationship which exists between the level of assistance and the exchange rate13, and

the implications for industries of more flexible exchange rates. Finally, they appear to ignore the fact that industries in other countries have coped with, and benefited from, the types of

structural reforms which the Commission believes are necessary in Australia.

The rate of structural reform 1.32 Some public discussions of structural reform in Australia appear to ignore the fact that changes in the general structure of assist­

ance for industries have usually been made quite gradually in the past; and to assume that changes in assistance will be made too quickly

in the future. It is desirable, therefore, to examine the changes in assistance which have actually been made in Australia in the recent past.

1.33 During the last two years, the Commis­ sion reported on only a relatively small num­ ber of highly protected industries in the manu­ facturing sector. Moreover, in most cases it

recommended that only small reductions in assistance be made, or that larger reductions in assistance be made gradually over several years (Table 2.2.2). For example, only about half of the ‘tariff revision’ reports signed by the Commission during 1973-74 and 1974-75

related to industries which appeared to have relatively high average nominal rates of assist­ ance. In some of these reports, such as Earth- moving Construction and Materials Handling

Equipment, the average of the rates recom­ mended by the Commission was not much lower than the average of the rates applying

before the Commission’s report. Where larger reductions in assistance were recommended, the Commission usually proposed that such reductions be made gradually (over seven

years in the case of Passenger Motor Vehicles). 1.34 An important feature of the recom­ mendations made by the Commission in reports signed during 1973-74 and 1974-75

was that the range of rates recommended was in almost all cases narrower—and in many cases much narrower—than the range of rates applying before the reports (Table 2.2.2 and 13See Appendix 5.2 in the Commission’s 1974 annual

report.

Figure 2). For example, in nearly two-thirds of its reports, the range of rates recommended was less than two-thirds of the range of rates previously applicable and in about one-third

the range of rates recommended was less than half the range previously applicable.

1.35 In a paper prepared for the Committee to Advise on Policies for Manufacturing Indus­ try (lackson Committee), the Commission

referred to assertions in some of the public submissions to the Committee that resources displaced or diverted from high cost industries would have difficulty in finding employment

opportunities in lower cost activities, and that the adjustment cost involved in such resource movements would outweigh the benefits. After

suggesting that there was no basis for assum­ ing it would recommend structural reforms at an unmanageable rate, the Commission

commented: ‘If it is argued that resources displaced from high cost industries would have dif­ ficulty in finding alternative employment

opportunities, even over the longer term, then it would also have to be argued that resources displaced from any industry would have difficulty in finding alternative employment opportunities. In other words,

it would have to be argued that any struc­ tural change in the economy is likely to produce long run unemployment, which the general policies available to the Gov­

ernment would be incapable of anticipating or correcting. These general policies have succeeded in maintaining a high level of employment in Australia throughout most

of the last three decades or so, during which time considerable structural changes have occurred in the economy. There seems no basis for seriously arguing that

such policies will in future be so ineffective that the Australian economy will hence­ forth be incapable of coping with struc­ tural change of any kind; and that the

maintenance of full employment will depend critically on preservation of the existing distribution of resources among production activities. To avoid all change

for fear of its temporary costs would be to succumb to the tyranny of the status quo.’14 1.36 The Commission recognizes that the rate at which structural reform can proceed in Australia depends on the general level of activity in the economy, the mobility of the

community’s resources, and the ‘. . . avail­ ability of assistance to enable industries to “ Industries Assistance Commission, Implications of the Commission’s approach to the development of

industries, Canberra, June 1975, paragraph 64.

9

adjust to changes in the nature of their acti­ vities and perhaps also in the locations of their plants; and to individuals to train for new jobs or to move to new localities or new indus­

tries’.15 It stated in its 1974 annual report that it would . . attempt to ensure that its

recommendations for change are related to the economy’s capacity to sustain the changes in­ volved . . and that when . . re­

structuring of an industry is spread over several years, changes in the level of activity in the economy may necessitate changes in the rate of restructuring of the industry’.16 The Com­ mission’s general research program is designed to provide the empirical information which will help the Commission make sound judg­

ments about such matters as they arise during the course of its inquiries. An aspect of funda­ mental importance in the Commission’s approach is that no pre-determined time profile

for change has been implied or specified by the Commission.

The effects of structural reform on individual industries

1.37 Changes in Government assistance given to an industry may affect the profitability of investment and opportunities for employment in some or all of the firms comprising that industry. The possible effects on investment

and entrepreneurial behaviour of changes in assistance are discussed in Chapter 3 and, more briefly and in the context of a discussion of structural change generally, in paragraphs 1.27

and 1.28 above. This section of the chapter is therefore concerned mainly with the effects of changes in assistance on employment oppor­ tunities in individual industries. It presents the results of an analysis made by the Commission of the characteristics of the labour force in each major industry sector of the economy,

and of a more detailed analysis of the charac­ teristics of the labour force in each industry within the manufacturing sector (Appendix 1.2, Tables 1.2.6 to 1.2.12 and Figures 1.3 and

1.4).

1.38 Four characteristics of the labour force were examined: male and female employment; migrant employment; the employment of younger and older persons; and the employ­

ment of ‘skilled’ persons (that is, persons who had received formal vocational training, such as trade or technical qualifications, or who had

16Industries Assistance Commission Annual Report, 1973-74, paragraph 139. “ Ibid., paragraphs 140 and 141.

received secondary education). The propor­ tions of persons in each of the above categories, in twelve broad industry sectors covering the economy, are shown in Tables 1.2.6 to 1.2.8.

1.39 The people likely to be most affected in the short term by reforms in the structure of assistance include some of those employed in high cost industries in the manufacturing sector —for example, some of those employed in

manufacturing industries with an average effec­ tive rate of more than 50 per cent. The total number of persons employed in such industries in 1971 was about 0.51 million, or about 42

per cent of all persons employed in the manu­ facturing sector and slightly under 10 per cent of all persons employed in Australia (Table 1.2.9).

1.40 Distinctive characteristics of the labour force in such high cost manufacturing indus­ tries in 1971, relative to other manufacturing

industries, were the high proportions of females and migrants (Tables 1.2.9,

1.2.10 and Figure 1.3). There were,

however, considerable variations in the proportions of such persons between

different industries: the proportions of females to total persons employed ranged from 7 per cent in Steel Pipes and Tubes up to 90 per cent in Women’s and Girls’ Blouses and Frocks; and the proportions of migrants (that is, persons bom overseas) to total persons em­ ployed ranged from 23 per cent in Wooden

Containers up to 65 per cent in Motor Vehicles (Table 1.2.10). The proportion of females who were also migrants tended to be higher in high cost manufacturing industries than in all other industries: these persons accounted for 45 per

cent of the total female labour force in the former, compared with 42 per cent for the manufacturing sector and 26 per cent for all industry sectors.

1.41 The following points are relevant when considering the possible implications for those employed in particular industries of the types of structural reforms advocated by the

Commission: • Although the labour force in high cost manufacturing industries in 1971 con­ tained relatively high- proportions of

females and migrants, and accounted for about 51 and 47 per cent respectively of all such persons employed in the manufacturing sector, these industries

did not account for a high proportion of all such persons employed in Australia. Only 10 per cent of all females in the labour force, and 16 per cent of all

10

FIGURE 1.3: D ISTR IB U TIO N OF F EM A LE S A N D M IG R A N T S A M O N G M ANUFACTU RING IN D U STR IE S R A N K E D B Y EFFECTIVE R A T E O F A S S IS T A N C E ^): A U STR A LIA — 30 JU N E 1971

Migrants® employed in manufacturing industries

Total persons employed in manufacturing industries

, Females employed in manufacturing industries

Effective rate of assistance 1969-70 (per cent)

(а) The figure shows, for example, that manufacturing industries which had average effective rates of assistance above 50 per cent in 1969-70 accounted for about 10 per cent of all females employed in Australia in June 1971. (б) Persons bom overseas. Source: Table 1.2.10.

(a) The figure shows, for example, that manufacturing industries which had average effective rates of assistance above 50 per cent in 1969— 70 accounted for about 14 per cent of all persons with trade or technical qualifications employed in Australia. Definitions of the qualifications and schooling referred to are given in the footnotes to Table 1.2.6.

migrants in the labour force, were

employed in high cost manufacturing industries in that year (Table 1.2.9 and Figure 1.3). • There is great diversity within individual

industries in the products made and pro­ cesses used, in profit performances (Appendix 4.3) and managerial efficiency, and in the assistance required to support the local production of different pro­ ducts. This means that not all the firms or activities within an industry—and hence not all those employed in the industry— will be adversely affected by a reduction in the average level of assistance for the industry. During the course of its cur­

rent review of highly protected industries, the Commission has found that activities within many of these industries can be profitably carried out in Australia with

relatively little assistance. • The Commission reviews industries indi­ vidually, over a period of time. It does not, for example, review all high cost

industries simultaneously. • When industries require time to adjust their operations, the Commission recom­ mends that reductions in assistance be

made gradually, over a period of several years (Table 2.2.2 and paragraph 1.33 above). • The reductions in employment in any

given year due to reductions in industry assistance are likely to be small relative to other changes which occur in employ­ ment. Between July 1973 and June 1975,

the total number of ‘retrenchments due to structural change’ notified to the Com­ monwealth Employment Service through­ out Australia was about 27 000—or about

1 per cent of all those who registered as unemployed during this period (Table 1.3.1). Of the 27 000, the number

awaiting placement at the end of June 1975 was about 7 200—or 3 per cent of the total number of persons then regis­ tered as unemployed. (The number

awaiting placement at the end of July was about 15 900, or 6 per cent of all

persons then registered as unemployed.)

Long term structural reform in perspective 1.42 This chapter has looked at some of

the changes which have occurred in the general environment of Australian industries over the

longer term, and at the ways industries have responded to these changes. It has been con­ cerned particularly with the phenomenon of structural change. The perception of structural

change and its effects by individuals or members of various groups in the community is often distorted by contemporary events and special interests: blame for current and par­

ticular problems often tends to be apportioned somewhat haphazardly between recent and more distant events, or between events which affect the whole community and those which

are specific to individuals or special groups.

1.43 At any moment in time, the industrial structure is being subjected to a variety of short and long run economic forces; and it is sometimes difficult to separate underlying long term structural pressures in the economy from

the short run or cyclical phenomena which are superimposed upon them. Short run considera­ tions always loom large in the thinking of most groups in the community. Under the difficult economic circumstances currently

facing many industries, it is not surprising that short run considerations have tended to dominate public debate on economic matters. It is also not surprising that in this economic

environment various groups in the community have tended to attribute industry problems to reductions in Government assistance.

1.44 It has been suggested, for example, that reductions in assistance have been a major fac­ tor explaining the recent general decline in investment, employment and profitability in manufacturing industry. This appears to largely

ignore other changes in the general economic environment, such as demands for higher wages and their effects on profitability, international economic developments and exchange rate

movements. For example, a recent study17 indicates that the various changes made in Australia’s exchange rate during the last three years had a much greater effect in the short

term on the relationship between the prices of domestically produced goods and the prices of competing imports than the general tariff reduction of 25 per cent in July 1973 (see Appendix 1.3). Another recent study18 has

suggested that wage rises during the last eighteen months or so have had a much larger impact on current profitability, and hence

irR. G. Gregory and L. D. Martin, An analysis of recent relationships between import flows and import prices, paper delivered to ANZAAS Conference, Canberra, 1975. MF. H. Gruen, “ The 25 per cent tariff cut; was it a

mistake?’’, Australian Quarterly, June 1975, pp. 7-20.

13

employment, than recent tariff reductions or the currency revaluations.

1.45 The confusion of cause and effect

alluded to in paragraphs 1.42 and 1.43 is not helpful to understanding the process of indus­ trial development. If the business community is to adjust smoothly and intelligently to the changes which are continually occurring in its

environment, and whenever possible anticipate longer run trends in a way which will be advantageous to the whole community, it is important that the nature of structural change, and its causes and effects, be understood. The Government will then be able to take those opportunities which are available to it to guide development in the direction that the whole community would want it to take.

14

2. Recent Changes in Assistance

2.1 The Industries Assistance Commission Act requires the Commission to report each year on ‘ . . . the assistance provided to

industries by the Australian Government . . . ’ (Section 45). In its first annual report, the Commission described the main forms of assistance which are given to industries in Aus­

tralia (Chapter 2 of that report and appen­ dices), and it provided a detailed picture of the general structure of assistance in Australia —particularly within the manufacturing sector

(Chapter 3 and appendices). It also outlined briefly how this general structure of assistance developed, and described some of its main features. In this report, the Commission has concentrated on describing some of the changes

which have occurred recently in assistance to industries in Australia—particularly in the rural, mining and manufacturing sectors.

2.2 Industries are assisted, or disadvantaged, by a wide range of factors in their general environment: by measures such as tariffs or

subsidies, which are specific to particular types of activities; by other actions of the Govern­ ment, such as fiscal and monetary measures, changes in the exchange rate, and measures

taken by the Government in pursuit of its general economic and social objectives; and by events in the world around them, such as changes in economic conditions in Australia

and overseas countries, and longer term trends in the general economic and trading environ­ ment. This chapter and its appendices are con­ cerned mainly with the assistance which is pro­

vided to industries by those measures of the Government which are directed explicitly at industries.1 2.3 The main forms of assistance provided to

industries by the Government are shown in

T h e effects on industries of some of the other factors mentioned in paragraph 2.2 are discussed in Chapters 1 and 3 and their appendices.

Appendix 2.1. Table 2.1.1 shows the various forms of assistance classified by the way they operate (for example, according to whether they operate through costs, sales revenue, or

income), and in Tables 2.1.2 to 2.1.5 these forms of assistance are allocated to the main sectors of the economy (that is, the rural,

mining, manufacturing and services sectors). When examining Table 2.1.1, it is important to note the qualifications which the Commission made with respect to a similar table in its 1974

annual report (Table 2). The Commission stated in that report that in the interests of orderly presentation and to facilitate discus­ sion, it had 1. . . attempted several pos­

sible approaches to the classification of the measures listed. However, because of the diversity of the assistance measures, no single approach was entirely satisfactory . . .

Some measures operate in more than one of [the ways specified] and it is not always possible to classify particular measures unambiguously. In such cases, the primary incidence of a

measure was used to determine its appropriate class’.2

2.4 The allocation of the various forms of assistance to the main sectors of the economy, in Tables 2.1.2 to 2.1.5, is approximate also. As the Commission noted in its 1974 annual

report, the forms of assistance provided to in­ dustries are diverse *. . . not merely in

their origins and aims, but also in the channels through which they operate and -their ultimate impact.’3 The costs of some assistance measures are ‘. . . inherently difficult to measure

. . . [and] the diversity of forms of assist­ ance makes the measurement of their costs on a comparative basis difficult and sometimes

2Industries Assistance Commission Annual Report, 1973-74, paragraphs 19 and 20. sIbid., paragraph 32.

15

impossible’.4 In addition, the incidence of the different forms of assistance varies greatly: some measures are designed for specific pro­ ducts or for specific industries and others are available to any industry which can satisfy certain general requirements; some general activities of government have been used to provide assistance to specific industries; and some measures designed to assist one industry may discriminate against another.5 For all these reasons, it is difficult to allocate some forms of assistance, or to apportion amounts of assistance, to particular industries or sectors

of the economy. It is therefore difficult at this stage to generalise about the total amounts of assistance afforded each of the main sectors, and recent trends in such assistance.

Rural sector

2.5 Some of the assistance provided to indus­ tries in the rural sector takes the form of direct subsidies, on inputs used or outputs produced, or direct grants (Table 2.1.2). The total value of these direct grants and subsidies in 1974-75 was $72 million, or about half the value of such grants and subsidies in 1973-74. The budget allocation for such assistance in

1975-76 is $27m.

2.6 Reasons for -the recent and expected de­ creases in direct grants and subsidies include:

e A decrease in the phosphate fertilisers bounty, from $67m in 1973-74 to $30m in 1974-75, and an estimated $7m in 1975-76. The Phosphate Fertilizers Bounty Act expired on 31 December 1974

and was not renewed.

• A decrease in butter and cheese bounties, from $18m in 1973-74 to $9m in 1974-75 and an estimated $1.3m in 1975-76. These bounties are being gradually phased out. e A decrease in the subsidy for certain

petroleum products, from $22m in 1973-74 to $2m in 1974-75 and an esti­ mated $0.1 m in 1975-76. The petroleum products prices stabilisation scheme was discontinued from 1 August 1974. This scheme was designed to keep the wholesale prices of certain petroleum

products in rural areas within five cents of capital city prices. • A decrease in payments under the wheat industry stabilisation scheme.

4Ibid., paragraph 38. B Ibid., paragraphs 50-54.

2.7 Other assistance provided to the rural sector includes taxation concessions; loans to marketing authorities at low interest rates; the provision of various services, such as rural re­ search; investment in public works, such as roads and irrigation projects; and assistance for rural reconstruction (Table 2.1.2). Recent

changes in such assistance include a reduction in the taxation concessions for certain forms of capital expenditure and in the depreciation rates allowed for some capital items.

2.8 Inquiries currently being undertaken by the Commission into particular rural indus­ tries, and into certain general forms of assist­ ance in the rural sector, are listed in Tables 4.2.2 and 4.2.3. Reports completed are also shown in those tables and, together with other papers published by the Commission, in Table 4.2.4.

Mining sector

2.9 Most of the assistance provided to the mining sector has taken the form of taxation concessions (Table 2.1.3). Some assistance was also provided indirectly, in the form of government services and, for particular indus­ tries, by way of grants and subsidies. 2.10 The taxation concessions have taken

the following forms: • Certain moneys paid on shares to mining companies were until May 1973 deductible from personal income for taxation

purposes. • Certain capital expenditure by mining companies was until May 1973 deductible from company income in the year the

expenditure was incurred. • Some profits from mining have been exempt from income taxation. Income in the gold mining industry has been tax

exempt and, until June 1974, 20 per cent of the income from prescribed minerals, including bauxite and mineral sands, was not regarded as taxable income. • A 20 per cent investment allowance

existed until 22 August 1973 and accele­ rated depreciation rates were introduced in 1974-75 and have been continued in 1975-76.

Revenue forgone -through tax deductibility of share moneys, deductibility of capital expendi­ ture, and tax exemption of profits, was about 10 per cent of the value of mining production in 1970-71, 12 per cent in 1972-73 and 8 per cent in 1973-74. The fall was due to the

16

gradual reduction or withdrawal of the

concessions. 2.11 Grants and subsidies were paid under three schemes: the pyrites bounty, the petro­ leum search subsidy, and gold mining industry assistance (Table 2.1.3). All of these schemes have now expired. The total value of these

grants and subsidies was $10m in 1972-73 and 1973-74 and $6m in 1974-75, and is expected to be negligible in 1975-76.

2.12 Royalties paid by mining companies to the Australian and State Governments in­ creased from $28m in 1968-69 to nearly $99m in 1973-74, when they were

equivalent to about 4 per cent of the value of mineral production.6 7 More recently, State Government royalty rates have been increased, and an export levy on black coal has been introduced in the Australian Government’s

1975-76 BudgetJ

Manufacturing sector 2.13 Most of the assistance provided to industries in the manufacturing sector takes the form of tariffs and other barriers to

imports which compete with the products of local industries (Table 2.1.4). The Commission published details of the general structure of tariff protection provided to manufacturing industries in its 1974 annual report (Appendix

3.4 of that report), and it provided some supplementary information about this assist­ ance—such as the range of tariff rates afforded individual industries—in Attachment 1 to its

paper for the Jackson Committee (Table 4.2.4). During 1974-75 the Commission began a study of the changes which have occurred

in the protection afforded individual manu­ facturing industries since 1969-70. (The data on rates of protection published in Appendix 3.4 of the Commission’s 1974 annual report related to 1969-70). The results of this study will be published by the Commission in the near future.

2.14 Recent changes in assistance to manu­ facturing industries include: • The general reduction of 25 per cent in all tariffs, made in July 1973.8

'Sources: ABS, Mining Establishments: Details of Operations, 1973-74; and Mineral Production, 1973-74. 7As at 29 September 1975, there is a levy of $6 per tonne for high quality coking coals and $2 per tonne

for other coals (except certain low grade steaming coals). 'See Appendix 1.3 for a discussion of some of the effects of the tariff reduction. See also Report on

Possible Ways of Increasing Imports, AGPS, Canberra 1973.

• Changes in the protection afforded indi­ vidual industries following recommenda­ tions of the Tariff Board or the Commis­ sion (Table 2.2.2 and Figure 2) and,

with respect to temporary protection, of the Temporary Assistance Authority and the Textiles Authority (Appendix 2.3). • Increases in direct grants and subsidies,

mainly as a result of an increase in export incentives and an increase in assistance to shipbuilding (Table 2.1.4).

Changes in assistance recommended by the Tariff Board or the Commission 2.15 During 1973-74 and 1974-75, the Tariff Board and the Commission signed over thirty

reports in which recommendations were made on the tariff protection afforded particular industries (Table 2.2.2 and Figure 2; see also Tables 4.2.1 and 4.2.2). In about half of the industries reviewed, the average level of tariff

protection appeared to be over 30 per cent, before the Commission’s report. The averages of the rates recommended by the Commission,

however, were mostly between 10 and 30 per cent. Summary of Tariff Board or Commission recommendations, 1973-74 and 1974-75

Industries reported on with average rate of protection shown

Average rate of protection

Before Recom-

report m ended

Per cent Per cent Per cent

0-9 . . . . 7 7

10-19 . . . . 26 30

20-29 . . . . 15 52

30-39 . . . . 45 7

40 and above . . . 7 4

100 100

Source: Table 2.2.2.

2.16 An important feature of the recom­ mendations of the Tariff Board and the Commission was that the range of rates recommended was in almost all cases narrower —and in many cases much narrower—than the range of rates applying before the reports

(Figure 2 below). In nearly two-thirds of the reports, the range of rates recommended was less than two-thirds of the range of rates previously applicable, and in about one-third

the range of rates recommended was less than half the range previously applicable.

17

FIGURE 2: RA N G E OF TARIFF RATES RECOMMENDED B Y THE TARIFF BOARD OR INDUSTRIES ASSISTANCE COMMISSION: 1973-74 AN D 1974-75

Tariff Board/IAC Report

Title

Date Date signed released

1973-74: Earthmoving construction and materials handling equipment, etc. 6.8.73 12.2.74

Brandy 17.8.73 6.12.73

Products of the printing industry 21.9.73 4.1.74

Consumer electronic equipment and components Domestic appliances, heating and cooling equipment, etc. Cigarette paper

27.9.73 20.11.73

10.10.73 23.1.74

12.10.73 19.3.74

Fibreboard containers, paper and textile bags 23.11.73 17.2.74

Propylene oxide derivatives 28.12.73 2.4.74

Woven man-made fibre fabrics 17.1.74 4.4.74

Paper 12.2.74 9.4.74

Calcium carbide 17.4.74 30.5.74

Glass and glassware 23.5.74 8.10.74

Steam, gas and water fittings 24.5.74 3.8.74

Industrial tractors 4.6.74 13.8.74

Gloves, mittens or mitts 11.6.74 6.8.74

Food processing machinery, etc. 12.6.74 30.8.74

Polyamide and polyesteryarns 18.6.74 10.9:74

Tyre cord and tyre cord fabrics 25.6.74 10.9.74

1974-75: Foundation garments Wood working and metal working machinery, etc.

28.6.74

28.6.74 26.9.74

Passenger motor vehicles, etc. 10.7.74 11.7.74 Nitrogenous fertilizers 16.7.74 28.11.74

Textile and apparel machinery, and paper making and printing machinery, etc. 23.7.74 12.11.74

Diesel engines exceeding 1500 KW 5.8.74 25.10.74

Mattresses, quilts, eiderdowns and cushions 23.8.74 12.11.74

Commercial motor vehicles 17.9.74 31.10.74

Mushrooms 10.12.74 20.1.75

Second-hand railway locomotives 20.2.75 22.4.75

Fabricated asbestos,etc. 9.4.75 15.5.75

Floor and wall tiles 11.4.75 15.5.75

Tanned and finished leather: dressed fur 24.4.75 20.6.75

Cosmetics and toilet preparations 30.5.75 10.7.75

Leather and leather substitute products 1Ό.6.75 6.8.75

Nil

Nil

1000+

too

Before report

Recommended

I 1 I I I I I I I50 60per cent8018

Import restrictions and temporary assistance

2.17 During the last two years, restrictions in the form of quotas, tariff quotas, and

voluntary export restraints, were imposed on imports competitive with certain locally made products9 (Tables 2.3.2, 2.3.3 and 2.3.4). The general characteristics of the industries which

have been given such assistance are shown in Table 2.3.5. In 1972-73, value added per employee in the industries concerned ranged from $4 613 in the Clothing industry to $8 196 in the Motor Vehicles industry—compared

with $8 281 for all manufacturing industries. In addition, the average effective rate of assist­ ance provided to these industries by tariffs was above the average for the manufacturing sec­ tor in 1969-70.

2.18 The protective effect of quotas is diffi­ cult to measure in ad valorem terms, because the relationship between the prices of the products concerned and the demand for, and supply of, those products is not usually known.

In cases where, for example, the demand for a product is not very sensitive to changes in its price, it is often possible for suppliers to take advantage of the restrictive effects of an import

quota on total supplies of the product by raising their prices.10 * In the short term at least, the scope for such price increases is sometimes considerable, leading to the buying and selling

of quotas and windfall profits to licence holders. In other words, the protective effects of an import quota will sometimes be very great; and in such cases, the ad valorem

equivalent of the quota would be very high. •Probably some recognition of this is implicit in the reason which is frequently advanced for

protection by quotas rather than tariffs— namely, that tariffs at the maximum ‘accept­ able* level would not provide sufficient protection.

2.19 Most of the quotas or other import

restrictions have been recommended by the Textiles Authority or the Temporary Assist­ ance Authority (Appendix 2.3). These Authorities consider in particular trends in the ^‘Quotas’ set an absolute limit to imports of a particu­

lar commodity. Examples are the quotas imposed on imports of passenger motor vehicles and footwear. ‘Tariff quotas’ provide for a higher tariff on imports above a specified quantity. Examples are the tariff

quotas imposed on certain clothing and textile goods and some domestic appliances. ‘Voluntary export restraints’ have been placed on exports of clothing

items to Australia by certain countries, following negotiations initiated by the Australian Government. “ Unless they are inhibited by, for example, the opera­ tions of the Prices Justification Tribunal.

local industry’s output, employment, stocks, and trends in imports. If an industry is given temporary assistance following an inquiry by one of these Authorities, it is referred to the Commission for a report on the assistance

which should be given to the industry over the longer term.

2.20 The temporary assistance provided to some industries has been in force for consider­ able periods—often exceeding two years (Table 2.3.5). Furthermore, some industries have had intermittent temporary protection for quite long periods. For example, polyester yams have had temporary protection for nearly

half of the ten years that such yarns have been produced in Australia: from June 1967 to April 1970; from September 1970 to Novem­ ber 1971; and since December 1974.11

Dumping 2.21 During the second half of 1974 there was a sharp increase in the number of com­ plaints about dumped imports. In general, anti-dumping duties are imposed if the price of an imported good is less than the price of that good for home consumption in the export­ ing country (that is, less than ‘normal value’), and the imports are threatening or causing material injury to local industry. The anti­

dumping duty imposed is equal to the differ­ ence between the normal value and the export price. In more than half of all instances re­ ported, the applicants for anti-dumping duties

were in the Chemical, Petroleum and Coal Products industries; Non-metallic Mineral Pro­ ducts industries; and Machinery and Equip­ ment industries (Appendix 2.4). The country

of origin complained of was usually a devel­ oped country—the United States of America, the United Kingdom or Japan being cited as a source of dumped goods in 60 per cent of

complaints. In those cases where it has been established that dumping has been occurring, and normal values have been determined, pro­ vision for the imposition of anti-dumping

duties has been applied on average for seven years, with a range of one to thirteen years.

2.22 Legislation was recently passed to give effect to the Government’s decision to adopt the GATT Anti-dumping Code (which is the

“ Although the Commission may have made a recom­ mendation on the long run protection for an industry, that industry may still apply for temporary assistance. Between July 1962 and June 1975, more than one-

third of temporary assistance reports were made less than two years after relevant Tariff Board or Com­ mission reports.

19

accepted international system to counter dump­ ing practice). The report of an inter­

departmental committee on the feasibility of Australia’s acceding to the Code concluded that accession would not inhibit Australia from taking effective measures to counter what it

considers to be actionable dumping. The legis­ lation provides, amongst other things, for the imposition of anti-dumping duties without prior

inquiry and report by the Commission.

Customs by-laws 2.23 In May 1975 the Government published a Green Paper on by-law policy. The Commis­ sion is currently examining the Green Paper.

Adjustment assistance 2.24 During the last few years, a number of measures have been introduced by the Govern­ ment to assist industries and the people em­

ployed in them to adjust to certain structural changes in the economy (Table 2.2.3). For example, the Structural Adjustment Assistance

Program was introduced to help firms to adjust to the effects of Government actions such as the 25 per cent tariff cut. The program pro­ vides for closure compensation payments, con­

sultancy grants and loan guarantees.

2.25 Up to 14 July 1975, eleven payments, totalling $301 000, were made for closure com­ pensation under the general provisions of the program (Table 2.2.3). All eleven recipients

were in the Clothing and Electronics industries. Up to the same date, another six payments, totalling $348 000, were made to fruit juice manufacturers, following the elimination of the fruit juice sales tax concession; and $49 000 was paid to milk vendors as compensation for the phasing out of the free school milk scheme.

2.26 Included in the Structural Adjustment Assistance Program is provision for Special Assistance for Non-Metropolitan Areas (SANMA). The objective of SANMA is pri­

marily to assist employment in firms. Hie scheme provides for production subsidies and capital grants to firms which are adversely affected by general economic conditions. Up to

14 July 1975, forty grants had been made under the scheme, at a total cost of $5m.

Of these, twenty-three were made to firms in the Textiles industry, and twelve in the

Apparel industry.

2.27 Adjustment assistance has also been paid to employees, under the Regional Employ­ ment Development Scheme (RED) and the Income Maintenance Scheme. Total budget expenditure under these two schemes in

1974-75 was $11 lm, and the 1975-76

budget allocation is $142m. The object of the RED scheme has been to relieve struc­ tural unemployment by encouraging labour intensive projects in areas of high unemploy­

ment. The program has covered projects in both metropolitan and non-metropolitan areas, and has employed persons eligible for unem­ ployment benefits, at wages equivalent to those

provided for in the awards applying to the project concerned. No new projects are being approved under the RED scheme, but

$135m has been allocated in the 1975-76 Budget to cover previously approved projects. Under the Income Maintenance Scheme per­ sons retrenched as a result of prescribed cases of structural change receive income mainten­

ance for six months. The payments are based on the individual’s average weekly earnings over the preceding six months.

20

3. The Commission’s Approach to the Development of Industries

3.1 The Industries Assistance Commission Act requires the Commission to have regard to national economic and social objectives when it is advising the Government on assistance to

industries. In its first annual report, the Com­ mission outlined how it proposed to do this. In this chapter, the Commission elaborates its approach to industry development.

3.2 The development of industries is a long term objective. Thus an industry development policy should be distinguished from policies for meeting the short term problems which periodi­

cally arise in the economy. Nevertheless, the Commission is very conscious of the fact that it is presenting this report at a time of

abnormally high inflation and unemployment. Because the current general downturn in the economy has checked the development of industries, there has been increasing pressure

to insulate particular industries from overseas competition. While the provision of tariffs, subsidies or quotas can help to maintain employment in particular industries, such

measures cannot solve general, economy-wide, unemployment and inflation problems. Further­ more, depending on how long they are in force,

these measures may tend to postpone a move­ ment of resources which is in the community’s long term interests.

3.3 The ultimate aim of the Commission’s approach is to foster development that will ‘ . . . improve and promote the well-being of the people of Australia’. The Commission is therefore concerned with the long term

development of industries in all sectors of the eco n o m y. It cannot be concerned with the interests of one sector only. The approach adopted by the Commission explicitly recog­

nizes two important facts: • The community’s resources are limited; normally there is a shortage of labour, particularly skilled labour, and of invest­

ment funds.

• Over the longer term, the community’s basic resources of labour and capital are mobile throughout the economy. Thus any strategy for industrial development

will necessarily influence the movement of resources within and between industries and sectors.

3.4 The capacity of an industry development strategy to improve the well-being of the com­ munity depends largely on the rate at which investment (including foreign investment) and the quality of the workforce grow, on dis­ coveries of new resources, on the allocation of resources among different activities, and on the utilization of resources in those activities. The general policies of the Government will obviously affect these factors—especially the total supply and quality of resources available to the community. For example, education policies will influence the quality of the work­ force; monetary and fiscal policies will influence the general level of activity in the economy at any given , time and thus the degree to which the resources available are utilized by indus­ tries. The Government’s industry strategy, and the method of implementing that strategy, will have a particular bearing on the efficiency with which resources are used, by influencing the pattern of industrial development and the enterprise and initiative shown by investors and producers.

3.5 Any industry development strategy must directly or indirectly involve the provision of assistance to some industries, and will there­ fore influence the movement of resources in

the economy. The main reason why industries seek assistance from the Government, and the principal basis on which it has been provided, is to help them to meet competition in the

markets for their products. But, more funda­ mentally, assistance helps individual industries to attract and hold resources. Where an indus­

try is given assistance this helps it to produce

21

and market its output; and the returns from marketing its output enable it to attract or retain resources. Assistance therefore helps industries to obtain the inputs of materials,

capital, and labour which they require, and for which they must bid in competition with other potential users of those resources. Thus if an industry is given a high effective rate of

assistance, it is being helped at the expense of industries with lower assistance.

3.6 The Commission’s approach will encour­ age the development of industries in Australia in a way which promotes the interests of the community since it will encourage the move­ ment of resources, particularly new resources, into those activities which use them most efficiently. It will encourage enterprise and initiative among investors and producers. It will assist industries to foresee future changes in their trading environment and to adjust to such changes. The approach adopted by the Commission has several interdependent parts which can be stated briefly in terms of the following propositions:

• First, a more efficient use of resources (labour, capital, land and materials) is desirable to increase the welfare of Australians. • Second, the efficiency of resource use,

and the welfare of the Australian com­ munity as a whole, will be improved by the development of low cost industries. And because resources are not unlimited this will involve a gradual reduction in

the high assistance now enjoyed by some industries. • Third, the rate at which high levels of assistance are reduced must take account

of the ability of the economy to sustain any structural changes that may be

involved.1 • Fourth, there is a need for greater

emphasis in industry development policy on general measures to improve the mobility, quality and productivity of resources. In particular, greater emphasis

should be placed on the need to study in advance likely changes in the future environment for industry development;

and a greater proportion of available assistance should be directed at facilitat­ ing adjustment to change and the en­ couragement of innovation.

lIn this chapter, references to high and low assistance are, unless otherwise indicated by the context, in terms of effective rates.

• Finally, the process of formulating advice on industry development should not only be well informed, but should also be even-handed and impartial, and should be seen to be so.

3.7 During the past year, there has been a considerable amount of public discussion of longer term policies for the development of industries. This discussion has been conducted against the background of serious short term difficulties in the economy as a whole. Much of this discussion seemed to be related in some way to the various interdependent parts of the Commission’s approach to the develop­ ment of industries, as outlined above. Each of these elements of the Commission’s approach is discussed below.

The benefits of more efficient resource use Efficiency and welfare

3.8 It is sometimes suggested that the Com­ mission is overly concerned with efficiency in resource use and other ‘narrow’ economic objectives, and insufficiently attentive to broad social objectives. Such statements show

a misunderstanding of the relationship between efficiency in resource use and the general wel­ fare of the community.

3.9 Efficiency in resource use is not a narrow objective. Resources are used most efficiently when they make their maximum contribution to the well-being of the population; that is,

when the people’s demands—individual and collective—for goods, services and intangible factors which contribute to the genera] quality

of life are satisfied to the maximum extent possible, within the constraints of resources available.

3.10 Improving economic efficiency is im­ portant not as an end in itself but as the

means toward enabling the population, individually and collectively, to do more of the things it wants to do. In fact, improving the efficiency of resource use is fundamental to the achievement of most of the community’s

social objectives. These objectives are met by the provision of various services, such as education, health, social security, defence, improvement in the environment and so on. The availability of such services to the com­

munity is just as much a product of the

economic system as are private goods and services. Both types of need must be met

22

from the resources available to the com­ munity. Any action which increases the effi­ ciency with which resources are used conse­ quently increases the capacity of the com­

munity to achieve both its social and its

economic objectives. The pursuit of efficient resource use in industry development is therefore not competitive with or contrary to the pursuit of the community’s broad ‘social’ objectives—it enables these objectives to be

achieved to a greater extent than would other­ wise be possible.

3.11 To achieve this efficiency in resource use the basic thrust of the Commission’s work is to encourage the development of industries

best suited to Australia’s particular environ­ ment and resource endowment. This recogni­ tion of the importance of economic efficiency in the criteria for industry development does

not imply any lack of concern for non­

economic objectives, such as improving work­ ing conditions in Australian industry. Such non-economic objectives are separate from the criteria for industry development, and should be pursued separately. If such non-economic

objectives were introduced directly into the criteria for industry development, the resulting confusion of priorities and decline in the efficiency of resource use would actually re­

duce the capacity of the economy to achieve the community’s goals.

The costs of inefficient resource use

3.12 There are grounds for believing that during at least the last decade or so, the

general structure of assistance in Australia has inhibited rather than encouraged expansion of the economy. According to the OECD, the rate of economic growth in Australia, as meas­

ured by the increase in gross domestic product per head, has been lower than that in most OECD countries during the period 1960-1973, despite Australia’s relatively high rate of capi­ tal investment (Table 3.6). Only three of the

twenty-three OECD countries had an average annual rate of growth in GDP per head equal to or lower than Australia’s during this period; and Australia’s ranking in GDP per head

declined from eighth in 1960 to eleventh in 1973. Only the United Kingdom declined in ranking by more than this. When analysing the reasons for Australia’s relatively poor per­

formance in growth of GDP per head, the OECD commented that *. . . inability to take advantage of economies of scale may be part of the explanation . . . {and that]

tariff policy may have tended to deprive Australia of potential economies of scale’.2

3.13 The costs of a protectionist policy stem from the effects it has on the efficiency with which the community’s resources are used; it encourages the use of resources in activities

which are relatively unsuited to Australia’s general economic and trading environment; and it reduces the pressures on individual pro­ ducers to use their resources as efficiently as possible. The first effect follows inevitably from

the nature of protection, and the reasons for which it is normally sought. In general, there is a relationship between the level of tariff pro­ tection or other assistance required by an

industry, to enable it to earn a reasonable rate of profit in competition with other indus­ tries, and the relative efficiency with which it uses the community’s resources. The less the

production of particular goods is suited to Aus­ tralia’s resource endowments and trading environment, the more assistance producers of

the goods concerned are likely to require to compete profitably with producers in other countries where conditions are more suited, relatively, to producing the goods concerned. Differences in the levels of assistance provided

for industries thus reflect the extent to which resources have been encouraged to move into activities in which they will be used less effi­ ciently, from the community’s point of view.3

3.14 If assistance is readily available the pressure on producers in all sectors to use resources as efficiently as possible is reduced

2OECD, Economic Surveys, Australia, December 1972, pp 23, 25. Also see Appendix 3 for a discussion of the gains from reducing protection. 3If an industry generates unusually important external

benefits or costs, the level of assistance it requires in order to maintain its present size might not be an adequate indicator * of the relative efficiency with which it uses resources. An example of an external benefit which might escape full recognition by con­

ventional accounting systems and pricing arrange­ ments is the research undertaken by an industry; other industries may receive benefits without having to pay for them. It should be noted, however, that almost

every industry has some external effects which advan­ tage some industries and disadvantage others. In addition, assistance to encourage activities which generate external benefits should, if possible, be

directed at their source. For example, in the case of research, any assistance provided should generally be aimed directly at encouraging an industry’s research activities, rather than at assisting the industry to increase its size or output—because its size may be only indirectly related to its research activity. (The

relationship between levels of assistance and efficiency in resource use is discussed in more detail in Appendix 5.1 of the Commission’s 1974 annual report.)

23

because it generates an expectation among pro­ ducers that ‘the Government will bail us out of trouble’. When such an expectation is held, producers will consequently have a somewhat

different attitude toward the need to limit their product range to those goods they can produce competitively, toward the need to minimize costs and toward the need for careful evalua­ tion of alternative avenues of investment, than they would in a situation in which they carried

greater responsibility for the outcome of their decisions. Furthermore, some of the time and energy which they might otherwise have devoted to improving their productivity will be spent in seeking assistance from the

Government.

3.15 The extent to which producers in Aus­ tralia view assistance from the Government as a right, and assume that assistance which is in

their view ‘necessary’ will sooner or later be provided, is obviously difficult to assess. There are, however, grounds for believing that such an attitude has been, and still is, fairly com­

mon. Much of the opposition to the Commis­ sion’s general approach to industry develop­ ment can probably be attributed to the fact that the Commission has questioned the propo­

sition that ‘need’ should be a sufficient criterion for determining the assistance to individual industries. More importantly, perhaps, the present structure of assistance to industries in Australia indicates that an expectation that

assistance will be provided on the basis of ‘need’ has been justified in the past. A striking feature of the present structure of assistance for the manufacturing sector, for example, is the wide variation in the levels of assistance for different industries and for different activi­ ties within individual industries.4 These varia­ tions can be attributed largely to differences in the degree of import competition encoun­ tered by different activities and industries. In other words, they indicate that over the period during which the present structure of assist­ ance developed, Governments tended to pro­ vide assistance on the basis of need, with little regard to efficiency in the use of resources.

3.16 Apart from its long term effects on the general dynamism of private enterprise, a protectionist approach to industry development discourages the efficient use of resources by individual producers by inhibiting the achieve­

4See Table 3.4.1 in the Commission’s 1974 annual report and Attachment 1 to the Commission’s paper for the Jackson Committee (‘Implications of the Com­ mission’s approach to the development of industries’).

ment of economies of scale and specialisation. There is considerable diversity within most industries in Australia in the sizes of firms, the products made, the materials and technologies used, managerial efficiency, and in perform­ ance. This diversity in economic performance is to some extent determined by the assistance afforded an industry. For example, the pro­ vision of assistance to an industry simply on

a needs basis frequently encourages a pro­ liferation in the number of producers. Even when the Australian market is large enough for minimum efficient scale of production to be

achieved, it is not uncommon to find several plants producing similar products at output levels significantly below that scale. In some cases this proliferation of plants has been a major reason for the cost disadvantages incurred by the domestic firms, and thus a major reason why assistance is required to meet competition from imports. There is a

circularity of effects here: the number of plants in the industry increases to the extent allowed by the assistance available; this results in higher costs of production, which in turn causes the industry to argue for the maintenance of, and sometimes for increases in its assistance, in order to support the particular structure of plants which has developed. (Note here the OECD’s comments, quoted in paragraph 3.12 above).

3.17 The amount of assistance afforded an industry, in absolute terms, is of less signifi­ cance for efficient resource use than its effective rate of assistance relative to that of other indus­ tries. Many industries in Australia which receive little or no assistance are in fact being penalised by the present structure of assistance. Several major rural and mining industries as well as some manufacturing industries are in

this position. Industries which receive high effective rates of assistance are being helped at the expense of industries with lower rates of assistance. One industry can be assisted

only at the expense of other industries. If all import-competing and exporting industries were assisted equally, this would be broadly equivalent to assisting none5; the main difference is that equal assistance to all would involve administrative costs in raising taxes

(including tariffs) and in paying subsidies.

B Uniform tariffs and equal uniform export subsidies (with no other forms of assistance) would be equiva­ lent to a free trade situation. This equivalence was explained in Appendix 5.2 of the Commission’s 1974 annual report.

24

The path to better resource use Alternative approaches

3.18 There are a number of ways in which the efficiency of resource use might -be improved. One important component of the Commission’s approach, which is discussed

later in this chapter, is the need for greater emphasis to be placed on general economy­ wide measures to improve the mobility, quality and productivity of resources. Within the con­

text of strategies relating to assistance for indi­ vidual industries, however, there are in principle three options which could improve efficiency in resource use. First, high assistance

could be reduced. Second, low assistance could be increased. This latter option would involve according tariffs and subsidies for the first time to industries that did not have them before. Third, these approaches could operate indivi­

dually or both at the same time. The general aim would be to reduce the ‘variance’ in assist­ ance accorded different industries and sectors.6

3.19 The question of whether low cost indus­ tries should be assisted raises a number of com­ plex issues. The Commission discussed the major difficulties involved in extending assist­

ance to low cost industries in Appendix 5.5 of its 1974 annual report. The Commission suggested that there would be practical problems in extending assistance to low cost

industries whether that action was complete or partial. These include the budgetary implica­ tions of export subsidies, the consequences of

compensating some industries before others, the possibility of retaliatory trade action, and possible problems of GATT contravention in payment of export subsidies.

3.20 The Commission still considers that these difficulties cast very serious doubts on the wisdom of embarking upon any general strategy aimed at attempting to narrow the

range of protection levels by raising assistance to low cost industries. The approach which the Commission considers is preferable involves a gradual reduction of levels of assistance which

are relatively high—rather than raising those which are relatively low.

“The second possible approach might appear to be a protectionist strategy, but as noted in paragraph 3.17, if all import-competing and exporting industries were assisted equally, this would be broadly equivalent to

assisting none. An important characteristic of a pro­ tectionist strategy is its selectivity—such an approach must involve the provision of assistance to some industries at the expense of others.

3.21 In rejecting a general strategy of raising assistance to low cost industries, the Commis­ sion has not, of course, precluded the possi­ bility—for example, on resource allocation

grounds—that it may recommend the provision of additional assistance to a low cost industry or the provision of assistance to an industry which has previously received no assistance.

For example, short term assistance may be justified in order to hold resources which are necessary for the long term development of an industry which is on average and over the long

term likely to be low cost. In such cases assist­ ance may avoid the costs of unnecessary resource movements.

3.22 When the impact of changes in assistance is to attract additional resources into an indus­ try receiving low assistance, or to release resources from an industry receiving high assistance into industries receiving low assist­

ance, there will usually be a gain to the com­ munity. It should be noted, however, that evidence that an industry is disadvantaged by the present structure of assistance, and would

be larger than its present size in a free trade situation, does not necessarily constitute proof that the benefits of increased assistance to the industry concerned are likely to exceed the costs. For example, while it may be clear that a particular industry is disadvantaged by the

present general structure of assistance to indus­ tries, increases in assistance to the industry con­ cerned may result in resources being drawn predominantly away from other industries which are even more disadvantaged. Assisting

some low cost industries will reduce the resource distortions relative to the high cost industries, but could create greater

distortions relative to those industries that do not receive assistance. A further

complication wquld be that in a number of rural industries the amount of

assistance provided by home consumption price schemes and price stabilisation arrange­ ments varies markedly over time, as a result of both short term fluctuations and long term

trends in export prices.

3.23 In many reports on particular inquiries the Commission has recommended a common rate of assistance for related groups of pro­ ducts, in order to overcome possible substiti- tion problems in production within and between

industries.7 * * This is because if one activity is

T For example, in the rural sector, there is considerable resource mobility between the cereals, sheep and cattle industries.

25

24059/75—2

more highly assisted than another which employs common resources (for example, labour with particular skills and specialised capital equipment) resources will tend to move into the more highly assisted activity even

though this activity may be less suited to Aus­ tralian conditions.

3.24 A general policy of reducing high assist­ ance will benefit low cost import-competing and exporting industries that are disadvantaged by the present structure of industry assistance. It will do this by enabling these industries to pur­ chase some inputs at a lower price than is possible under the present protective structure. More importantly, when such movements affect a substantial proportion of the import-compet­ ing sector they will also lead to (or allow the maintenance of) a lower exchange rate than would otherwise be the case. This will enable low cost industries to compete more success­ fully in the domestic and overseas markets for their products.

3.25 The relationship between reductions in protection, exchange rate changes and the creation of an economic environment favour­ able to the growth of low cost industries does

not yet appear to be widely understood.8 Reductions in tariffs and other barriers to trade accorded relatively highly protected industries will usually result in a larger inflow

of imports of the products concerned. This can only be accommodated, in the long term, by the growth of relatively efficient industries, which are either export oriented or able to compete effectively with imports with little or no assistance.9 In recent years Australian Governments have been more willing to adjust the exchange rate in order to meet emerging disequilibrium in the balance of payments; there is consequently no need to maintain high tariffs to preserve external balance. As tariffs are reduced, the exchange rate can be devalued.10 As the exchange rate is devalued, the economic climate will automatically become more favourable to the development

of low cost industries—they will be better able to meet import competition in their domestic markets and to compete more successfully in overseas markets.

sThe relationship between the level of assistance to industry and the exchange rate was explained in Appendix 5.2 of the Commission’s 1974 annual report. “In the short term, higher imports could be accommo­

dated by a run-down in international reserves or by increased borrowing overseas. However this would merely postpone inevitable long term adjustment.

The tariff review process 3.26 There are several possible approaches to reducing high assistance. The approach that was adopted by the Tariff Board and which has

also been embodied as part of the Commis­ sion’s broader inquiry program is the Tariff Review. Early in 1971 the Government decided to undertake a review of the Tariff as had

been suggested by the Tariff Board in its annual reports since 1966-67. Until that time, tariff making was mainly on an ‘ad hoc’ basis; that is, it was primarily in response to inter­ ested parties seeking greater protection. The overall structure of protection was fortuitous and in some respects anomalous. It was pos­

sible for different sections of some industries to have different levels and forms of protection. The Board considered that there was a need

to encourage more resources into low cost activities and to this end, proposed a systematic review of the Tariff. In essence, the criteria that were considered when determining the sequence in which industries were reviewed

were: the average protection of the industries concerned; the size of the industries, in terms of value of production; the period since they were last reviewed; and the nature of the indus­ tries’ outputs (that is, whether ‘basic materials’ or ‘intermediate’ or ‘finished’ products).

3.27 The Tariff Review is a vital mechanism for examining highly protected activities within the manufacturing sector. The Review is identifying activities which have unused tariff protection, activities which could be operated profitably with relatively low assistance if structural changes were made, and those pockets of activity which are highly protected and have little prospect of becoming competi­ tive. It is to these areas that special attention needs to be given, to encourage adjustments

that are in the interests of the community as a whole. Because the Review is structured to cover products and processes which are tech­ nically and economically interrelated, it has facilitated, in inquiries into particular indus­

tries, assessments of the economic effects of

I0It would be more correct to say that, other things being equal, the exchange rate will be lower as pro­ tection is reduced. In a context where many factors which influence the balance of payments situation are changing simultaneously, the exchange rate might

actually be devalued to a larger extent, an exchange rate appreciation might be avoided, or the exchange rate might be appreciated to a smaller extent. In any case, if the exchange rate is adjusted to maintain external balance, reduction in protection will result

in a lower exchange rate than would prevail if current protection levels were maintained.

26

the recommendations, the nature of the struct­ ural changes required and the ability of the industry to cope with those changes.

3.28 The current Tariff Review is scheduled for completion in 1978. The Commission intends to analyse alternative proposals for con­ tinuing action in relation to tariff protection

when it is completed. There will be included in the 1976 annual report, proposals for on­ going action in relation to assistance to indus­ tries in all sectors of the economy beyond 1978.

Such proposals will take into account the new situation brought about by a more flexible approach to exchange rates and progress made by the Commission in reviewing non-tariff

assistance as part of its normal inquiry pro­ cedures.11 Account will also be taken of pro­ gress which has by then been made on such

matters as adjustment assistance, manpower policy, including retraining, and other general policies to encourage adaptation and innova­ tion in Australian industries.

Factors affecting the rate of adjustment 3.29 Actions to improve the efficiency of resource use—by changing the assistance afforded some industries—often involve

temporary reductions of welfare for some groups in the community, in the form of adjust­ ment costs. Since these adjustment costs are usually very concentrated and highly visible,

whereas the benefits of such actions are widely spread and much less visible, there is some­ times a tendency to assume that only the costs have any reality.

3.30 The nature and extent of the adjustment costs associated with proposed changes in the general structure of assistance are very rele­ vant when considering the timing of such changes and the rate at which they should

occur. Economic efficiency criteria would recommend against any reduction in industry assistance if, on a present value basis, adjust­ ment costs exceeded the expected benefits. Before proposing reductions in assistance for

particular industries the Commission does, of course, give careful consideration to the social as well as the economic impact of implement­ ing its recommendations.

3.31 Three factors should influence the rate at which structural change is induced during a particular period: • The level of activity in the economy. *

’’Table 2.1.1 lists non-tariff forms of assistance and Table 4.2.2 lists references being examined by the Commission.

• The mobility of the community’s

resources.

• The availability of well-defined assistance measures to enable industries and indi­ viduals to adjust to changes.

3.32 When unemployment is high, workers displaced by structural change cannot be as readily absorbed into other activities as under

more normal economic conditions. Similarly, opportunities for profitable employment of capital are limited during recessions. Apart from the more general case for provision of temporary assistance to low cost industries which are in danger of losing resources neces­

sary for their long term development (see para­ graph 3.21), there may be a case for the pro­ vision of temporary assistance to high cost industries aimed at slowing down the rate of adjustment when there is high unemployment —because it may be better for people to be employed even in a relatively high cost activity than to be out of work. It cannot be assumed, however, that temporary protection to enable an individual industry to avoid retrenchment

of a number of workers will have a corre­ sponding effect on total unemployment. Temporary protection reduces import com­ petition but it raises prices to consumers.

3.33 Many of the structural problems that exist in the economy, including the long term problems which some high cost industries experience in retaining resources, become more

apparent in times of economic downturn. The Temporary Assistance Authority and the Tex­ tiles Authority have recently considered a large number of requests for assistance from high cost industries whose current difficulties

to a large extent reflect long term structural problems. The durability of temporary assist­ ance provided to a number of high cost indus­ tries in the past indicates that there is a very real risk that short term problems, and assist­

ance given because of them, will be allowed to inhibit adjustments necessary for long term improvement in the allocation of resources and the welfare of the community. The Commis­

sion believes that this should not be allowed to happen. Unless resources can be induced to move out of highly protected industries, the present structural problems are likely to per­

sist and the pressures to grant ever more assist­ ance are likely to continue. For this reason, in the case of high cost industries that are

experiencing difficulties due to general economic circumstances, the provision of

27

measures to assist the adjustment to change, that will benefit the community in the long term, is appropriate. The Commission places heavy emphasis on the need for well-defined assistance measures to enable industries and individuals to adjust to change.

Approaches to assist adjustment and encourage innovation 3.34 The Commission considers that a greater proportion of available assistance should be directed to facilitating adjustment to change and to encouraging innovation with the general objective of improving the quality and mobility of resources.

Adjustment to change 3.35 The need for assistance to improve the mobility of resources arises because of the nature of structural change. Although much structural change is occurring continuously due to a variety of economic and non-economic forces, and it is apparent that most of this change has been within the normal adaptive capacity of the economy, the Commission con­ siders that it is essential that measures exist to assist both individuals and industries to cope with changing economic conditions. It sees adjustment assistance as being desirable on equity grounds, where undue hardship is likely to be associated with adjustment, and on efficiency grounds where market imperfections impede adjustment. Government intervention in such circumstances can be seen as a way of ensuring that the costs of change which will benefit the community as a whole fall in some measure upon that community. It may also assist in reducing resistance to changes which, although benefiting the wider community, impose immediate costs on specific groups.

3.36. The Commission notes that machinery is being established to assist adjustment by both firms and individuals to structural change. The

Commission is also presently inquiring into questions of structural change in its inquiry into rural reconstruction. The development of measures for facilitating structural changes is complementary to the Commission’s approach

and will influence the rate at which it can be implemented.

3.37 Specific measures to assist adjustment of firms and individuals are an important element in a strategy to facilitate adjustment to structural change, but there is also a need to reduce confusion and uncertainty resulting from lack of knowledge about long term

intentions and policies of Governments and about changes that are occurring, or appear likely to Occur, in the economy. The Com­ mission is conscious of its responsibilities in this regard. In its annual reports it endeavours to provide clear explanations of its general criteria, to guide potential investors and exist­ ing producers in all sectors of the economy. The Tariff Review Program indicates to industries, well in advance of the event, when they will be reviewed by the Commission. The Commission also publishes long run demand forecasts for the major industries it reviews and provides information, in its reports on individual industries, about the likely impact of its recommendations on the industries and people directly or indirectly affected.

Research on future changes 3.38 There is also a need to study in

advance the likely changes in the future environment for industry development in Australia—changes which will occur in part as a consequence of natural factors, such as workforce and population trends—so that these changes can be anticipated. The Com­

mission has concluded that more of its work should be concerned with identifying, study­ ing and providing well-documented advice on these issues to serve as a basis for government

action and to assist industry to anticipate change and plan more effectively for the future. It is apparent that such research and advice must be economy-wide in scope since the origin and impact of particular causes of structural change are not confined to one sector. Just as it is not possible to have

effective and properly co-ordinated manpower policies which deal only with one sector, it is not possible to deal effectively with other forms of industry change in a piecemeal way —by developing separate research programs and policies for each sector.

3.39 The Commission has developed some elements of such a general research program and, recognizing the interdependence which exists between · change in different sectors of

the economy and between related policies, is proceeding with that research program, wherever appropriate, on a joint basis with the government institutions responsible for related policies. A number of organisations, representing a wide range of interests in the community, have been invited to become

directly involved in those aspects of the Com­ mission’s general research program which are

28

concerned with the impact of future change on Australian industries.

3.40 The Commission’s approach recognizes that change is a problem for the community as a whole. For this reason the Commission

is undertaking a study on resource mobility. The first results of this study are presented in Chapter i and Appendix 1.2. A further

research project that the Commission is currently undertaking is a joint study with the Department of Labor and Immigration on the Impact of Demographic Change on Industry Structure in Australia. The study is designed to make it possible to assess not only

the resource allocative effects of changes now occurring in the workforce (particularly its sex and skill composition) and in the patterns

of demand for public and private goods and services as a result of changes in the age structure of the population (for example, the demand for housing services and for new

residential construction), but also the effects of changes on the development of industry. The study should provide comprehensive and compatible information for both manpower

policy and industry development. As a result it should help the development and implemen­ tation of manpower policy by relating more clearly the supply of particular labour skills

to the demand for these skills, and it will provide a basis for the Commission to

recommend positive measures which may be necessary to further improve the quality, mobility and productivity of both capital and labour resources. It will therefore provide

insights into the future environment for industry development in Australia, and into important sources of structural change. A more detailed description of this study will be published separately.

3.41 These studies will help fulfil the Com­ mission’s commitment to assess and report on the scope and capacity for change within

Australian industry.

Action to improve productivity of resources 3.42 One way of improving the quality and productivity of resources is through the encouragement of research and innovation.

This is one form of general assistance which was specifically identified by the Commission last year in its first annual report as warrant­ ing further examination.12 In relation to this

general measure, the Commission reported to the Government that: 1 5

151974 annual report, paragraphs 126 to 133.

‘This assistance needs to be adequate and subject to the same inquiry process (and be assessed against the same criteria) as other forms of assistance.’13 3.43 The need for a careful examination of the existing range of measures which provide

assistance to innovation and research was con­ firmed in the OECD Examiners’ Report on science and technology in Australia.14 This report recommended a thorough revision of the arrangements for aiding industrial re­ search. In particular, it concluded:

‘The need for unifying policies for Aus­ tralian science seems to us to be para­ mount, additionally because of the com­ plexity of research organisation and

activity in the country.’1® 3.44 Following the OECD report, the A u ­ stralian Government issued a White Paper on science and technology in Australia.16 This report agreed with the OECD sentiments and further stated that:

‘ . . . more attention should be given to the result achieved (output) compared with the resources used (input)’17 and,

‘. . . there are cases where R and D

is starved for resources, or perhaps neglected altogether, to the direct detriment of the organisation and perhaps to the indirect detriment of the nation.’18

3.45 There are good reasons for conducting a comprehensive review of the various assis­ tance measures for innovation and research. A large number of schemes and government

institutions concerned with innovation are operating independently of each other, with­ out any common framework or criteria to ensure that collectively they are contributing to the overall goals of industry development

policy in Australia. An extensive and complex set of government measures is aimed at im­ proving the technological and innovative capacity of Australian industry. Important

among these is the patents systems, which is a principal means by which most countries pro­ vide incentives and protection for private in­ ventive activity.

3.46 Apart from the operation of the patents system, which in Australia does not involve ,3Ibid., paragraph 131. ' Of CD Examiners* Report on Science and Technology

in Australia, AGPS, Canberra, 1974. lsIbid., p. 37. 16Science and Technology in the Service of Society and the Framework for Australian Government Planning,

AGPS, 1975. 17Ibid., p. 2. 18Ibid., p.2.

29

direct financial assistance, a very high propor­ tion of total research expenditure is funded directly by the Government. These government disbursements are provided through a wide variety of sources and programs, some of which

are based on research and development carried out in government agencies; others carried out on behalf of the Government by statutory authorities and private firms; and others based

on the provision of grants, collaborative schemes or other methods. At the moment there is a variety of schemes which apply in different ways to different industries and sec­

tors. For example, the Industrial Research and Development Grants scheme applies to the manufacturing and mining sectors but not to the services sector.

3.47 The Commission is currently conduct­ ing an inquiry on rural research. A reference to the Commission now, on the general ques­ tion of assistance to encourage research and

development and the dissemination and appli­ cation of research results, would enable it to relate its work in the resulting inquiry with its current inquiry on rural research, and thus to develop a consistent approach. The Commis­ sion would expect that a general inquiry on this subject would assist the Government to

develop a comprehensive and forward looking policy in relation to assistance for industrial innovation, to integrate it with other forms of assistance to industry and to ensure that its policies are consistent and compatible with similar general assistance measures. Hence it

could help provide a co-ordinated approach to encouraging innovation in Australian industries which would have application to all sectors

of the economy.

Advice on industry assistance— the public inquiry process 3.48 The procedures for formulating advice to Government on industry development are clearly an important determinant of the quality of that advice. Governments have a right to be satisfied that recommendations are based on sound and objective research and analysis. It is perhaps equally important that the pro­ cedures for formulating advice should provide opportunities for public participation, so that

the views of interested groups and individuals can be taken into account in the advisory process. It is not sufficient, however, that advice on industry development should be of

a high quality and that opportunities should

be available for public participation. It is of prime importance that the advisory process should be open to public scrutiny, so that

there can be public confidence that the process is in fact directed toward making recommen­ dations which will improve the well-being of the community as a whole and not only that of the participating interests (as can easily happen when policies are formulated behind closed doors).

3.49 A principal element of the present

system for providing advice on industry development is the opportunity it allows for public scrutiny of the arguments for and against proposed changes in the assistance to particular industries. This is important because of the necessarily discriminatory character of industry assistance, and the ten­ dency for attention to- be focussed on the short term benefits for particular groups of increas­ ing assistance, to the neglect of the longer term and widespread costs for the community as a whole, of providing such assistance. The danger of this is amplified by the fact that many taxpayers, consumers and users are generally not aware when they are contribut­ ing towards assistance to particular industries or sectors. Also, the concentration of the benefits and the diffusion of the costs of industry assistance have resulted in the rela­ tively small number of beneficiaries being better organised and more able to articulate their cases than the larger number of people (consumers and taxpayers) who bear the costs.

3.50 Because of the varying degrees of

influence of the conflicting interest groups and of the long term welfare consequences of specific assistance measures, formulation of advice on industry development policy needs to have the following characteristics:

e The process -must be independent, even­ handed and impartial—and should be seen to be so. a The process should be well-informed and

comprehensive, and should bring into account all the costs and benefits of proposed assistance measures on the community as a whole—including infor­ mation about the adjustment problems of individuals and groups directly affected by proposed changes.

3.51 A pre-condition for the independence and impartiality of such advice is that the whole process be open to maximum public scrutiny. The discipline of public scrutiny in

30

the process of inquiry and advice formulationto bring together manufacturers and importers is essential to: • Guarantee that all parties in the process enjoy parity, that all interests repre­

sented are alike in influence and import­ ance, and that issues are resolved not by exclusion or by the more powerful and articulate imposing their will, but by

open exchange. • Ensure that the views of particular

groups are exposed to the critical scrutiny of all persons who may have an interest in the outcome of the inquiry. In this process, the provision of public evidence

on oath is a major safeguard for the

Government and the community that the provision, of information (by interested parties is accurate, objective and com­ prehensive. • Guarantee to the Government and the

community that the agency carrying out the inquiry and providing the advice is itself impartial, and free from bias or favour.

3.52 The independence of the advisory agency from social and political pressures, and the impartiality and objectivity which are enforced toy a completely open process of public inquiry and report, provide the only

secure way of ensuring that the advice given to the Government reflects the interest of the community as a whole, rather than the views

of influential special interests.

3.53 The view is sometimes held that

provision of advice on industry development is largely a matter of arbitrating between the opposing views of local producers of a par­ ticular product and the importers of that

product, or between the interests requesting assistance and the opposing interests which do not wish to contribute to such assistance. One manifestation of this view is the proposal that the best way of resolving questions of

industry assistance is for a government agency

with the objective of establishing an equitable and mutually satisfactory solution to the problems of the industry. Such an approach, because of the lack of public scrutiny, would

be open to the partiality problems referred to above. Also it would not be comprehensive. Such arrangements also totally ignore inter­ industry, inter-sectoral and long term welfare

considerations. The provision of advice on industry assistance should really be a matter of arbitrating between the industry requesting

assistance and the long term interests of the community as a whole.

3.54 The provision of advice on industry development must be as comprehensive as possible, and must be based on an analysis of what long term effects assistance measures

would have, not only on the recipient indus­ try and the people in it, but also on those

groups who would have to provide the assist­ ance, on those industries which would have to compete with the recipient industry for resources, and on the welfare of the nation as a whole. It is therefore essential that advice to the Government on industry development be provided, not only after independent and impartial public scrutiny of the various facts and arguments, but also within the frame­ work of:

• A program of general research into

factors likely to influence the future development of industries. • Detailed inter-industry studies which show the effect of such assistance on

other industries and other industry sectors. • Arrangements to facilitate adjustment to changes in assistance for the industries

and persons affected by such change. • A clear and publicly stated set of assist­ ance criteria based on generally agreed long term economic and welfare

objectives.

31

4. Operations of the Commission

Reporting and research functions 4.1 The main function of the Commission as set out in Section 21 of the Industries

Assistance Commission Act is to ‘hold in­ quiries and make reports to the Minister . . . in respect of matters affecting assistance to industries and other matters that may be re­ ferred to the Commission in accordance with this Act.’ In addition to providing advice to the Government on particular references, the Commission has a general function of report­ ing on industry assistance in Australia and its affects on the Australian economy. This func­

tion is set out in Section 45 of the Act which reads in part as follows: ‘ . . . the Commission shall, so far as practicable, also report on—

(a) the assistance provided to industries by the Australian Government and the effect of that assistance on the develop­ ment of those industries; (b) the economic performance of those

industries and the principal factors affecting that performance; and (c) the general effect on the Australian economy of the provision of that

assistance.’

4.2 The Commission’s ability to produce in­ formative reports which will aid public scrutiny of arguments about assistance to industry is determined to a large extent by the adequacy

of the data on which its conclusions are based. In this respect the continued co-operation of the Australian Bureau of Statistics has been most helpful. The Commission is also grateful for the co-operation of the Bureau of Agricul­ tural Economics in supplying data and research papers for many of the Commission’s inquiries on assistance for rural industries. The evidence provided by many witnesses in a wide range

of inquiries has also been helpful. The Com­ mission wishes to thank the witnesses con­ cerned for their contributions.

4.3 While the primary data available to the Commission are a necessary basis for its work, analysis of these data is an essential part of the formulation of recommendations. Some comments of the Prime Minister, in explaining the reasons for establishment of the Commis­ sion, when he introduced the Industries Assis­ tance Commission Bill in the House of Rep­ resentatives on 27 September 1973, are particularly relevant in this context. The Prime

Minister stated: ‘The Commission will be able to develop and pursue a long term program of inquiries, free from day-to-day political pressures. This in turn has very important implications for the amount and quality of its information and for the depth of analysis which the Commission can under­ take. This of course includes analysis of the effects of its recommendations on the use of resources in different industries.’1 4.4 The Industries Assistance Commission Act is based on a report by Sir John Craw­ ford, which was prepared at the request of the

Government.2 That report stresses the impor­ tance of economic analysis in the following terms: Ί have said that the primary data avail­

able to the Commission are the founda­ tions for all its work. It is through its analysis of these data that the quality of the Commission’s work will be judged.’3

4.5 There is clearly a close relationship be­ tween the Commission’s specific reporting functions, relating to individual inquiries, and its general functions of reporting on assistance provided to industries, the effects of assistance, the economic performance of industries and

1Hansard, House of Representatives, 27 September 1973, p. 1633. M Commission to advise on Assistance to Industries, AGPS, Canberra, 1973. aIbid., p. 17

32

the principal factors affecting industry perfor­ mance. This relationship has important im­ plications for the structure of the Commis­ sion’s research program. The most efficient

way for the Commission to provide a sound basis of information and analysis for its reports on individual references, and also to perform adequately its more general reporting function, is by means of an integrated program of re­ search, which places greatest emphasis on re­ search into those factors which will shape the future environment for industry development

in Australia.

Inquiry and reporting procedures 4.6 The Commission’s inquiry and reporting procedures are outlined in Appendix 4.1. One major innovation in these procedures which was adopted, on a trial basis, during 1974-75 involves releasing draft reports. This gives interested parties the opportunity to examine the Commission’s analysis and conclusions,

and to comment on them in evidence at sup­ plementary public hearings, before the Com­ mission’s recommendations are finalised and submitted to the Minister. The procedure ex­

tends and gives greater meaning to the concept of public scrutiny upon which the Commission is based. The innovation appears to have been widely supported in the community.

4.7 The Commission expects that releasing draft reports will progressively become a nor­ mal component of its inquiry and reporting procedures. The procedure does, however, re­

quire a longer time and more resources for each inquiry. Because of time constraints in a number of inquiries and constraints imposed by the limited resources of the Commission,

it is unlikely to become feasible for the pro­ cedure to be followed for all reports.

References received and reported on 4.8 This section covers the operations of the Commission from 1 July 1974 to 30 June 1975. Some information is also provided on

the Commission’s activities during the three months ended 30 September 1975.

4.9 On 1 July 1974 the Commission had 46 references on hand. During the following twelve months it received 39 references, of

which two superseded earlier references (see Table 4.2.1); two references were withdrawn during the year. The Commission reported on 33 references and part of one other reference.

In addition, supplementary recommendations on six references were forwarded to the Mini­

ster on 26 November 1974.4 Supplementary recommendations on a further inquiry were forwarded to the Minister on 13 February 1975. On 30 June 1975 there remained 48

references on which the Commission had not reported, including one on dumping and one on multilateral trade negotiations', nine of these references concern questions of assistance for rural industries and one relates to the petroleum and mining industries. References received during the year included nine relating

to by-law questions (two of which were sub­ sequently withdrawn) and the references con­ cerning multilateral trade negotiations. Twelve references were associated with the Commis­ sion’s enlarged responsibilities. Of these, seven were to the Textiles Authority, while three were on rural industries and two were on tertiary industries.

4.10 Table 4.2.2 shows the stage of comple­ tion (as at 30 June 1975) of inquiries on ref­ erences held by the Commission (including those to the Textiles Authority). The table

gives the terms of reference of each inquiry and, for reports released during 1974-75 (in­ cluding reports made earlier), the recommen­ dations made. Table 4.2.3 is a summary of the stage of completion of references. It sum­ marises the stage reached as at 30 September

1975 for references which had not been com­ pleted by 30 September 1974, and for

those which were received subsequently. Of the inquiries completed for the 12 months ended 30 June 1975, six were part of the Commis­ sion’s Review Program.5 In addition sub­ industry H (Filament, fluorescent and other

discharge lamps) of the Electronic and Elec­ trical Equipment inquiry was completed in August 1975.

4.11 In addition to reporting on individual industries, the Commission has published other material of public interest. Publications pro­ duced by the Commission in 1974-75 are listed in Table 4.2.4.

4.12 Table 4.2.5 describes some of the

characteristics of manufacturing industries whose assistance was reviewed by the Tariff Board or the Commission during 1973-74 and 1974-75. The table shows value added, turn­

over, persons employed and the value of im­ ports for the industries reported on during this

‘In December 1974 responsibility for the administra­ tion of the Commission was transferred from the Prime Minister to the Special Minister of State.

“See The Tariff Review, AGPS, January 1973. Also Chapter 4 in the Tariff Board’s Annual Reports for 1970-71 and 1971-72.

33

period. A summary of assistance given to in­ dustries reported on by the Tariff Board or the Commission during 1973-74 and 1974-75 is presented in Table 2.2.2. This table shows average nominal and effective rates, and gross

and net subsidy equivalents of assistance pro­ vided to those industries before the Commis­ sion’s reports, and as recommended in the reports.

4.13 The Commission has continued the annual survey of the profitability and capital structure of the Australian manufacturing sec­ tor initiated by the Tariff Board in 1968. The results of this year’s survey are presented in

Appendix 4.3.

Changes in the membership of the Commission 4.14 M r F. A. Pascoe was appointed Com­ missioner on 4 March 1975 following the

resignation of Mr P. B. Westerway on 9 February 1975. Mr Pascoe was previously an Associate Commissioner.

4.15 Mr G. P. Hampel’s term of appoint­ ment as Associate Commissioner expired on 14 September 1974.

4.16 Part-time Associate Commissioners re­ appointed during the year to assist the

Commission in specific inquiries are: Mr E. K. Sinclair Mr E. K. Fisk Sir John Crawford

Mr C. H. Grace.

4.17 In addition, the following part-time Associate Commissioners have been appointed for the inquiries indicated: Mr W. N. Hogan, on 11 December

1974 for the inquiry on Rural Income Fluctuations—Certain Taxation Meas­ ures. (The Commission’s report on this subject has been completed and

released by the Government); Dr R. B. M. Dun, on 29 January 1975 for the inquiry on Financing Rural

Research; Professor R. M. Parish, on 26 Febru­ ary 1975 for the inquiry on Assist­ ance for the Consumption of Phos-

pbatic Fertilizers.

4.18 The new part-time Associate Commis­ sioners have varied backgrounds: • Mr Hogan has been engaged in farming on the Murrumbidgee Irrigation Area

near Leeton since 1928. Since 1971 he has been President of the Australian Farmers’ Federation. • D r Dun is Assistant Director-General,

New South Wales 'Department of Agri­ culture. Previous positions include: Director, Division of Animal Industry, N.S.W. Department of Agriculture, 1965­

1967; and Executive Officer, Australian Meat Research Committee, 1968-1971. • professor Parish is Professor of Eco­ nomics, Monash University. Previous

positions include: Associate Professor of Agricultural Economics, University of New England, 1964-66; Professor of

Economics, University of New England, 1966-71; Economist, World Bank, 1971­ 73.

Administration 4.19 Because the Commission is responsible for advising on assistance to all sectors of industry, it has had to deal with a large

number of general and industry-specific references over the last twelve months. This has made great demands on the Commission’s resources. Reports signed in 1974-75 included, for example, Passenger Motor Vehicles, Com­ mercial Motor Vehicles, Leather and Leather Substitute Products, Nitrogenous Fertilizers, Production of Gold, Assistance to New Land Farms in Western Australia and Rural Income Fluctuations—Certain Taxation Measures. References which the Commission is currently inquiring into include Clothing, Petroleum and Mining Industries—Taxation Treatment, Financing Rural Research and Assistance to the Performing Arts. Many of these refer­ ences have raised difficult and complex issues. This has required development of expertise in new areas and recruitment of staff to service inquiries. The Commission’s workload has also been significantly increased because of the

large number of Textiles Authority6 and Temporary Assistance Authority7 references received in 1974-75 (see Table 4.2.1). To report on these references and some other references within time periods specified by the Government, staff have had to be diverted

T he establishment of the Textiles Authority within the Commission was announced by the Minister for Secondary Industry on 1 May 1974. ’Section 25 of the Industries Assistance Commission

Act 1973 provided for the establishment of a Tem­ porary Assistance Authority. Although the Authority utilizes staff of the Commission, it is a separate body. Also, two of its members are Associate Commissioners.

34

from some inquiries in progress and the reports on the latter inquiries delayed.

4.20 The Commission records its apprecia­ tion of the way in which the Commission’s staff has responded to the heavy and complex

workload experienced during the year.

G. A. RATTIGAN Chairman

D. J. PEKIN Commissioner

R. BOYER Commissioner

G. F. JOHNSON d . l . McBr i d e C. W. CONRON A. G. LLOYD H. A. ROLFE

F. A. PASCOE

Canberra, A.C.T.

29 September 1975

Commissioner Commissioner Commissioner Commissioner

Commissioner Commissioner

35

APPENDIX 1.1: RECENT TRENDS IN AUSTRALIA’S BALANCE OF PAYMENTS

1. The character of the Australian balance of payments changed in the early 1970s with a swing into surplus after a period of approxi­ mate balance (Table 1.1.1). The major turn-

round occurred because merchandise imports grew only slowly over the period 1965-66 to 1972-73, while rapid increases were recorded in export earnings and capital inflows, in association with the discovery of new mineral deposits and the rapid expansion of the mining sector. In 1973-74, action taken by the Aus­ tralian Government and developments in the

economy eliminated the external surplus. If the underlying trends of the early 1970s were re-established, however, they would have far- reaching implications for the Australian economy.

Recent Trends

2. In the 1960s, the Australian balance of payments was characterised by a deficit on current account which was offset by substan­

tial capital inflows. The balance of trade recorded small fluctuations between deficit and surplus, but payments for freight and repatriation of income to foreign investors produced an overall deficit on the current

account. The capital inflow was composed mainly of direct investment in manufacturing industry and portfolio investment, until the mid-1960s when a rapid increase in overseas investment in mining offset a decline in invest­ ment in manufacturing industries.

3. A strong and growing surplus appeared in the balance of trade in 1969-70, and inter­ national reserves increased from $1,53 8m in that year to $4 248m in 1972-73.1 Merchan­ dise exports grew very rapidly over this period, rising from $3 967m to $6 010m, while mer­ chandise imports remained steady (Table

1.1.1). The outcome was a growing surplus on the balance of trade which reached

$2 202m in 1972-73. The surplus was augmen­ ted by the high level of capital inflow through­ out this period.

4. Beginning in 1972-73, a number of changes occurred which had the effect of reducing this * *ABS, Balance of Payments, June 1975.

surplus.2 The combination of exchange rate appreciations, tariff reductions and domestic supply shortages in a time of steeply rising demand stimulated a sharp increase in imports, which in 1973-74 were 51 per cent higher in

value than the previous year. This brought an abrupt decrease in the balance of trade sur­ plus in spite of a continuing increase in export earnings. At the same time, new financial measures were introduced which diminished the capital inflow to a fraction of the level of previous years, and the balance of payments returned to deficit.

5. In 1974-75 the Government took action to curb the level of imports.3 The impact on the balance of payments of the measures taken is not yet clear although, no doubt, they have been partly responsible for the sharp fall in imports during 1975.1

Impact of the mining sector 6. The movement of the balance of payments into substantial surplus in 1970-71 and 1972-73 was attributable jointly to the balance of trade surplus and large inflows of foreign investment. Both arose largely from the rapid development of mineral discoveries. * 1 1

T h e policy changes were: exchange rate appreciation of 4.85 per cent on 23 December 1972 and 5.0 per cent on 9 September 1973; general tariff reduction of 25 per cent on 18 July 1973; embargo on all

borrowings overseas with a repayment period of less than two years, applicable from 27 September 1972 to 11 November 1974; embargo on borrowings to be repaid in less than six months, applicable from

11 November 1974; deposit requirements on capital inflow of 25 per cent, applicable from 23 December 1972 to 8 August 1974, and deposit requirements of 5 per cent from 8 August 1974 to 11 November 1974. Further, the Government did not take any action

against the currency movements of the major trading nations, which led to a substantial effective revalua­ tion of the Australian currency over the period 1972 to 1974: for example, the devaluation of the U.S. dollar on 14 February 1973 was equivalent to an

11.11 per cent appreciation of the Australian against the U.S. dollar. These measures included a currency depreciation of 12 per cent on 25 September 1974, and introduction

of import quotas, tariff quotas and high levels of temporary assistance for some industries. ‘As Appendix 1.3 explains, imports had already begun to decline in the December quarter of 1974-75,

and the steep fall in 1975 was principally caused by the rapid contraction of demand.

36

7. Most of the output of the mining sector is exported and these exports provided much of the growth in export earnings. There was

also some import substitution; in particular, oil production expanded to provide 70 per cent of Australia’s requirements. The net contribution of the mining sector to the balance of payments must take account of other effects caused by its expansion. For example, the inflow of foreign investment must eventually lead to an outflow of invest­ ment income to overseas investors, and the

expansion of the mining sector would be expected to induce an increase in imports of equipment and materials for development purposes.

8. From the relatively small base of 7 per cent of exports in 1961-62 to 1963-64, mineral products rose to 24 per cent of exports in 1973-74 (Table 1.1.2). From 1961-62 to

1966-67 the value of exports other than mining products grew at a rate of 6 per cent per year, and from 1966-67 to 1973-74 at a rate of 10 per cent per year. The large increase

of exports from the mining sector in the period 1966-67 to 1973-74 lifted the rate of growth of all exports from 7 per cent per year in

the first period to a rate of 13 per cent per

year for the later period. Most of the increase in value of mineral exports arose from an increase in volume rather than from higher prices.5

9. Exports of mineral products are not

expected to grow as rapidly in the period to 1980 as in the first half of the decade (Table 1.1.3). Continued rapid expansion in 1975-76, however, should raise the share of minerals in

total exports to over 30 per cent. The forecast growth of around 6 per cent per year until 1979-80, accompanied by price increases as the world economy moves out of recession, should provide a solid underpinning to export

earnings.

10. Overseas investment in the mining indus­ try has been an important contributor to the high level of capital inflow in recent years. In terms of direct investment in companies,8

the proportion of overseas investment going

Trices of mineral exports increased on average only 18 per cent over the period 1962 to 1972 (BMR, Australian Mineral Industry, 1972 Review). “The other component of investment, portfolio invest­

ment, has also assumed an increasing role in recent years. However, over the period 1961-62 to 1971-72, direct investment still averaged 70 per cent of total overseas investment. (ABS, Balance of Payments, various issues.)

to the mining sector grew from 4 per cent in 1963-64 to 40 per cent in 1971-72. Direct over­ seas investment in the mining sector from 1963-64 to 1971-72 increased at an average

rate of 46 per cent per year, while direct over­ seas investment in other sectors increased by only 3 per cent per year.7 With some slacken­ ing in the rate of growth of mineral exports (and hence of the mining sector) it seems that

overseas investment in the mining sector is unlikely to continue to grow at the extremely high rates of the recent past.

11. It is not possible to obtain separate figures of income remitted to overseas investors in the mining sector. In recent years growth in income remitted to overseas investors in all

Australian industries has trailed behind the increase in overseas investment, about one- third of investment income accruing to foreign investors has been retained in Australia for reinvestment.8 Payments of investment income have partly offset the impact of the capital

inflow, but the combined effect on the balance of payments of these two items has been large and positive. For example, Table 1.1.1 shows that over the years 1964-65 to 1971-72 the

average net effect of capital inflows and invest­ ment income outflows was plus $413m per year.6

Future trends 12. Any projections of future developments in the Australian external account must be uncertain. The balance of payments is deter­ mined by developments abroad and at home. The world trading system is currently in a

state of some disarray, caused by world-wide recession, payments difficulties for major oil importing countries10 and successive currency crises.

'ABS, Overseas Investment, 1972-73. sIn the statistical recording of the external account, undistributed income appears as a debit component of investment income in the current account, and

also as a credit component of capital inflow in the capital account. The net effect of undistributed income on the external account is therefore zero. “In 1972 and 1973 stringent controls operated on

capital inflow, and these years were exceptional. Capital controls have been relaxed progressively since September 1974 so that a return to the pre- 1972 pattern is possible. ’“The effect of higher oil prices on the Australian

balance of payments has not been severe. In recent years, Australia has had a self-sufficiency ratio in crude petroleum of about 70 per cent. As a result, the increase in oil prices in December 1973 added

about S150m to the import bill for 1973-74.

37

13. In recent months the level of inflation in most of the major trading nations has fallen significantly, while inflation in Australia has remained steady at a high rate.11 If maintained

this differential will lead to a large inflow of imports, and a loss of competitiveness in Aus­ tralia’s trading position. This could require further adjustment of Australia’s exchange

“ In May 1975, inflation rates were running at an annual level of 9.5 per cent in the U.S.A., 14.4 per cent in Japan, 25.0 per cent in the U.K., 6.1 per

cent in West Germany, 10.1 per cent in Canada, and 16.9 per cent in Australia (Reserve Bank of Aus­ tralia Statistical Bulletin, June 1975).

rate. On the other hand, although earnings from mineral exports cannot be expected to continue to grow at the spectacular rates of the recent past, the mineral sector should,

as noted above, provide a solid underpinning to the balance of trade if the forecast growth in volume of 6 per cent per year is accom­ panied by some increase in prices. Capital inflows may also be restored following the removal of the restrictions imposed between

1972 and 1974. If exports and especially mineral exports, do rather better than forecast, or the inflation differential is narrowed, there will be scope for imports to be increased.

38

TABLE 1.1.1: BALANCE OF PAYM ENTS: AUSTRALIA— 1964-65 TO 1974-75 ($ million)

1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75

Current Account Exports fob(a) . . . 2 574 2 639 2 916 2 931 3 235 3 967 4 230 4 744 6 010 6 694 8 479

Imports fob(a) . . . - 2 739 - 2 822 - 2 837 - 3 159 - 3 203 - 3 553 - 3 790 - 3 792 - 3 808 - 5 753 - 7 701

Balance of trade . . -1 6 5 -1 8 3 79 -2 2 9 32 414 440 952 2 202 941 777

Invisible credits Invisible debits : Transportation Property income

Other . .

Net invisibles .

708 747 821 914 988 1 111 1 188

-493 -5 2 6 -5 5 4 -6 5 5 -6 9 9 -7 5 4 -8 3 2

-4 1 0 -431 -465 -6 0 3 -6 8 5 -7 3 8 -791

-4 2 6 -4 8 2 -5 5 2 -581 -6 2 5 -7 5 0 -8 1 5

-621 -6 9 4 -7 5 0 -9 2 4 - 1 020 - 1 130 - 1 249

1 352 1 547 1 829 2 157

-848 -8 8 4 - 1 174 - 1 495

-8 2 5 - 1 029 - 1 144 - 1 082

-9 7 6 - 1 136 - 1 236 - 1 439

- 1 295 - 1 502 - 1 724 - 1 859

Balance on current account -7 8 6 -8 7 7 -6 7 0 - 1 153 -9 8 8 -7 1 6 -8 0 9 -3 4 3 700 -7 8 3 - 1 081

Capital A ccount Net identified capital inflow . 473 714 380 1 084 1 043 675 1 399

Balancing item . . . 16- 220 167 148 94 78 7

Net apparent capital inflow . 489 934 547 1 232 1 136 753 1 406

1 280 505 1 786

322 57 379

164 257

50 361

214 618

Net monetary movements -2 9 7 57 -1 2 4 79 148 37 598 1 442 1 079 -5 6 9 -463

(a) Adjusted for balance of payments purposes. (b) Preliminary. Source: ABS, Balance of Payments, June 1975.

TABLE 1.1.2: COMPOSITION OF EXPORTS(a): AUSTRALIA—1961-62 TO 1973-74

Other exports Total

1961- 62 . 1962- 63 .

1963- 64 .

1964- 65 . 1965- 66 .

1966- 67 .

1967- 68 . 1968- 69 .

1969- 70 . 1970- 71 . 1971- 72 . 1972- 73 .

1973- 74(c)

$m Per cent®

156 7

149 7

196 7

249 9

306 11

353 12

471 16

635 20

953 24

1 112 26

1 164 25

1 324 22

1 607 24

$m Per cent®

1 625 77

1 636 78

2 135 78

1 910 74

1 829 69

1 994 68

1 818 62

1 862 57

2 088 53

2 090 50

2 378 50

3 261 55

3 477 52

$m Per cent®

244 12

247 12

310 11

323 13

384 15

463 16

478 16

562 17

727 18

800 19

954 20

1 122 19

1 339 20

$m Per cent®

76 4

74 3

86 4

100 4

119 5

126 4

168 6

186 6

198 5

199 5

223 5

254 4

275 4

$m Per cent®

2 101 100

2 106 100

2 727 100

2 582 100

2 638 100

2 936 100

2 935 100

3 245 100

3 966 100

4 201 100

4 719 100

5 961 100

6 698 100

(а) Recorded exports of Australian produce. (б) Percentage of total exports. (c) Preliminary.

Sources: Department of Overseas Trade, Exports o f Manufactures, June 1975; Exports o f Primary Products, July 1975.

TABLE 1.1.3: ESTIMATES OF EXPORT INCOME FROM MININGS): AUSTRALIA—1973-74 TO 1983-84 ($ million)

Level® 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84

Exports of all metals and minerals I (c)2 051 2 794 3 111 3 274 3 468 3 421 3 732 3 803 3 875 3 913 3 975

II n.a. n.a. 3 260 3 437 3 674 3 908 4 155 4 472 4 779 5 010 5 132

Percentage increase on previous I n.a. 36.2 11.3 5.2 5.9 - 1 . 4 9.1 1.9 1.9 1.0 1.6

year II n.a. n.a. (d)16.7 5.4 6.9 6.4 6.3 7.6 6.9 4.8 2.4

n.a. Not available. (а) The projected levels of exports of mineral products shown in the table were estimated by the Bureau of Mineral Resources during 1974-75 on the basis of information available at that time. The projections are at constant prices and are based on prices current in mid-1974 and on the parity of the 5Λ at that time. (б) Levels I and II represent the minimum and maximum of a range within which it seems likely to the Bureau of Mineral Resources that the value of mineral exports will

fall.

(c) Actual. (d) Percentage increase over the level I estimate for 1974-75. Source: BMR, Australian Mineral Industry, 1973 Review.

APPENDIX 1.2: THE STRUCTURE AND MOBILITY OF THE AUSTRALIAN LABOUR FORCE TA BLE 1 .2 .1 : JOB(a) D U RA TIO N O R EM P LO Y E D PE R SO N S, B Y S E X . A G E A N D BIRTH PLAC E: A U ST R A L IA — N O V E M B E R 1972

Persons Persons

Males

M arried Aged 15 to Aged 25 to

women Females Persons 24 years 34 years

Aged 35 years A ustralian and over born

Overseas

Per Per Per Per per

cent cent cent cent cent

Employed for the whole o f the year, and had one job during the year— duration of current job - 1 year and under 2 years . . .

*000 (6) Ό00 (6) ’000 (6) *000 (6) Ό00 (1) *000

497.3 797.2

13.3 202.9 17.7 334.5 18.2 831.8 14.9 298.1 21.2 229.1

- 2 years and under 5 years . . 21.4 287.5 25.1 458.2 24.9 1 255.4 22.5 361.9 25.8 322.7

- 5 years and over . . . . 1 643.4 44.0 315.1 27.6 454.4 24.7 2 097.8 37.7 126.3 9 .0 364.9

Total . . . . . . 2 937.9 78.7 805.5 70.5 1 247.1 67.9 4 185.0 75.1 786.3 56.0 916.7

Per Per Per Per

cent cent

Φ) *000 «0 *000 (6) *000 Φ)

18.0 304.7 10.5 572.6 14.0 259.2 17.5

23.6 25.3 570.8 19.8 905.6 22.2 349.9

28.6 1 606.5 55.6 1 627.4 39.8 470.4 31.7

71.9 2 482.0 85.9 3 105.6 76.0 1 079.5 72.8

Employed in current job for less than one year - employed for the whole o f the year, and held more than one job during

the year . . . . .

- employed for part o f the year, and held more than one job during the year . - employed for part o f the year, and in first job for the year . . .

Total . . . . . .

Total employment . . .

311.3

338.2

8.3*1

9.1 J ■ 169.0

r

1 4 .8 |

49.4

268.7

2 .7

14.6

360.7

607.0

6.5*1

10.9 J ■ 395.4

144.3 3.9 168.8 14.8 272.0 14.8 416.3 7.5 223.2

793.8 21.3 337.9 29.6 590.2 32.1 1 384.0 24.9 618.6

3 731.7 100.0 1 143.3 100.0 1 837.3 100.0 5 569.0 100.0 1 404.9

28.1 272.3

15.9 85.6

44.0 357.8

100.0 1 274.5

21.4 300.0

f 275.4

10.4«{ [ 392.2

6.7

9 .6

85.2

214.8

5.7

14.5

6.7 107.5 3.7 313.2 7.7 103.2 7.0

28.1 407.5 14.1 980.8 24.0 403.2 27.2

100.0 2 889.6 100.0 4 086.4 100.0 1 482.6 100.0

(a) A job is defined as employment as a wage or salary earner (or unpaid family helper) by a particular employer in a particular locality, or self employment in a particular locality. A job change may therefore involve a change in either or both of employer and locality. (/>) Percentage of total employment in the particular category. Source: Derived from information contained in ABS, Labour Force Experience 1972, and Labour Mobility November 1972, and also from additional inform ation on labour mobility, provided by

the ABS.

N ote: All o f the information in the table is derived from sample surveys and therefore all the figures in the table are estimates which are subject to sampling variability. F or a full description of the nature of the sampling variability, refer to the above mentioned publications.

T A B LE 1.2.2: JOB(a) D U R A TIO N OF EM P LO Y E D PE R SO N S, B Y SECTOR(b): A U ST R A L IA — N O V E M B E R 1972

Finance,

Transport, business and

Wholesale and storage and community

Agriculture M anufacturing Construction retail trade communication services Other industries Total

Ό00

Per

CC(c) ΌΟΟ

Per

ce5 ) ’000

Per

C6(c) ’000

Per

“ ) Ό00

Per

(c) *000

Per

ce(” ) ’000

Employed for the whole o f the year and had one job during the year—duration o f current job

- 1 year and under 2 years .

- 2 years and under 5 years . - 5 years and over . .

29.2 55.8 262.9

7.0 13.4 63.2

195.6 298.4 520.5

14.8 22.6 39.4

67.7 102.7 167.5

14.3 21.7 35.4

200.0 259.0 366.6

17.2 22.3 31.5

46.2 91.0 211.5

10.9 21.5 50.1

181.9 278.2 312.2

17.2 26.4 29.6

1 1 1.0 170.3 256.5

Total . . . . 347.9 83.6 1 014.5 76.9 338.0 71.5 825.6 70.9 348.7 82.6 772.5 73.2 537.9

Employed in current job for less than one year employed for the whole of the year, and held more than

one job during the year . 4.9 1.2 67.5 5.1 38.6 8.2 76.4 6.6 24.5 5.8 105.4 10.0 43.3

employed for part o f the

year, and held more than one job during the year . 48.4 11.6 149.2 11.3 81.0 17.1 145.6 12.5 33.4 7.9 75.3 7.1 74.3

employed for part o f the

year, and in first job for the year . . . . 15.1 3.6 88.2 6.7 15.0 3.2 116.1 10.0 15.7 3.7 102.0 9 .7 64.2

Total . . . . 68.4 16.4 304.9 23.1 134.6 28.5 338.1 29.1 73.6 17.4 282.7 26.8 181.8

Total employment . - . 416.3 100.0 1 319.4 100.0 472.6 100.0 1 163.7 100.0 422.3 100.0 1 055.0 100.0 719.6

Per

(c) *000

15.4 831.8

23.7 1 255.4

35.6 2 097.8

74.7 4 185.0

6 .0 360.7

10.3 607.0

8.9 416.3

25.3 1 384.0

100.0 5 569.0

Per

“ >

14.9 22.5 37.7

75.1

6.5

10.9

7.5

24.9

1 0 0 .0

(a) See corresponding footnote to Table 1.2.1. (b) The sectors refer to a grouping o f divisions o f the A ustralian Standard Industrial Classification (ASIC). (c) Percentage o f total employment in the sector. Source: As for Table 1.2.1.

N ote: All o f the information in this table is derived from sample surveys and therefore all the figures in the table are estimates which are subject to sampling variability. F or a full description o f the nature o f the sampling variability, refer to the publications mentioned in Table 1.2.1.

TABLE 1.2.3: JOB(a) DERATION OF EMPLOYED PERSONS, RELATED TO EFFECTIVE RATES OF ASSISTANCES): AUSTRALIA—NOVEMBER 1972

Manufacturing Manufacturing Manufacturing industries with an industries with an industries with an average effective average effective average effective rate of assist- rate of assist- rate of assist­

ance® below ance(b) from 25 to ance(6) above All manufacturing

25 per cent 50 per cent 50 per cent industries Other industries All industries

Per cent

’000 (c)

Employed for the whole of the year, and had one job during the year—duration of current job - 1 year and under 2 years . 48.5 14.4

- 2 years and under 5 years . 80.6 24.0

- 5 years and over . . . 123.4 36.8

Per cent Per cent

’000 (c) Ό00 (c) ’000

61.1 13.9 86.1 15.8 195.6

98.3 22.7 118.5 21.7 298.4

186.1 42.5 210.9 38.7 520.5

Per cent (c) ’000

Per cent (c) ’000

Per cent (c)

14.8 636.2 15.0 831.8 14.9

22.6 957.0 22.5 1 255.4 22.5

39.4 1 577.3 37.1 2 097.8 37.7

Total 252.5 75.2 346.5 79.1 415.5 76.2 1 014.5 76.9 3 170.5 74.6 4 185.0 75.1

£ Employed in current job for less than one year - employed for the whole of the'l year, and held more than one |

job during the year . . 1

- employed for part of the year, Γ 61.5 18.3 64.2 14.7 91.0

f 67.5

16.7-j

5.1

and held more than one job during the year . . . J

- employed for part of the year, and in first job for the year . 21.8 - 6.5 27.6 6.3 38.9

l 149.2

7.1 88.2

11.3

6.7

293.2

457.8

328.1

6.9 360.7 6.5

10.8 607.0 10.9

7.7 416.3 7.5

Total . . . . 83.3 24.8 91.8 20.9 129.9 23.8 304.9 23.1 1 079.1 25.4 1 384.0 24.9

Total employment . . 335.7 100.0 438.2 100.0 545.6 100.0 1 319.4 100.0 4 249.6 100.0 5 569.0 100.0

(а) See corresponding footnote to Table 1.2.1. (б) The effective rates of assistance used to compile this table are those published in the Industries Assistance Commission Annual Report, 1973-74. The rates are estimates for the year 1969-70. (c) Percentage of total employment in the industry category. Source: As for Table 1.2.1. Note: All of the information in the table is derived from sample surveys and therefore all the figures in the table are estimates which are subject to sampling variability. For

a full description of the nature of the sampling variability, refer to the publications mentioned in Table 1.2.1.

TABLE 1.2.4: CURRENT AND PREVIOUS JOB{d), BY SECTORS), OF EMPLOYED PERSONS WHO HAD MORE THAN ONE JOB IN THE PREVIOUS YEAR: AUSTRALIA—NOVEMBER 1972

Sector(b) of previous job

Finance,

Transport, business and

Wholesale and storage and community Other

Sector(6) of current job Agriculture Manufacturing Construction retail trade communication services industries Total

Per Per Per Per Per

cent cent cent cent cent

(c) Ό00 (C) Ό00 (c) Ό00 (c) Ό00 (c) ΌΟΟ

Per cent (c)

Per cent

Ό00 (c) ’000

Agriculture . . . . 32.2 7.7 6.8 0.5 (6) (d) id) id) id) id) id)

Manufacturing . . . . 8. 0 1. 9113.9 8.6 19.5 4.1 44.0 3.8 9.4 2.2 10.0

Construction . . . . 4. 6 1. 1 17.1 1.3 72.0 15.2 9.6 0.8 5.5 1.3 id)

Wholesale and retail trade . . 4.6 1.1 41.4 3.1 6.5 1.4 125.4 10.8 7.9 1.9 18.2

Transport, storage and communi­ cation . . . . . id) id) 8. 6 0. 7 4. 7 1. 0 9. 6 0. 8 23.8 5.6 id)

Finance, business and community services . . . . . id) (d) 17.3 1.3 id) id) 26.6 2.3 4.4 1.0 112.0

Other industries . . . id) (d) 14.4 1.1 7.0 1.5 19.4 1.7 4.9 1.2 13.7

id) id)

0.1 11.9

id) 7.0

1.7 17.9

id) 5.3

10.6 14.5

1.3 55.4

id) 53.3

1.7 216.7

1.0 119.6

2.5 222.0

0.7 57.9

2.0 180.5

7.7 117.5

(а) See corresponding footnote to Table 1.2.1. (б) See corresponding footnote to Table 1.2.2. (c) Percentage of total employment in the sector of previous job. This percentage standardises the inter-sectoral flows with respect to the different sizes of sector of previous job. For example, the first row of the table shows that there were 53.3 thousand people employed in Agriculture at November 1972 who had had more than one job in the

previous year; of these people, 6.8 thousand had their previous job in manufacturing and these 6.8 thousand people represented 0.5 per cent of all employment in manufacturing. (d) The sampling variability associated with this estimate is too high for the estimate to be of any practical use. Source: As for Table 1.2.1. Note: All of the information in the table is derived from sample surveys and therefore all the figures in the table are estimates which are subject to sampling variability.

For a full description of the nature of the sampling variability, refer to the publications mentioned in Table 1.2.1.

TABLE 1.2.5: CURRENT AND PREVIOUS JOB(a), B Y INDUSTRY, OF EMPLOYED PERSONS WHO HAD MORE THAN ONE JOB IN THE PREVIOUS YEAR: AUSTRALIA—NOVEMBER 1972

Industry of previous job

Manufacturing

Manufacturing industries with Manufacturing industries with average industries with

an average effective rate an average

effective rate of assistance® effective rate

of assistance® of from 25 to of assistance® All manufacturing All

Industry of current job below 25 per cent 50 per cent above 50 per cent industries Other industries industries

’000

Per cent (c) Ό00

Per cent (c) ’000

Per cent ®

Manufacturing industries with an average effective rate of assistance® below 25 per c e n t ......................................................... 12.7 3.8 5.7 1.3 8.7 1.6

Manufacturing industries with an average effective rate of assistance® or from 25 to 50 per cent . . . . . . 5. 6 1. 7 20.6 4.7 9.1 1.7

Manufacturing industries with an average effective rate of assistance® above 50 per cent . . . . . . . 7. 1 2. 1 10.0 2.3 34.3 6.3

’000

Per cent (c)

27.1 2.1

35.4 2.7

51.4 3.9

’000

Per cent (c)

34.5 0.8

28.8 0.7

39.6 0.9

All manufacturing industries 25.4 7.6 36.4 8.3 52.1 9.5 113.9 8.6 102.8

8.0 645.2 15.2

’000

61.5

64.2

91.0

216.7

750.9

(a) See corresponding footnote to Table 1.2.1. ® See corresponding footnote to Table 1.2.3. (<■) Percentage of total employment in the industry category of previous job. This percentage standardises the inter-industry flows with respect to the different sizes of industry of previous job. For example, the first row of the table shows that there were 61.5 thousand people employed in manufacturing industries with an average effective rate

of assistance below 25 per cent who had had more than one job in the previous year; of these people, 8.7 thousand had their previous job in manufacturing industries with an average effective rate of assistance above 50 per cent, and these 8.7 thousand people represented 1.6 per cent of all employment in manufacturing industries with an average effective rate of assistance above 50 per cent. Source: As for Table 1.2.1. Note: All of the information in the table is derived from sample surveys and therefore all the figures in the table are estimates which are subject to sampling variability.

For a full description of the nature of the sampling variability, refer to the publications mentioned in Table 1.2.1.

TABLE 1.2.6: CHARACTERISTICS OF EMPLOYMENT, B Y SECTOR: AUSTRALIA—30 JUNE 1971 (Per cent)

Proportion of employees in each sector with selected characteristics

Highest level of secondary schooling

Age attended(b) Qualifications obtained(c)

Degree

Trade or or other

Overseas Less than 45 years Level technical tertiary

Sector(o) Female born 25 years and over None five None (d) (e)

Agriculture, forestry, fishing and hunting . . Mining . . . . . . . .

Manufacturing . . . . . . .

Electricity, gas and water . . . . .

Construction . . . . . . .

Wholesale and retail trade . . . . .

Transport and storage . . . . .

Communication . . . . . .

Finance, insurance, real estate and business services Public administration and defence . . .

Community services . . . . . .

Entertainment, recreation and other industries .

18 11 17 42 32

7 25 23 27 19

26 39 24 32 23

8 25 21 39 18

5 33 23 29 24

39 24 30 29 14

12 22 19 35 21

24 19 30 32 14

43 21 40 23 5

24 19 36 28 10

60 23 26 30 10

47 28 23 35 21

11 19 16 21

12 17 15 18

39 34 48 14

91 70 71 59

57 78 82 76

75 69 47 82

6

21 24 32 40

17 14 19 8

17 17 13

1 7 3

7 2 3 2

3

12 11 33 2

All industries 21 72 19 7

(a) Divisions of the Australian Standard Industrial Classification (ASIC). (b) The varying years of secondary schooling associated with different education systems have been approximately standardised on a scale of levels one to five. In general, level five refers to the final year, or an amalgamation of the final two years of secondary schooling of the various eduction systems. (c) Qualifications refer to any formal recognition of skill or training by way of a degree, diploma, certificate, etc., usually obtained after study at a college or university, or

through apprenticeship schemes and suchlike. Secondary school certificates and the like are not included (but see preceding columns). (d) Trade qualifications are any formal recognition of competency in a skilled manual occupation, usually obtained through an apprenticeship and satisfactory progress in part-time studies concurrently with practical training. Technical qualifications are those which require theoretical knowledge as well as practical skills, for example wool classing and nursing.

(e) Degree qualifications are those as usually conferred by a university. Other tertiary qualifications relate to^qualifications conferred by institutions and professional asso­ ciations following substantial advanced study beyond matriculation. Source: Derived from information from the 1971 Census of Population and Housing provided by the ABS.

TA BLE 1 .2 .8 : C H A R A C TE R ISTIC S OF F E M A LE E M P L O Y M E N T , B Y SEC TO R: A U ST R A L IA — 30 JU N E 1971 (Per cent)

to ts)

TABLE 1.2.9: EMPLOYMENT B Y SE X AND BIRTHPLACE, RELATED TO EFFECTIVE RATES OF ASSISTANCE: AUSTRALIA—30 JUNE 1971

TA BLE 1.2.10: C H ARA C TER ISTIC S OF E M P L O Y M E N T IN TH E M A N G R IU FA C TU N SE C TO R , B Y IN D U S T R Y : A U ST R A L IA — 30 JU N E 1971

T A B LE 1.2 .1 0 —continued

Furniture and mattresses 2521 Furniture excl. sheet metal . .

2522 M attresses excl. rubber or wire . .

252

25 W ood, W ood P rod ucts a n d F u r n i-

Paper and Paper Products, Printing Paper and paper products 2611 Pulp, paper and paperboard . .

2612 Paper bags inch textile bags . .

2613 Solid fibreboard containers . .

2614 Corrugated fibreboard containers .

2615 Paper products, n.e.c. . . .

261

Printing and publishing 2621 Publishing, printing and publishing . 2622 Printing, stationery and bookbinding . 2623 Printing trade services, n.e.c. . .

262

26 Paper and Paper Products, Printing

C hemical, P etroleum and Coal P ro­ ducts

Basic chemicals

2711 Chemical fertilizers . . . .

2712 Industrial gases . . . .

2713 Synthetic resins and synthetic rubber . 2714 Organic industrial chemicals, n.e.c. . 2715 Inorganic industrial chemicals, n.e.c. .

271

Other chemical and related products

2723 Pharmaceutical and veterinary products 2724 Pesticides and agricultural chemicals . 2725 Soap and other detergents . . .

2726 Cosmetics and toilet preparations .

2727 Inks ....................................................

2728 Chemical products, n.e.c. . . .

272

Petroleum refining

2730 Petroleum refining . . . .

273

Petroleum and products, n.e.c.

2740 Petroleum and coal products, n.e.c. .

274

27 C hemical, P etroleum an d C oal P ro­ du cts . . . . . .

51 156 6 200 3 826

68 14 7 200 3 687

52 170 6 271 3 816

26 584 7 047 3 808

18 120 η n o 5 7 1 1

96 25 7 9 7 6 4 111

106 36 7 648 4 503

136 58 9 094 4 702

7 0 62 1 1 6 3 3 4 5 1 8

54 301 9 9 1 9 4 938

10 309 9 717 4 8 1 7

65 268 6 867 4 206

20 37 7 761 4 884

46 614 8 122 4 506

50 915 8 637 4 630

34 88 18 182 6 0 1 0

0 (/) ω (0

53 69 17 695 6 387

52 46 17 059 6 459

22 (/) ω (0

34 293 14 642 6 050

11 Cm) (m ) (m )

81 74 10 167 4 757

32 141 12 994 4 894

64 19 15 529 4 883

32 77 13 663 5 221

64 62 12 672 4 357

115 13 10 351 4 824

40 (m ) (m) (m )

42 466 11 635 4 806

- 9 111 26 112 7 343

- 9 111 26 112 7 343

26 16 13 168 5 855

26 16 13 168 5 855

37 886 13 522 5 370

TA BLE 1.2.10 —continued

I LA

3338 3339

333

33

Food processing machinery . .

Industrial machinery and equipment,

Other M achinery and Equipment .

40

32

32

246

586

1 389

7 557

7 889

5 025

4 818

11

13

34

38

24

24

34

31

14

13

18

19

7 770 4 864

7 521 4 599

51

52

44

43

M iscellaneous M anufacturing

Leather and leather products 3411 Leather tanning and fur dressing .

3412 Leather and substitute products, n.e.c.

Rubber products

3421 Rubber tyres, tubes, belts, hose, sheets 3422 Rubber products, n.e.c. . . .

46 93

48 53

21 25

92 47

139

7 113 5 568

4 449 3 191

22 52

38 45

21 25

43 36

37 28

11 13

6 177

9 539 7 552

3 688

5 446 4 401

12 30

55 53

16 17

36 35

28 30

18 17

8 755 5 033

85 83

84

79 82

80

12 14

16 14

3431 3432 3433 3434

343

3441 3442 3443 3444 3445

3446 3447

344

34

21-34

Plastic and related products Flexible plastic sheeting and products . Rigid plastic sheeting . . .

H ard surface floor coverings, n.e.c. . Plastic products, n.e.c. . . ,

Other manufacturing Ophthalmic articles . .

Jewellery and silverware . Brooms and brushes . .

Signs and advertising displays Sporting equipment . .

W riting and marking equipment Manufacturing, n.e.c. .

M iscellaneous M anufacturing

Total M anufacturing . .

19 31 43

25

2

74 51 36 82 32 44

77 9 13

180

280

10 19 14 27

18 11 14

11 121 9 716 17 974 7810

4 997 4 358 5 122 4 301

34 20 17 40

43 39 44 49

23 22 16 20

26 29 38 30

18 22 19 22

23 19 22 19

8 827

6 881 6 151 6 499 5 394 6 495 7 423 5 548

4 475

4 055 3 268 3 554 3 568 3 735 3 841

3 080

57 32 47 19 31 51 38

48 41 33 24

36 38 30

32 31 28 29 29 21 24

22 29 36 28

31 38 33

18 15 26 10 21

18 20

14 19 10 15 17 18 17

6 115 3 533

7 864 4 280

77 74 76 79

74 63 85 57 8.1 82 74

16 21 16

16

21 32 12 39

16 13 20

10 746 8 281

. . Less than 0.5 per cent.

(a) Industry sub-division, group and class o f the Australian Standard Industrial Classification (ASIC). (b) The average effective rates o f assistance are for the year 1969-70, the other industry characteristics are for the year 1972-73. The data on industry characteristics relate to manufacturing establish­ ments. For a description o f this and other terms used in this part of the table, refer to the source publication mentioned below. (c) See corresponding footnote (o) to Table 1 .2 .9 . (

(j> j Sec corresponding footnotes (6), (<■), (r/)and (<·} to Table 1.2 .6 .

V) The estimation o f rates of assistance for Raw sugar (2171) and Refined sugar (2172) is complicated by the im port restrictions which apply to those products. (;) Not available separately, included in class 2184. (/c) Includes classes 2171 and 2172. (/) N ot available separately, included in the total figure for group 27L

(m) Not available separately, included in the total figure for group 272 («) The value added figure for these two industries is — $310 000' for de - $310,000; for details, refer to the source publication mentioned below. Source: Industry characteristics: ABS, Manufacturing Establishments, 1972-73. ^ , , . Industries Assistance Commission Annual Report, 1973-74.

Employment characteristics: As for Table 1 .2 .6 .

2181 2182 2183 2184

Other fo o d products Confectionery and cocoa products . Canned fish and other seafoods . .

Prepared animal and bird foods . .

Food products, n.e.c. . . .

218

2191 2192 2193 2194

2195

Beverages and malt Soft drinks, cordials and syrups . .

Beer . . . . . .

M a l t ....................................................

Wine and brandy . . . .

Alcoholic beverages, n.e.c. . .

219

Tobacco products

2210 Tobacco products . . . .

221

21-22 Food, Beverages and Tobacco .

2311 2312

Vi 2313

<0 2314

2315 2316 2317

2318 2319 2321

Textiles

Textiles, yarns and woven fabrics C otton ginning . . . .

Scoured and carbonised wool . .

W ool and man-made fibre tops . .

M an-made fibres and yam s . .

M an-made fibre broadwoven fabrics . Cotton yarns and broadwoven fabrics . W orsted yam s and broadwoven fabrics Woollen yarns and broadwoven fabrics

Narrow woven and elastic fabrics . Textile finishing . . . .

2322 Household textiles .

231-232

Other textile products 2331 2332 2333 2334 2335

Textile floor coverings . . .

Felt and felt products . . .

Canvas and associated products, n.e.c. Rope, cordage and twine . . .

Textile products, n.e.c. . . .

233

23 Te x tiles....................................................

2411 2412 2413

Clothing and F ootwear

Knitting mills Hosiery . . . . . .

Cardigans and pullovers . . .

K nitted goods, n.e.c. . . .

241

Paper and P aper Products, Printing

Paper and paper products 2611 Pulp, paper and paperboard . .

2612 Paper bags inch textile bags . .

2613 Solid fibreboard containers . .

2614 Corrugated fibreboard containers .

2615 Paper products, n.e.c. . . .

261

Printing and publishing 2621 Publishing, printing and publishing . 2622 Printing, stationery and bookbinding . 2623 Printing trade services, n.e.c. . .

262

26 Paper an d P aper P rod ucts, P r in tin g

Chemical, P etroleum and Coal Pro­ ducts

Basic chemicals

2711 Chemical fertilisers . . . .

2712 Industrial gases . . . .

2713 Synthetic resins and synthetic rubber . 2714 Organic industrial chemicals, n.e.c. . 2715 Inorganic industrial chemicals, n.e.c. .

271

Other chemical and related products 2721 Ammunition, explosives and fireworks 2722 P a i n t s ....................................................

2723 Pharmaceutical and veterinary products 2724 Pesticides and agricultural chemicals . 2725 Soap and other detergents . . .

2726 Cosmetics and toilet preparations .

2727 I n k s ....................................................

2728 Chemical products, n.e.c. . . .

272

Petroleum refining

2730 Petroleum refining

273

Petroleum and coal products, n.e.c.

2740 Petroleum and coal products, n.e.c. .

274

27 C hemical, P etroleum a n d C oal P ro­ d u cts .......................................................

TABLE I >2.11 continued

37 21 70 27 2

T A B LE 1.2.11 —continued

Sugar

2171 Raw sugar .

2172 Refined sugar .

217

Other fo o d products 2181 Confectionery and cocoa products 2182 Canned fish and other seafoods , 2183 Prepared animal and bird foods . 2184 Food products, n.e.c. . .

218

Beverages and malt 2191 Soft drinks, cordials and syrups . 2192 B e e r ..........................................

2193 M a l t ..........................................

2194 Wine and brandy . . .

2195 Alcoholic beverages, n.e.c. .

219

Tobacco products

2210 Tobacco products . . .

221

21-22 F oo d, B everages a n d T obacco

T extiles

Textiles, yarns and woven fabrics 2311 C ottonginning . . . .

2312 Scoured and carbonised wool . .

2313 Wool and man-made fibre tops . .

2314 M an-made fibres and yarns . .

2315 Man-made fibre broadwoven fabrics . 2316 Cotton yarns and broadwoven fabrics . 2317 Worsted yarns and broadwoven fabrics 2318 Woollen yarns and broadwoven fabrics 2319 Narrow woven and elastic fabrics .

2321 Textile finishing . . . .

2322 Household textiles . . . .

231-232

Other textile products 2331 Textile floor coverings . . .

2332 Felt and felt products . . .

2333 Canvas and associated products, n.e.c. 2334 Rope, cordage and twine . . .

2335 Textile products, n.e.c. . . .

23

233

T extiles .

Furniture and mattresses 2521 Furniture excl. sheet metal . . 35 22 30 14 9 89 5 1 29 20 88 6 1

2522 M attresses excl. rubber or wire . 41 23 32 18 6 91 3 . . 52 11 92 4 1

252 36 22 30 15 8 89 5 ~ 34 18 89 6 1

25 W ood, W ood Products and Furni­ ture .................................................... 29 28 27 15 8 90 3 1 31 20 89 5 1

Paper and Paper Products, Printing

Paper and paper products 2611 Pulp, paper and paperboard . . 20

2612 Paper bags incl. textile bags . . ■ 44

2613 Solid fibreboard containers . . 31

2614 Corrugated fibreboard containers . 42

2615 Paper products, n.e.c. . . . 33

261 34

Printing and publishing 2621 Publishing, printing and publishing . 21

2622 Printing, stationery and bookbinding . 26

2623 Printing trade services, n.e.c. . . 24

53 18 8 14 90 3

36 25 21 5 95 1

31 30 18 6 94 3

32 24 16 6 93 2

29 29 16 7 91 3

36 25 15 8 92 3

36 2 7 5 2 4 8 2 5

34 30 12 9 88 7

4 2 21 5 17 85 7

1 2 2 29 87 3 1

51 11 9 6 1

‘ i

37 16 93 3 1

4 7 14 9 2 3 1

2 6 2 4 91 4 1

1 38 18 93 3 1

4 6 4 6 78 5 6

1 17 23 85 8 1

2 7 38 78 10 2

O' 262

XO

26 P aper and Paper P roducts, P rinting

2 4 35 2 8 9 15 8 6 6

~26 35 27 10 14 8 7 5

2

2

13

21

32

27

82

86

8

6

3

2

TA BLE 1.2 .1 2 —continued

APPENDIX 1.3: ASPECTS OF RECENT TRENDS IN IMPORTS

1. Over the last two years there have been very large changes in import flows to Aus­ tralia, and it has been suggested by some that increases in imports of goods and services,

particularly during 1974, were the prime causes of Australia’s current economic difficul­ ties. Others go further and argue that these increased imports were due solely to tariff reductions. These approaches neglect other

major forces acting on the economy and fail to recognize the complex inter-relationships between the economic variables that deter­ mine import levels.

Background to the present situation 2. The upswing in economic activity which began in mid-1972 was one of the shortest expansions that Australia has experienced in

the post-war period. The indicators in Figure 1.3.1 show that gross domestic product at constant prices turned down steeply in mid- 1974. Changes in monetary policy played a major role in determining the character of the

latest cycle. In its annual report the Reserve Bank1 emphasised that the sudden imposition of a restrictive monetary policy in 1973-74, and the further tightening of financial condi­ tions caused by the balance of payments deficit, contributed to the steep decline in economic activity and the rise in unemploy­ ment. Earlier expansionary fiscal and monetary policies, augmented by capital inflows (and

to a lesser extent the export surplus), provided the initial thrust to inflation by creating excess demand.

3. The rapid progress of inflation is shown by the indicators in Figure 1.3.1. Consumer prices have risen rapidly, but average weekly earnings have risen faster. The share of wages in national income has increased, and profit incomes have been squeezed (the latter con­ tributing to the decline in private fixed invest­ ment during 1974 and the first quarter of

1975).

4. The nature of Australia’s current economic problem is shown by the indicators in Figure 1.3.1. The policy dilemma posed is a familiar one throughout the industrialised world: how to control price-inflation in the presence of

Reserve Bank of Australia: Report and Financial Statement, 30 June 1975, p. 4.

high unemployment. The recent OECD Econo­ mic Survey stated: ‘Australia is at present experiencing one of the highest inflation rates in the OECD

area under the influence of severe cost- push pressures . . .’2

The role of imports 5. There was a very sharp increase in imports of goods and services into Australia in 1973­ 74: measured in 1966-67 prices, imports were 30 per cent higher than in the previous year. The volume of imports continued to rise in

the first few months of 1974-75, but the de­ cline that commenced in the December quarter meant that the year on year increase was only marginal. One reason for the increase in im­ ports was Australian producers and consumers looking abroad for alternative suppliers to overcome domestic supply shortages.3 Some of the decline in imports in the second half of

1974-75 may have resulted from the introduc­ tion of import restrictions, but imports were already falling in the last quarter of 1974, even before steps were taken to restrain them (see

Figure 1.3.3).

6. Imports of goods and services are prin­ cipally determined by income levels, the rate of utilization of domestic resources and move­ ments of relative prices. Empirical studies show that income growth tends to have more influence on aggregate trade flows than changes in relative prices,4 and recent Aus­

tralian experience appears to support this.

7. In most countries, the level of imports varies more than proportionally with changes in gross national expenditure. In Australia for the period since 1960, the ratio of imports to gross national expenditure, measured in 1966­ 67 prices, varied from a low of 14 per cent in

1961-62 to a high of 20 per cent in 1974-75 (Figure -1.3.2). After rising in the early 1960s, this ratio fluctuated around 17 per cent until 1973-74 when there was a jump to 19 per cent. This sudden change in 1973-74 needs careful examination because, at first glance, it

2OECD Economic Survey of Australia, July 1975, p. 6. "Ibid, p. 5. ‘H. Houthakker and S. Magee, Harvard Review of

Economics and Statistics, May 1969; and OECD Occasional Studies, December 1970.

74

suggests a structural change in the Australian economy towards consumption of more foreign produced goods and services.

Imports and capacity utilization 8. In the late stages of an economic upswing, when productive capacity becomes fully occupied, supply bottlenecks begin to appear

and demand for imports increases. In most countries, therefore, aggregate imports tend to reach high levels as domestic productive capa­ city becomes fully utilized.

9. This relationship is demonstrated in Figure 1.3.2, which shows that over the period since 1960-61 most of the variation in the ratio of imports to gross national expenditure is posi­ tively associated with changes in the average

number of overtime hours worked in larger factories. (The latter is used as an approximate measure for the rate of utilization of industrial capacity; other measures that might be used,

and which would show similar results, are the level of unemployment or the ratio of the number unemployed to the number of vacan­

cies.) 10. It is noticeable from Figure 1.3.2, how­ ever, that 1974-75 was an exceptional year and that the ratio of imports to gross national ex­

penditure must have been affected by factors other than the high utilization of domestic capacity.

11. One of the factors accounting for the sudden change in the import ratio was the decline, in the previous two years, in the prices

of imports compared with those for goods pro­ duced in Australia. An approximate measure of the average change in the price of imports compared with the price of domestically pro­

duced goods is obtained from the ratio of the implicit price deflator of imports of goods and services to the implicit price deflator of gross national expenditure less imports of goods and services (Figure 1.3.3). Since at least 1966-67, this ratio has fallen steadily5 every year, with

the largest fall occurring in 1972-73 and an average fall in 1973-74. Almost certainly there is a time lag before the effect of greater price competitiveness is reflected in a volume in­

crease in imports—which would help to explain the high imports in 1973-74. But the change in comparative prices in 1972-73 and * *A decline in import prices in relation to domestic

prices was typical of all OECD countries throughout the 1960s. Competition on world markets appears to have forced exporters to keep their prices unchanged and increasing costs have been absorbed in domestic

markets.

1973-74 does not seem large enough to explain all the divergence of 1974-75 from the trend shown in Figure 1.3.2.

12. Because the analysis is concerned with the ratio of imports to gross national expenditure, changes over time in both these variables must be considered. As has already been mentioned,

during 1973 supply shortages slowed expansion and increased demand for imports. There are always delays between the placing of orders and actual shipments, and the world-wide boom in 1973 probably extended these delays and caused a certain amount of over-ordering by importers anxious to obtain supplies. Delays

in deliveries and over-ordering would explain why recorded imports into Australia continued to rise even after economic activity had turned down. These factors would raise the ratio of imports to gross national expenditure. Seen in this light the 1974-75 figures appear to reflect a normal lagged relationship between changes in imports and changes in gross national

expenditure (Figure 1.3.3).6 The major difference distinguishing 1974-75 from earlier downswings in economic activity was the exceptional steepness of the fall in demand and output in the first half of 1974-75.

Tariff and exchange rate changes 13. One of the reasons why the prices of imported goods declined in relation to prices of goods produced in Australia in 1972-73 and the first half of 1973-74 was the accumulated appreciation of the Australian dollar.7

14. From Figure 1.3.4 it can be seen that the exchange rate increased approximately 23 per

"Preliminary figures for the second half of 1974-75 show that imports were falling steeply (Figure 1.3.3), and the proportion of imports in gross national expenditure was returning to a more normal level; the ratio was 17.9 per cent for the June quarter,

differences between the rates of inflation in Australia and in import-supplying countries were probably not an important factor influencing changes in relative prices over this period. However, during a period of relative stablity in Australia’s exchange rate, widely

differing rates of inflation may be important. In May 1975, for example, inflation in Australia was running at an annual rate of 16.9 per cent, compared with 9.5 per cent in the U.S., 6.1 per cent in West Germany, 14.4 per cent in Japan and 25.0 per cent in the U.K. If these price changes were reflected in export prices then the changes in relative prices over this period would be comparable with recent exchange

rate changes. Hence, even though Australia’s effective exchange rate is fixed in terms of the weighted average of major trading partners, Australian industry will still· be subject to short run changes in the prices of competing imports from particular supplying

countries.

75

cent between June 1972 and the peak in Janu­ ary 1974, and remained high compared with past levels until the devaluation in September 1974, when the effective exchange rate was set approximately 7 per cent above the level

of June 1972. Figure 1.3.5 shows how the Australian dollar has moved against the currencies of its major trading partners. During 1971-72 and 1972-73, it depreciated against the Japanese yen and the German mark, and appreciated against the U.S. dollar and the

pound sterling. Further appreciation occurred in 1973-74 against each of these currencies except the German mark. In 1974-75 the Aus­ tralian dollar depreciated against all these currencies.

15. The volume of imports was affected also by the decline in the duty-paid prices of imports because of the changes in tariff levels between 1972 and 1974. The general tariff reduction of 25 per cent on 19 July 1973 was the most important tariff reduction in Australia’s post­ war history. Other tariff reductions were

applied to imports of domestic appliances, heating and cooling equipment, consumer electronic products and electronic components. Towards the end of 1974 and during 1975 some tariffs were increased, but more

importantly import quotas were imposed on some products. The effects on imports of the more recent changes are difficult to disentangle

from the general reduction in imports associ­ ated with the decline in economic activity.

16. It is possible to compare the relative importance of tariff and exchange rate changes on the trade balance in very broad terms and with respect to some of the effects which are common to both.8 For example, a number of writers have estimated the short run effect on dutiable imports of the general tariff reduction to be approximately equivalent to an effective

exchange rate change of less than 6 per cent.9 This suggests that the tariff reduction in 1973 was much less important for the economy as

"These comparisons conceal considerable variation among different categories of imports. For example, during 1972-73, 57 per cent of imports were not subject to duty and therefore not directly affected by the general tariff reduction. By contrast,

approximately 2 per cent of imports were subject to duties exceeding 65 per cent of their fob value.

"See Report on Possible Ways of Increasing Imports, Canberra, 1973; Industries Assistance Commission Annual Report, 1973-74, Appendix 5.7; R. G. Gregory, L. D. Martin, An Analysis of Recent Relationships Between Import Flows and Import Prices, paper delivered to Anzaas Conference, Canberra, 1975.

a whole than the appreciation of the effective exchange rate over the period 1972 to 1974.10

Structural unemployment 17. Changes in assistance levels to industry since the general tariff reduction in 1973 seem to have had only a marginal effect on unem­ ployment. The Department of Labor and Immi­ gration records the numbers unemployed as a result of structural adjustment in the economy. Table 1.3.1 shows that the number of ‘notified retrenchments due to structural change’ in the manufacturing sector between July 1973 and June 1975 was 27 298,11 compared with total registrations for unemployment in that period

of 2.63 million. At 30 June 1975, 2.9 per cent of the total registered as unemployed had been reported by employers as unemployed for struc­ tural reasons. It would appear, therefore, that

the economic and social costs which bear upon the labour force and are associated with struc­ tural change, while undoubtedly important for those affected, are quite small relative to the economic and social costs associated with

unemployment from other changes in the eco­ nomy. On the other hand, the impact of struc­ tural adjustment resulting from the general tariff reduction has fallen mainly on a few industries: approximately 70 per cent of those registered as unemployed because of structural change since July 1973 were previously em­ ployed in the Textile, Clothing, Footwear and

Electronic Equipment and Component indus­ tries. (Between March 1974 and March 1975 employment fell by 29 per cent in Yarns and Textiles, and by 21 per cent in Clothing and Knitted Goods.)12

Summary and conclusion 18. The 'exceptionally high ratio of imports to gross national expenditure in 1974-75 is largely

“There are important differences between the effects of exchange rate and tariff changes. Exchange rate changes affect the relative prices of all imports and exports compared with non-traded domestic goods. Tariff changes affect only the relative prices of imports subject to the changed duty (less than half of Australia’s imports are subject to duties). uThis figure refers to notifications by employers to

the Department of Labor and Immigration. Not all employers notify retrenchments due to structural change, and for this reason the actual numbers of those unemployed for structural adjustment would be higher than 27 298. However, comparisons of assist­

ance paid for retrenchments with employees register­ ing for this reason shows that after screening, the figure of employer-notified retrenchments gives the better guide.

A liS. Employment and Unemployment, various issues.

76

explained by the steep fall in gross national expenditure in 1974-75, the lagged response of imports to changes in gross national expendi­ ture, and the decline in the prices of imported

goods compared with prices of domestically produced goods. To the extent that price changes were relevant, the evidence available suggests that exchange rate changes were more

significant than tariff changes in determining import levels.

19. If imports have not been a major cause of Australia’s current economic difficulties, the problems must lie elsewhere. The Reserve Bank of Australia in its annual report has no

hesitation in following a similar diagnosis to that given in the OBCD Economic Survey:

‘While the abatement of demand pressures around the middle of 1974 led to much of the rise in unemployment, the position was greatly exacerbated because the rise in

wages was a good deal sharper than the

increase in selling prices; in other words, there was a fast rise in real wages.’ And it continues: ‘Profits fell, even in nominal terms, and

there was, therefore, a contraction of firms’ activities and a decline in the demand for labour simultaneously with a worsening in inflation.’ 20. The present fundamental disequilibrium in

the economy started with the expansionary fiscal and monetary policies introduced in 1972-73, and it has been aggravated by policies adopted in subsequent years. The inflationary

pressures that developed spilt over into imports, and a tight labour market resulted in wage increases greater than productivity increases. Once demand inflation induces cost-push pres­

sures there will always be a time lag between policy action to restrict demand and a slowing down in the rate of price increase—because of the need to work out cost increases already

in the pipe-line.

77

TA B LE 1 .3 .1 : NOTIFIED R E TR E N C H M E N TS I N M ANU FACTU RING IN D U S T R Y D U E TO STRU C TU RAL CHANGE: A U STR A LIA — 1 J U L Y 1973 TO 30 JU N E 1975

Awaiting placement at end of June 1975

Industry Retrenchments Metropolitan Country Total

No. No. No. No,

T ex tiles.................................................... 9 740 1 125 834 1 959

Clothing.................................................... 7 066 1449 658 2107

Electrical.................................................... 2 728 1 500 405 1 905

Footwear.................................................... 2103 143 57 200

V ehicles.................................................... 1 862 70 7 77

Basic m e t a l s ........................................... 1 747 14 0 14

Tanning and leather................................... 191 30 19 49

Other ........................................... 1 861 760 82 862

T o t a l ........................................... 27 298 5 091 2 062 7173

Total number of persons registering as unem­ ployed, 1 July 1973 to 30 June 1975 . . Total number of persons registered as unem- 2 630 000 n.a. n.a. n.a.

ployed at 30 June 1975 . . . . n.a. 153 290 92 685 245 975

n.a. Not applicable. Source: Department of Labor and Immigration.

78

FIGURE 1.3.1: TRENDS IN M A IN ECONOMIC AGGREGATES, SEASO N ALLY ADJUSTED: AUSTRALIA— 1970-71 TO 1974-75(a)

$ million

Index num ber/ per cent

85001 8000 7500.

7000­ 6750

1500

1000+

2500­ 2000­ 1500­ 1000­

500-

Wage share o f G D P (per cent current prices)

Gross domestic product (average 1966-67 prices)

^ Gross private fixed capital expenditure (average 1966-67 prices) i *

.

Exports (current prices)

Imports (current prices)

Index o f average weekly earnings per employed male unit (current prices)

‘ -200

Consumer price index

Unemployment as a percentage o f the labour force

1970-71 1971-72 1972-73 1973-74 1974-75

Quarterly Estimates o f National Income and Expenditure, June Quarter 1975 (Preliminary); Overseas Trade: Australia— Exports and Imports, July 1975 (Preliminary); Average Weekly Earnings, June Quarter 1975; Consumer Price Index, June Quarter 1975;

Unemployment, August 1975 (Preliminary Estimates.)

79

T'/< j L /R U 2 . J . j ; J WV /Λ //> 6 'Λ ίό ^ ίΛ '/ί G J X O S S JVAL2'JOS>SA lJL* Λ 'Α '^ '^ ν ^ /Τ 'ί/Λ ^ ·, S U stS O M slJ JZ s >" ^4-D JCIS ΤΙΣT> A JVJ~t

RATIO OF IMPORT PRICES TO DOMESTIC PRICES{a); AUSTRALIA — 1960-61 TO 1974-75

Λ Ι Ο Ι ' ' £ Λ / £ Ά ' 7 · 5 ' / / / r / / £

$ million „ . > ^ $ million

Gross national expenditure (average 1966-67 prices)

Index o f value o f imports (1966-67 prices)

Ratio o f import prices to domestic prices

SDMJ S DMJ S DM J S DM J S DMJ S D M J S DM J SDMJ S D M J S DM J S D M J S DM J S D M J SDM J S DMJ

1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75

(a) Ratio of the implicit price deflator of imports of goods and services to the implicit price deflator of gross national expenditure (less imports of goods and services). In each case, the implicit price deflator is the ratio of the current price series to the series revalued at average 1966-67 prices.

Source: ABS, Quarterly Estimates o f National Income and Expenditure, various issues.

FIGURE 1.3.4: IN D EX OF EFFECTIVE EXCHANGE RATE(a): AUSTRALIA— 1970-71 TO 1974-75

$A revalued by 4.85% relative to $ US

$A revalued by 5.00% relative to $ US

$A devalued by 12.0% relative to $ US

1970-71 1971-72 1972-73 1973-74 1974-75

(a) The ‘effective exchange rate’ is a weighted average of Australia’s exchange rates with other countries. The method used to calculate the effective exchange rate is described in Appendix 2 of the Tariff Board’s 1972-73 Annual Report,

FIGURE 1.3.5: MOVEMENTS IN AUSTRALIA'S EXCHANGERATEia) WITH SELECTED COUNTRIES: 1970-71 TO 1974-75

United States

West Germany

United Kingdom

I I I | I I I I I | I II I I 11 I I ΐ τ ρ τ ί ΐ I | I I ] Η I Μ 11 ■ | i I | Μ | I 11 I I | I I | l I I I I I

J S D M J S D M J S D M J S D M J S D M J

1970-71 1971-72 1972-73 1973-74 1974-75

(a) Exchange rates are in terms of foreign currency units per $A. Source: End of month selling rates quoted by the Commonwealth Trading Bank.

83

APPENDIX 2.1: FORMS OF ASSISTANCE IN AUSTRALIA

TA BLE 2 .1 .1 : F O R M S O F A SSIST A N C E CLASSIFIED B Y T Y P E O F M E A SU R E : A U STR A LIA — 1970-71 TO 1974-75 ($ million)

Estimates of costs 1

1970-71 1971-72 1972-73 1973-74 1974-75

1. M easures w hich O perate through Costs:

1.1 Material and service inputs A ir navigation charges 2, a . . . .

Phosphate fertilizers bounty 3, b . . .

Postal concessions 4, a . . . . .

Petroleum products subsidy 5, b . . .

Nitrogenous fertilizers subsidy 3, b . . .

Petroleum search subsidy 5, b . . . .

A ir service subsidies 6, b .........................................

D epartm ent of Transport light dues 5, a . .

Income tax deduction of cost of extending tele­ phone lines to rural subscribers 7, a . .

Export Payments Insurance Corporation—pro­ vision of interest free capital 8 ,9 , b . .

Tariff by-laws a ...........................................

1 .2 Factors o f production Income tax concessions—accelerated or special depreciation rates 5 ,1 0 , a . . . .

Investment allowance 5 ,9 , a . . . .

Tax deductions on moneys paid on shares 5 , 11, a Concessional rates o f interest for rural borrow­ ings 12, b .............................................................

National water resources development program : Irrigation projects 5, c .........................................

Investigation into water resources and other water projects 5, c .........................................

Softwood forestry program 5, d . . .

Training of workers 5, 13, 14, 15, b . . .

Ex-Service land settlement (interest concession) 16, b .......................................................................

Flood mitigation 5, c .........................................

Land development 5,17, c . . . .

End-of-year valuation o f trading stock manufac­ tured from grapes 5 ,9 , a . . . .

1 .3 Methods o f production CSIRO—Scientific research 3, b . . .

Industrial research and development scheme 5, b . Special rural research grants 13, 15, b . .

G rants for agricultural extension services 13,15, b Eradication of bovine brucellosis and tuberculosis 13, 15, b .............................................................

Reserve Bank of Australia—rural credits develop­ ment fund 18, b ...................................................

Joint Coal Board—research and investigation 15, b Cattle tick control 5, 15, b . . . .

Aviation—research and investigation 15, b . M inor agricultural research 13, 15, b . . .

50 58 67 41 80

41 46 57 67 30

27 28 25 26 31

24 25 26 22 2

10 10 13 14 14

10 8 8 10 6

2 2 2 2 1

1 2 1

1 1 1 1 1

1 1 1

n.a. n.a.. n.a. n.a. n.a.

154 145 148 165 148

51 52 53 62 41

38 48 40 33 5

17 14 17 n.a. n.a.

21 19 15 12 18

7 7 7 8 9

5 10 5 7

3 4 6 15 50

4 4 4 n.a. n.a.

1 1 1 2 2

1 1 - 2 - 3 2

n.a. n.a. n.a. 15 10

47 54 60 75 90

16 13 14 15 18

12 13 13 10 13

5 6 7 7 8

1 2 4 3 1

1 1 1 1 1

1 1 1 1 1

1 1 1 1

2 2

84

TABLE 2.1.1—continued

Estimates of costs 1

1.4 Marketing andlor distribution Commonwealth contributions for rural roads 19, c Export market development allowance 5, 20, b . Beef roads 5, 15, 21, c . . . . .

Export inspection services 15, b . . . .

Reserve Bank of Australia—advances to marketing authorities 22, b ...................................................

Postal charge concessions on registered newspapers and periodicals 7,23, a . . . . .

Wool: M arketing assistance (price averaging plan) 15, b Advances to Australian Wool Corporation for working capital 13, 15, 24, d . . .

Advances against possible losses of Australian Wool Corporation 13, 15, 24, d . . .

Advances to support the Wool Corporation’s marketing activities 15, d . . . .

Contributions to shippers’ bodies 15, b . .

Export development grants b . . . .

1970-71 1971-72 1972-73 1973-74 1974-75

75 79 83 n.a. 111

17 19 25 25 23

15 14 11 6 2

10 13 14 12 8

15 12 12 14 —

n.a. n.a. 5 6 n.a.

3 4 3 ·· —

n.a. n.a. n.a. — n.a.

n.a. — n.a. n.a. —

— — — — n.a.

_ 11. ■ 11

2. M easures which Operate through Sales R evenue:

2.1 Restrictions on substitute products Tariffs . . . . . . . .

Quantitative r e s tr i c ti o n s .........................................

Anti-dumping and countervailing duties . . Production restrictions on table margarine . .

2 .2 Expansion o f markets Local content schemes . . . . .

Government purchasing policies . . .

Taxation deductions—life insurance premiums and superannuation contributions 7, a . ■ ■

Life insurance companies: Section 115 deduction 5 ,7 ,9 , a . . .

Section 46 rebate 5 ,7 ,9 , a . . . .

Export incentives: G rants 20,25, b . . . . ■ ·

Payroll tax rebates 25, a . . . .

Foreign food aid 26, b . . . . .

Sales tax exemptions for use of fruit juice: Non-alcoholic carbonated beverages containing not less than 5 per cent Australian fruit juice 9,27, a . ...................................................

Pure fruit or vegetable juice 27, a . . .

Cordials and concentrates containing not less than 25 per cent Australian fruit juice 27, a . Wool promotion—Australian Wool Corporation 13, b .........................................................................................

Excise duty concessions on tobacco, beer and brandy 5, 7, 9, 28, a . . . . .

Export and trade prom otion 5, 15, 29, b . .

Provision of free milk for school children 5, 30, b Australian Tourist Commission 15, b . . ■

Coal utilization research grants 15, b . . ·

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a ,

n.a. n.a. n.a. n.a. n.a ·

n.a. n.a. n.a. n.a. n.a·

n.a. n.a. 300 330 360

n.a. n.a. 49 53 30

n.a. n.a. 18 18 15

_ 41 67 92

49 60 19 2 1

13 13 19 30 51

n.a. 25 29 — —

n.a. 5 6 6 n.a.

n.a. 3 4 2 n.a.

18 20 20 16 15

17 18 18 3 2

12 13 15 15 15

10 12 12 8

2 3 3 3 "3

85

TABLE 2.1.1 — continued

Estimates of costs 1

1970-71 1971-72 1972-73 1973-74 1974-75

2 . 3 Support o f prices

H om e consum ption pricing arrangem ents 31, e Shipbuilding assistance 5, b . . .

Price su p p o rt m easures: W heat industry stabilization 5 ,1 3 , b .

B utter a n d cheese bounties 5 ,1 3 , b . .

A pple a n d p e a r stabilization fu n d 5, 13, b Processed m ilk products bo u n ty 5 ,1 3 , b . D ried vine fruits stabilization 5 ,1 3 , b .

W ool deficiency paym ents 5 ,1 3 , b . .

R aw c o tto n b o u n ty 5 ,1 3 , b . . .

Apples— export guarantee 16, b . .

B ook bo u n ty 5, b ............................................

A gricultural tra c to r bo u n ty 5, b . .

Pyrites b o u n ty 32, b ............................................

M etal w orking m achine tools b o u n ty 5, b . Subsidy through a ir m ail conveyance rates 7, b C om pensation fo r sterling devaluations 5, b Cellulose acetate flake bo u n ty 33, b . .

S ulphate o f am m onia bounty 5, b . .

U rea bo u n ty 5, b ............................................

R efrigerator com pressor bounty 5, b . .

3. M easures w hich Operate through I ncome:

3 .1 Emergency assistance

Emergency assistance to fruit industry 5 ,1 3 , b . N atural disaster relief 5, 34, b . . . .

Emergency assistance to woolgrowers 13, b . G rant to egg industry to sustain returns 13, b . G rant to manufacturers o f selectedelectronics com­ ponents 5, b .......................................................

G rant to Electrolytic Zinc Company o f Australia Limited 15, b .......................................................

3 .2 Adjustm ent assistance

Rural reconstruction scheme 5, 35 . . .

Marginal dairy farms reconstruction scheme 5, 35 Structural adjustment assistance (for firms) , .

3 .3 Other assistance through income

Spread o f livestock trading profits over income years a . . . . . . .

Indefinite carry forward of losses for primary pro­ ducers a ..................................................................

Special income tax rates for mutual income of life insurance companies 7 ,9 , a . . . .

Income tax averaging provisions 36, a . .

Exemption from taxation o f certain mining profits 5 , 3 7 , a ..................................................................

Estate duty concessions for primary producers 7, 36, a ..................................................................

G old mining industry assistance 5, b . . .

D rought bonds 7, 36, a ............................................

131 113 121 n.a. n.a.

19 13 31 21 31

29 58 41 12

41 40 29 18 9

— 3 3 3 3

3 2 1 1

1

3

53 1

- 2

” ”

3 3 3 3

2 6

3 3 3 4 4

1 1 2 — —

____ ____ 1 1 2

1 1 1 1 1

22

i

7

~ -

1 1

— —

4

6 2 1 - 1

15 21

2

i

- 5 23 113

1 10 13 9 7

2 4 1 1 2

5

n.a. n.a. · n.a. n.a. n.a.

n.a. n.a. n.a. n.a. n.a.

3 3 3 ____ —

24 22 31 n.a. n.a.

22 15 23 30 27

3 3 3 4 5

3 2 —

8 6

. . N ot significant (less than $0.5m). n.a. Cost of this form of assistance not available. — Nil. '

a Revenue forgone. b G rant or subsidy, c Capital works, infrastructure. d Loan. e Consumer transfer.

TABLE 2 .1 .1 —continued

1 The cost estimates should be interpreted cautiously as (i) some of the measures such as overseas food aid and natural disaster relief listed may not have assistance to industry as their objective, but do in fact assist industries (ii) assistance through the provision o f government owned facilities to industry has not been included (iii) the measures are a mixture of grants, loans and revenue forgone; individual figures do not necessarily

represent the value of assistance to industry and columns should not be added in an attempt to derive total amounts of assistance to industries (iv) in some cases, loans are made available at concessional interest rates. Where the value of the interest concession is available, it has been included in the table. 2 Cost of provision of services to civil aviation industry (as in Budget Papers) less air services subsidy and

less capital works expenditure. 3 Source; D epartm ent of the Treasury, Estimates o f Receipts and Summary o f Estimated Expenditure, 1970-71 to 1975-76. 4 Includes: (i) Telecommunications concessions to press, broadcasting and television organisations.

Source: Review o f the Continuing Expenditure Policies o f the Previous Government, Report of the Task Force appointed by the Prime Minister, the Honourable E. G. Whitlam, Q.C., M .P., June 1973. (ii) Provision of lines for country telephone subscribers.

Sources: Parliamentary Paper No. 116. Review o f the Continuing Expenditure Policies o f the Previous Government, Report of the Task Force appointed by the Prime Minister, the Honourable E. G. Whitlam, Q.C., M .P., June 1973. (iii) Equalisation of telephone rebates of country and metropolitan subscribers.

Sources: Australian Post Office, Financial Statistical Bulletin, 1971-72. Review o f the Continuing Expenditure Policies o f the Previous Government, Report of the Task Force appointed by the Prime Minister, the Honourable E. G. Whitlam Q.C., M .P., June 1973. (iv) Concessional rates for telephone facilities provided to fire brigades.

Source: Review o f the Continuing Expenditure Policies o f the Previous Government, Report of the Task Force appointed by the Prime Minister, the Honourable E. G. Whitlam, Q.C., M.P., June 1973. 5 Source: Department of the Treasury, Budget Speech, 1970-71 to 1975-76. 6 Total of ‘Developmental’ and ‘Essential’ rural services. Subsidies for ‘Essential’ rural services ceased on

30 June 1974 and ‘Developmental’ service subsidies are to be phased out by 30 June 1977. Source: Departm ent of the Treasury, Budget Speech, 1971-72 to 1975-76. 7 Source: Review o f the Continuing Expenditure Policies o f the Previous Government, Report of the Task Force appointed by the Prime Minister, the Honourable E. G. Whitlam, Q.C., M.P., June 1973.

8 Commission estimate o f interest forgone based on rates for government long term bonds. 9 Following proposals of the 1973-74 Budget, these assistance measures were withdrawn or reduced. 10 Special concessions for primary producers included in these figures were withdrawn during 1973-74. Special concessions for mining companies were reduced in the 1974-75 Budget. The estimates are based

on the deductions allowable in the income year in respect of purchases and appropriations in that year, less the depreciation that would have been allowable in that year on the relevant plant purchases or the plant in respect of which the appropriations were made. While the provisions in question do not allow any greater total deduction over the life of the plant and equipment than do the normal depreciation provisions of the income tax law, they result in a deferment of tax which involves a cost to the budget and a benefit, namely, the provision of interest free finance, to the taxpayers concerned. 11 Moneys paid on shares in mining companies after 7 May 1973 are not deductible. 12 Commission estimates of costs of overdrafts, term loans, farm development and Commonwealth Develop­

ment Bank loans. The estimates are as at the end of the financial year. 13 Source: Report o f the Auditor-General upon the Treasurer's Statement o f Receipts and Expenditure and upon other Accounts, 1969-70 to 1974-75. 14 Training of workers includes apprenticeship training, Aboriginal training schemes, and other training

schemes such as NEAT.

87

TABLE 2.1.1—continued

15 Source: Department of the Treasury, Appropriation Bills Nos. 1 and 2, 1970-71 to 1975-76. 16 Commission estimates. 17 Includes War Services land settlement, soil conservation and Brigalow land development, etc. 18 Source: Reserve Bank of Australia, Annual Report, various years. 19 Estimates obtained from the BAE except for the 1974-75 estimate which was obtained from Department

of the Treasury, Payments to or for the States and Local Government Authorities, 1975-76. 20 Incorporated in the new Export Development Grants Scheme from 30 June 1974. 21 Source: Department of the Treasury, Payments to or for the States, 1974-75. 22 Commission estimate of interest forgone, based on the difference between government long term bond

rates and Reserve Bank rates. Source: Reserve Bank of Australia, Statistical Bulletin, various issues. 23 Source: Australian Post Office, Proposed Postal and Telecommunications Charges—Statement by the Postmaster-General, August 1973. The 1973-74 estimate relates to cost if there are no changes in charges. 24 This item is advances net of repayments and is a form of interest-free loan—the true cost is the interest

forgone. 25 Source: Department of the Treasury, Export Incentive Grants and Payroll Tax Export Incentive Rebates, press releases. 26 International Wheat Agreement—Food Aid Convention and emergency food aid to various countries. 27 The sales tax exemptions are estimated as 15 per cent of value of sales.

Source: ABS, Manufacturing Commodities: Principal Articles Produced, various years. 28 Excise duty concession for beer was estimated as the difference between average capacity of a kilderkin and 76.5 litres, multiplied by the number of kilderkins and the excise duty on beer. The concession on brandy was estimated as the difference between the excise duty on brandy and the average excise duty

on other spirits multiplied by the volume of excisable brandy. Source: ABS. 29 This item includes the activities of the Overseas Trade Publicity Committee and the Trade Commissioner Service. 30 Discontinued from the end of 1973. 31 Commission estimates of the difference between domestic sales revenue valued at home consumption

prices and export parity. 32 Sources: ABS, Public Authority Finance: Commonwealth Authorities, 1970-71 to 1971-72. Department of the Treasury, Budget Speech, 1969-70 to 1975-76. 33 Sources: ABS, Public Authority Finance: Commonwealth Authorities, 1972-73 to 1975-76.

Department of the Treasury, Estimates of Receipts and Summary of Estimated Expenditure, 1972-73 to 1975-76. 34 Covers drought, fire, floods, cyclones and other disasters. $66m was spent on Darwin relief and restoration measures in 1974-75. The Queensland Flood Relief Act 1974 provided for $66m for flood relief payments

to July 1976. The New South Wales Flood Relief Act 1974 provided $5.5m for the same purpose. 35 Assistance is made available partly as grants and partly as loans; figure represents grant element only. 36 Estimates obtained from the Commissioner of Taxation. 37 Includes: (i) 20 per cent of profits from certain prescribed minerals.

(ii) Profits from gold mining. (iii) Dividends paid out of profits from sales of petroleum. (iv) Income from sale of mining rights.

8 8

TABLE 2.1.2: FORM S OF ASSISTANCE IN THE RURAL SECTOR(a): 1972-73 TO 1974-75 ($ million)

Estimates of costs

1972-73 1973-74 1974-75

Grants and subsidiesib) Phosphate fertilizers bounty . . . . . . . 57 67 30

Nitrogenous fertilizers subsidy . . . . . . 13 14 14

B utter and cheese bounties . . . . . . . 29 18 9

Marginal dairy farms reconstruction scheme . . . . 1 1 2

G rants for agricultural extension services . . . . 7 7 8

Apple and pear st abi l i zat i on. . . . . . . 3 3 3

Petroleum products price subsidy . . . . . . 26 22 2

Processed milk products bounty . . . . . . 1 1

Fruitgrowing reconstruction . . . . . . . 2 1

W heat industry st abi l i zat i on. . . . . . . 41 12 —

Wool marketing assistance (price averaging plan) . . . 3 —

Dried vine fruits stabilization . . . . . . 1

Apples—export guarantee . . . . . . . — — 2

Total . . . . . . . . . . 182 147 72

Revenue forgone(c) Postal concessions . . . . . . . . 25 26 31

Income tax concessions—accelerated or special depreciation rates, deductibility of certain capital items . . . . . . 28 45 20

End-of-year valuation of trading stock m anufactured from grapes n.a. 15 10

Investment allowance . . . . . . . . 8 8 5

Estate duty concessions for primary producers . . . 3 4 5

Excise duty concessions on tobacco, beer and brandy . . 18 3 2

Income tax deduction of cost o f extending telephone lines to rural subscribers . . . . . . . . . . 1 1 1

D rought b o n d s ................................................... ..........

Sales tax exemptions for use of fruit juice . . . . 39 8 n.a.

Income tax averaging provisions . . . . . . 31 n.a. n.a.

Indefinite carry forward of losses for primary producers . . n.a. n.a. n.a.

Spread of livestock trading profits over income years . . n.a. n.a. n.a.

Other Commonwealth contributions for rural roads . . . . 83 n.a. I l l

Foreign food ai d. . . . . . . . . 19 30 51

CSIRO—scientific research . . . . . . . ' 35 44 54

Rural reconstruction scheme. . . . . . . 13 9 7

National water resources development program: Irrigation projects . . . . . · · · 15 12 18

Investigation into water resources and other water projects . 7 8 9

Wool promotion—Australian Wool Corporation . . . 20 16 15

Special rural research grants . . . . . · · 13 10 13

Export inspection services . . . . . . . 14 12 8

Softwood forestry program . . . . . . . 10 5 7

Beef roads . . . . . . . . . . 11 6 2

Flood mi t i gat i on. . . . . . . . . 1 2 2

Land d e v e l o p m e n t ........................................ .......... - 2 — 3 2

Provision of free milk for school children . . . . 12 8

Eradication of bovine brucellosis and tuberculosis . . · 4 3 1

Reserve Bank of Australia—rural credits development fund . 1 1

1

1

Cattle tick control . . . . . . . 1 1

Overseas promotion of rural products . . . . . 1 1 1

Adjustment assistance for currency variations . . . . - --

89

24059/75—4

TABLE 2.1.2 —continued

Estimates of costs

1972-73 1973-74 1974-75

Minor agricultural research.............................................................

Wool deficiency p ay m en ts............................................................. - 2

Emergency assistance to fruit industry............................................ 2 j - i

T a r i f f s ....................................................................................... n.a; n.a. n.a.

Home consumption pricing a rra n g e m e n ts................................... 121 n.a. n.a.

Concessional rates of interest for rural borrowings . . . . Reserve Bank of Australia—advances to marketing authorities 17 n.a. n.a.

(interest concession)...................................................................... 12 14 —

Ex-Service land settlement (interest concession) . . . . Advances to Australian Wool Corporation: 4 n.a. n.a.

For working capital..................................................................... n,a. —■ n.a.

Against possible l o s s e s ............................................................. n.a. n.a. —

To support wool marketing activities............................................ — — n.a.

Export and trade promotion............................................................. n.a. n.a. n.a.

Production restrictions on table m a rg a rin e ................................... n.a. n.a. n.a.

Natural disaster relief..................................................................... n.a. n.a. n.a.

. . Less than $ 0 .5m.

n.a. Cost of this form o f assistance not available. (а) Some points regarding this table are mentioned in Chapter 2 o f this report (para. 2.4). F o r reasons explained in para. 2.4, figures in the table should not be totalled, except in the case of Grants and subsidies. Further details about some o f the forms o f assistance referred to are given in Chapter 2 and Appendix 2 o f the

Commission’s 1973-74 Annual Report. (б) Budget grants and subsidies which can be allocated entirely to the rural sector. (c) Estimates of gross revenue forgone in individual years. N o adjustments have been made for revenue recouped from previous years or revenue that may be subsequently recouped.

Source: Compiled from data in Table 2 .1 .1 .

90

TABLE 2.1.3: FORM S OF ASSISTANCE IN THE MINING SECTOR {!): 1972-73 TO 1974-75 ($ million)

Estimates of costs

1972-73 1973-74 1974-75

Grants and subsidies 2 Pyrites bounty 3 , 4 ..................................................................... 2

Petroleum search subsidy 3 , 5 .................................................... 8 10 6

Gold mining industry assistance 3 , 6 ........................................... —

T o ta l....................................................................................... 10 10 6

Revenue forgone through taxation concessions 7 Moneys paid on shares 3,8,9, 1 0 ....................................................

Capital expenditure of certain mining enterprises and in respect of transport of certain minerals (excluding deductions in respect of

40 33 5

plant otherwise depreciable) 3, 8, 1 0 , 1 1 ...................................

Deduction in year of purchase and/or appropriation of income for plant used in mining or exploration and in respect of transport of certain minerals which would otherwise be subject only to deprecia-

62 49 41

tion 3 , 8 , 1 0 , 1 1 ..................................................................... 112 85 85

Exemption of certain mining profits 3 , 8 , 1 2 ................................... 23 30 27

Investment allowance 1 3 ............................................................. n.a. n.a. n.a.

Scheme of accelerated depreciation for certain new plant 3,14 . . — — —

Other 15 Bureau of Mineral Resources 16,17 . . . . . . 10 10 11

Joint Coal Board 1 6 , 1 7 ............................................................. 1 1 1

CSIRO—scientific research 17, 18 . . . . . . 7 9 10

Coal utilization research grant . . . . . . .

State Departments of Mines: 17,19 New South W a le s ..................................................................... 5 6 7

Victoria....................................................................................... 2 3 3

Queensland . . . . . . . . . . 5 6 7

South A u s t r a l i a ..................................................................... 3 3 n.a.

Western A u stra lia ..................................................................... 5 6 7

T a s m a n i a .............................................................................. 1 1 1

Tariffs 2 0 ....................................................................................... n.a. n.a. n.a.

Concessional charges for government services 21 . . . . n.a. n.a. n.a.

. . Less than $0.5m.

n.a. Cost of this form of assistance not available. , 1

1 Some points regarding this table are mentioned in Chapter 2 of this report (para. 2.4). F o r reasons explained in para. 2.4, figures in the table should not be totalled, except in the case of Grants and subsidies. Further details about some of the forms of assistance referred to are given in Chapter 2 and Appendix 2 of the Commission’s 1973-74 Annual Report. 2 Budget grants and subsidies which can be allocated entirely to the mining sector. 3 Source: Department of the Treasury, Budget Speech, 1973-74 to 1975-76. 4 The bounty expired on 31 May 1972. The am ount shown for 1972-73 represents final payments under the

scheme. 5 The Petroleum Search Subsidy Scheme expired on 30 June 1974. The am ount shown for 1974-75 represents payments made for approved exploration programs completed before the expiry date. 6 An amendment to the Gold Mining Industry Assistance Act in 1972 provided for the extension of the

scheme until 30 June 1975. 7 Estimates of gross revenue forgone in individual years. N o adjustments have been made for revenue recouped from previous years or revenue that may be subsequently recouped. 8 Source: Commissioner of Taxation. 9 Moneys paid on shares in mining companies after 7 May 1973 are not tax deductible.

91

TABLE 2.1.3 — continued

10 Although the figures shown in the table represent total revenue forgone, the extent of assistance is actually the notional interest forgone. 11 Immediate deductibility for capital expenditure by general mining and petroleum mining companies and deductions for appropriations by general mining companies have been withdrawn in respect of expenditure

incurred or appropriations made after 17 September 1974. These concessions continue, however, in respect of expenditure incurred before 1 July 1976 if the expenditure was contracted for prior to 18 September 1974. Plant and development expenditure is now deductible over the life of the relevant mine or as depreciation. Expenditure on facilities for the transport of minerals is now deductible over 20 years instead of 10 years.

The 10 year write-off continues in respect of expenditure incurred on or before 17 September 1974, or after that date and before 1 July 1976 under a contract made on or before 17 September 1974. 12 Dividends declared after 21 August 1973 out of exempt profits of gold mining, mining of prescribed metals or minerals, the sale of mining rights and profits from the sale of locally produced petroleum are liable to

tax in the shareholders’ hands. The one-fifth exemption of income from mining prescribed metals and minerals has been withdrawn as from the commencement of the 1974-75 income year. 13 The investment allowance was withdrawn in respect of expenditure incurred on or after 22 August 1973 unless incurred under a contract entered into before that date. 14 An optional scheme of accelerated depreciation, at twice the scheduled rates, was announced on 9 December

1974, to apply to new plant and equipment first used or installed ready for use by taxpayers in the manu­ facturing and primary industry sectors on or after 1 July 1974 and before 1 July 1975. The scheme applies to those classes of new plant and equipment which would have attracted eligibility for the income tax invest­ ment allowances had these still been in operation. The 1975-76 Budget Speech indicated that this scheme

would be continued beyond 30 June 1975 and extended in its coverage. 15 Excluded from the table are several items, namely royalties and export levies, diiferential freight charges, and the crude oil price differential, which may be interpreted as “negative” rather than “positive” assistance i.e. they involve a loss or withdrawal of funds from industry. 16 Source: Department of the Treasury, Appropriation Bills Nos. 1 and 2, 1973-74 to 1975-76. 17 Expenditures by government institutions represent indirect forms of assistance eg. through the provision of

technical services and skills, the undertaking of research and the dissemination of information obtained from research studies, and the planning and initiation of projects for the development of industry. However, some of the functions performed by these institutions are normal administrative activities of government and only a portion of the amount shown can be regarded as assistance. 18 Source: CSIRO, Annual Report, 1972-73 and 1973-74. These estimates of the research expenditure relevant

to the petroleum and mining industries have been derived from CSIRO summaries of the annual expenditure on the processing and use of mineral products and on the Australian Mineral Develop­ ment Laboratories. The figure for 1974-75 has been calculated as a proportion of total CSIRO expenditure funded by the Government. 19 Source: State Government Budget Papers and Estimates of Revenue and Expenditure, various issues.

Figures for 1974-75 are estimated expenditures. Figures for previous years are actual expenditures. 20 General rates of duty are commonly between 10 per cent and 20 per cent ad valorem and are often combined with a specific rate of duty. 21 It was not possible to allocate, from total expenditure on these forms of assistance, the proportion which

has been used by the mining sector.

92

TABLE 2.1.4: FORMS OF ASSISTANCE IN THE MANUFACTURING SECTOR(a): 1972-73 TO 1974-75 ($ million)

Estimates of costs

1972-73 1973-74 1974-75

Grants and subsidies(b) Export incentive grants and rebates . . . . . . 60 69 93

Shipbuilding assistance . . . . . . . . 31 21 31

Export market development allowance........................................... 25 25 23

Industrial research and development schem e.................................. 14 15 18

Book bounty . . . . . . . . . . 3 3 6

Structural adjustment assistance (for firms) . . . . . 5

Agricultural tractor bounty . . . . . . . . 3 4 4

Refrigerator compressor bounty . . . . . . . -- - — 4

Metal working machine tools bounty . . . . . . 1 1 2

Export development grants . . . . . . . . — — —

Grants to manufacturers of selected electronic components . . — —

Grant to Electrolytic Zinc Company of Australia Limited . . — —

Cellulose acetate flake b o u n t y ................................... ........ .

T o ta l.................................................... ........ 137 137 186

Revenue forgone(c) Investment allowance . . . . . . . . . 45 54 36

Postal charge concessions on registered newspapers and periodicals . 5 6 n.a.

Export Payments Insurance Corporation—provision of interest free capital . . . . . . . . . . . 1 1 1

Other Training of workers . . . . . . . . . 6 15 50

CSIRO—scientific research . . . . . . . . 18 22 26

Tariffs n.a. n.a. n.a.

Tariff by-laws . . . . . . . . . . n.a. n.a. n.a.

Quantitative restrictions . . . . . . . . n.a. n.a. n.a.

Local content schemes . . . . . . . . n.a. n.a. n.a.

Government purchasing policies . . . . . . . n.a. n.a. n.a.

Anti-dumping and countervailing duties . . . . . n.a. n.a. n.a.

Export and trade promotion . . . . . . . n.a. n.a. n.a.

Natural disaster relief........................................... n.a. n.a. n.a.

.. Less than $0.5m. n.a. Cost of this form of assistance not available. (а) Some points regarding this table are mentioned in Chapter 2 of this report (para. 2.4). For reasons explained in para. 2.4, figures in table should not be totalled, except in the case of Grants and subsidies.

Further details about some of the forms of assistance referred to are given in Chapter 2 and Appendix 2 of the Commission’s 1973-74 Annual Report. (б) Budget grants and subsidies which can be allocated entirely to the manufacturing sector. (c) Estimates of gross revenue forgone in individual years. No adjustments have been made for revenue

recouped from previous years or revenue that may be subsequently recouped. Source: Compiled from data in Table 2.1.1.

93

TABLE 2.1.5: FORM S OF ASSISTANCE IN THE SERVICES SECTOR(a): 1972-73 TO 1974-75 ($ million)

Estimates of costs

1972-73 1973-74 1974-75

Grants and subsidies(b) Air service subsidies . . . . . . . . . 2 2 1

Subsidy through air mail conveyance r a t e s ................................... 1 1 1

Aviation research and in v e s tig a tio n ........................................... 2 2

Contributions to shippers’ bodies....................................................

Revenue forgone(c) Tax deductions—life insurance premiums and superannuation con­ tributions ............................................................................. 300 330 360

Air navigation charges . .................................................... Cl 41 80

Life insurance companies: Section 115 d e d u c ti o n ............................................................ 49 53 30

Section 46 r e b a t e ..................................................................... 18 18 15

Special income tax rates for mutual income of life insurance companies 3 — —

Department of Transport light d u e s ........................................... 1

Other Australian Tourist Commission.................................................... 3 3 3

.. Less than SO.5m. n.a. Cost of this form of assistance not available. (а) Some points regarding this table are mentioned in Chapter 2 of this report (para. 2.4). For reasons explained in para. 2.4, figures in the table should not be totalled, except in the case of Grants and subsidies.

Further details about some of the forms of assistance referred to are given in Chapter 2 and Appendix 2 of the Commission’s 1973-74 Annual Report. (б) Budget grants and subsidies which can be allocated entirely to the services sector. (c) Estimates of gross revenue forgone in individual years. No adjustments have been made for revenue

recouped from previous years or revenue that may be subsequently recouped. Source: Compiled from data in Table 2.1.1.

94

APPENDIX 2.2: RECENT CHANGES IN ASSISTANCE FOR SELECTED INDUSTRIES IN AUSTRALIA TABLE 2.2.1: AVERAGE EFFECTIVE RATES OF ASSISTANCE FOR SOME RURAL ACTIVITIES: 1971-72 TO 1973-74

(Per cent)

1971-72 1972-73 1973-74

Dried vine fruit i n d u s t r y ® ................................... . . . 21 - 4 3

Apple and pear i n d u s t r y ® ................................... . . . 1 -1 27

Dairy farming industry®, Id), (e), If) . . . . . . 46 30 89

Beef cattle in d u s t r y ® ............................................ . . . 4 n.a. n.a.

n.a. Not available. (c) Source: BAE, The Australian Multi-Purpose Grape Growing Industry: Preliminary Results of an Economic Survey, May 1975. (6) Source: BAE, The Australian Apple and Pear Industry: Preliminary Results of an Economic Survey,

April 1975.

(c) Source: BAE, Protection to Dairy Farming in Australia, April 1975. Id) Excludes the factory processing sector of the dairying industry. (e) For the three year period 1967-68 to 1969-70, the assessed average effective rate of assistance was 74 per cent. If) The rate of assistance is the rate applicable to manufactured milk. The additional assistance to the fluid

milk sector above this rate has been omitted. (?) Source: BAE, The Australian Beef Cattle Industry, August 1975.

95

TA BLE 2 .2 .2 : S U M M A R Y OF R E C O M M E N D A T IO N S B Y TH E TARIFF B O A R D A N D IN D U ST R IE S A S S IS T A N C E C O M M ISSIO N FO R M A NU F AC TU RING IN D U ST R IE S REPORTED O N DURING 1973-74 AN D 1974-75(a)

Report

Nominal rates

Before report Recommended

Average(6) Range(c) Average Range

Gross subsidy Average effective

equivalent^/) rates

Before Recom- Before Recom-

report mended report mended

N et subsidy equivalent^)

Before Recom- report mended G overnment decision(/)

Sm

14 . Recommendations generally accepted with m inor adjustments arising from international commitments. • R ates generally from 20 % to 40 %.

n.a. . N o decision announced.

Products o f the printing industry(g) . 37 0-47 33 0-35 110 74 33 27 60

Consumer electronic equipment and components 30(Λ) 0-1000 + 28 0-30 58 36 n.a. 45 29

Domestic appliances, heating and cool- ling equipment, etc. 33(A) 0-70 24 0-35 84 60 25 17 n.a.

Cigarette paper. . . . . 23 0-45 20 20-20 (0 (0 35 30 0 )

Fibreboard containers, paper and textile 38 0-47 26 0-30 56 38 37 24 35

Propylene oxide derivatives . . 5 0-30 18 0-30 (0 (0 75 90 (0

Woven man-made fibre fabrics . . . (A)45 0-100 0 )4 0 0-40 18 13 120 80 16

Paper . . . . 16 0-23 14 0-20 (0 (0 16 14 (0

Calcium carbide . . . . 37 26-44 25 25-25 (0 (0 n.a. 50 (0

Glass and glassware . 16 0-45 15 0-40 (0 (0 15 14 0)

49 . Recommendations accepted. . Book bounty from 25 % to 33.3 %.

24 . Recommendations rejected. . Recommended 25 % components, 30% made-up appliances; 35% across the board implemented.

. Recommendations generally accepted. . Some variations to the phasing in o f new rates.

( 0 . Recommendations accepted. . 20% duty.

17 . Recommendations accepted. . 25% on boxes, bags, etc., o f paper or paperboard; duties on other goods unchanged.

(0 . Recommendations accepted. . Duties predominantly 20 %.

11 . Recommendations accepted for m ost fabrics. . Long term rate o f 2 2 .5 % on

polyolefin fabrics to be phased in over 2 years. . Short term tariff quotas on some fabrics.

(0 . Recommendations accepted. . Printing and writing papers 20% ; wrapping paper minimum rates.

(0 . Recommendations rejected. . Existing assistance maintained.

(-·) . Recommendations accepted as long term measures. . R ates to range from m inimum to 40% ; TAA to investigate short

term assistance.

Steam, gas and water fittings . • n-a · (M l 23 20-25 n.a. n.a. n·8· n.a. n.a.

Industrial tractors . « . . n.a. 0-40 0)20 0-20 n.a. 1 n -a- 35 "•a·

Gloves, mittens or mitts . . . 9.38 plus

15c/pr

0-36 25 0-25 (&) (A) 70 24 (*)

Food processing machinery, etc. • 0)41 0-41 0)25 0-25 n.a. n.a. 45 24 n.a.

Polyamide and polyester yarns , . 15 0-15 15 0-15 n.a. n.a. 20 20 n.a.

Tyre cord and tyre cord fabrics . . 22 0-38 15 0-30 2 1 31 15 1

Foundation garments · . „ 39 0-43 25 0-25 9 6 50 29 7

Wood working and metal working machinery, etc. 30 0-43 20 0-25 10 7 33 24 6

1974-75: Passenger motor vehicles, etc. . . 34 0-45 25 0-35 n.a. 39 22 180

Nitrogenous fertilizers · . w 6 0-30 0 0-0 n.a. 0 n.a. n.a. n.a.

Textile and appare machinery, and paper making and printing machinery. 31 0-41 15 0-25 η·3· n * n.a. n.a. n.a.

Diesel engines exceeding 1500 kW(/) . 0 0-6 0 0-0 1 0 100 0 1

1

( k )

1

4

. Recommendations accepted. . Fittings 20% ; valves and actuators 25 %.

. Recommendations accepted. . Crawler tractors, minimum rates; others 20 %. . Components a t tractor base rates.

. Recommendations accepted. . 25 % on industrial gloves; others minimum rates.

Recommendations generally accepted. M inimum rates, bread grain and dried vegetables; 15% sugar manufacture; 25% others.

. Recommended long term duty o f 15 % accepted. . Short term quotas introduced

. Recommendations to be phased

. Viscose fabric, 37.5% until 31.12.76; 2 5 % until 31.12.77; 15% thereafter. O ther fabric, 20 % until 31.12.75;

15% thereafter.

Recommendations to be phased in (25%). Tariff quota introduced for brassieres.

4 . Recommendations accepted. . Predominantly 25 %, 15 % for certain gas and electric machinery.

101 . Recommendations extensively modified. . 35 % o n C BU cars if imports less than 20% o f registrations,

otherwise 45 %. . Unassembled cars 10% less than CBU cars with rate progressing to 35 % over time. . 25 % on components. . 85 % company average local

content plan.

n.a. . N o decision announced.

n.a. . Recommendations accepted in the long term. . Rates to be phased in over 3 years.

0 . Recommendations o f no

assistance generally accepted. . Production under existing arrangements m aintained until

31.12.75.

TA BLE 2 .2 .3 : STR U C TU RA L A D JU ST M E N T A SSISTA N C E SC H E M E S FOR IN D U S T R Y A N D IN D IV ID U A L S

Scheme Number(

($’000)

Structural Adjustment A ssistance for Industry General provisions :(6) Electronics industry . . . . . . . . . . 6 264

Apparel in d u stry ........................................... . . 5 37

(c)ll 301

Special assistance for non-metropolitan areas (SANMA): Apparel in d u stry ................................... ........ . . 12 870

Textiles industry . . . . . . . . . . . 23 3 510

Engineering industry . . . . . . . . . . 3 357

Leather in d u s try ........................................... . . 1 284

Food i n d u s t r y ................................... ........ . . 1 35

40 5 056

Fruit juice decision (removal of sales tax concessions) . . . School milk scheme: . . 6 348

Milk vendors. . . . . . . . . . . . 17 49

Milk processors . . . . . . . . . —

17 49

Total for industry . . . . . . . . . . 74 5 754

I ndividuals Income Maintenance Scheme (Special Readjustment Assistance)(aT) . . . 3 630 51 040 Regional Employment Development (RED) Scheme . . . . . (e)29 829 60 397

National Employment and Training (NEAT) Scheme . . . . . 239 29 946

Special Unemployment Relief to States. . . . . . . . 7 567 40 003

Total for individuals . . . . . . . . 181 386

(a) For industry, the number of applications in respect of which payments have been made, from the com- mencement of the schemes to 14 July 1975; for individuals, the number of persons currently receiving pay-ments as at 30 June 1975. The payment figures for individuals are total Budget expenditures for 1974-75 under each of the schemes. All schemes were commenced during 1973 or 1974. (6) All payments have been for closure compensation.

(c) In addition, there are a further 33 applications which have been approved but for which payments have not yet been determined. '

(d) This scheme relates to persons who have been unemployed as a result of certain government decisions, viz. . The 25 per cent Tariff Reduction as from 19 July 1973; . The Consumer Electronic Equipment and Components Tariff Decision as from 20 November 1973; . The Reduction in Assistance to Shipbuilders as from 19 December 1973; . The Domestic Appliances Tariff Decision as from 24 January 1974;

. The Lifting of Tariff Quotas on Woven Shirts and Knitted Outerwear as from 28 February 1974; . The Dairy Industry Adjustment (in respect of dairy factory or other ancillary workers, e.g. cream carters displaced as a result of such adjustment) as from 1 July 1974; . The Passenger M otor Vehicle and Component Decision as from 15 November 1974; . The Woven Man-made Fibre Fabrics Tariff Decision as from 10 December 1974;

. The Removal o f Sales Tax Exemption on Aerated Waters as from 12 March 1975. (e) Includes 27 942 persons who had previously been unemployed.

Sources: Department of Manufacturing Industry. Department of Labor and Immigration. Departm ent of the Treasury, Appropriation Bill No. I, 1975-76. Department of the Treasury, Payments to or fo r the States and Local Government Authorities, 1975-76.

99

APPENDIX 2.3: TEMPORARY ASSISTANCE

1. The downturn in economic conditions in 1974-75 has been accompanied by a consider­ able increase in the number of requests by industries for temporary assistance against import competition. This is illustrated by the figures presented in Table 2.3.1. While only one report on temporary assistance was for­ warded to the Minister by the relevant

authority in 1973-74, twenty-one reports were signed toy the Temporary Assistance Authority and the Textiles Authority in 1974-75. This was the highest number for any year since

1962-63.

2. A feature of the temporary assistance granted to manufacturing industries in 1974­ 75 is that in many cases it has taken the form of quantitative restrictions on imports (Table

2.3.2). During 1974-75 such restrictions have been imposed on a greater scale than at any time since import licensing ended in 1960. Other import restrictions recently imposed are listed in Tables 2.3.3 and 2.3.4. At present

approximately 18 per cent of employees in the manufacturing sector are employed in industries directly assisted by import restric­ tions (Table 2.3.5), although other industries, such as the motor vehicle components indust­ ries, are indirectly assisted.

3. Three forms of import restrictions are currently in operation: • Import quotas, which impose an upper limit to the value or volume of imports

of a particular commodity, or group of commodities. Examples are the quotas imposed on imports of motor vehicles and footwear. • Tariff quotas, which provide for an addi­

tional tariff on imports above a specified level. These quotas do not therefore set an absolute limit to the level of imports. However, if the additional duty is set at

a prohibitively high level, tariff quotas will have the same effects as import quotas. Examples of tariff quotas are those imposed on certain clothing and

textile goods and some domestic appli­ ances. • Voluntary export restraints, under which, after discussions initiated by the Austra­

lian iGovernment, overseas Governments agree to restrict exports to Australia of

the commodities concerned, to specified levels. Examples of these restraints are those negotiated with certain South East

Asian countries with regard to various clothing and textile goods.

The effects of quantitative restrictions 4. Quantitative restrictions can have the same protective effect as tariffs, since for every quota there is an equivalent tariff that

would reduce imports to the same level. These restrictions therefore impose the same two costs upon the community as tariffs, although not necessarily to the same extent:

• A production cost, since productive resources will be attracted into the quota- assisted industries and away from more efficient industries with lower levels of assistance or none at all. Under tariff quotas, there is a limit to this cost—the domestic cost of production can increase only to the level allowed by the higher rate of duty. With import quotas there is no such limit. In a period of high general unemployment, however, the cost asso­ ciated with quotas is reduced, since in the absence of protection displaced resources might remain unemployed rather than find employment in low cost industries. • A consumption cost, since the imposition

of quotas allows importers and domestic producers to raise the prices of their goods, thereby reducing consumption. In the absence of rigidities in the price system, a quota system encourages an importer to allocate his restricted supply between consumers by increasing his prices. This allows domestic producers of similar goods to increase their prices up to the same amount. However, in certain circumstances—for example, where they

are prevented by administrative con­ straints or where market imperfections exist—importers will not increase their prices to the extent necessary to bring supply and demand into equilibrium, and waiting lists for the imported goods will develop. In this case, part of the cost to the consumer is disguised, but a con­ sumption cost still exists if some demand is directed to the products of the local

100

manufacturers who have been able to increase their prices.

5. In other respects quantitative restrictions are dissimilar to tariffs. While it is possible to measure the amount of assistance afforded by a tariff to an industry’s value added, a feature of quotas is the extreme difficulty of measur­

ing their protective effect. This not only impedes public scrutiny, but means that the authorities are unable to set assistance for an industry consistent with assistance given to other industries. A quota may,

therefore, disguise a rate of assistance which the community would reject as being un­ acceptably high were it provided by means of a tariff or subsidy.

6. The nominal tariff equivalent of a quota is that tariff which would restrict imports to the same level as the quota. In theory this

could be calculated by measuring the price elasticity of import demand for the protected goods; but because of a lack of data it has not been possible to make reliable estimates.

If import licences were auctioned, the nominal tariff rate equivalent of the quota could be estimated from the average auction price divided by the average fob value of the goods in question. Although the Australian Govern­

ment does not sell import licences, it was reported that in 1974 export licences for knitted shirts on which voluntary restraints have been negotiated were being sold for

HK$80 per dozen shirts in Hong Kong,1 where free buying and selling of export licences for Australia occurs. This price would indicate an equivalent nominal rate of 109 per cent and an equivalent effective rate of at

least 140 per cent, in addition to already high levels of assistance afforded the industry by way of tariffs. If an additional duty of 109 per cent had been imposed, instead of the equivalent voluntary export restraint being

negotiated, it would have yielded customs revenue amounting to approximately $ 1.25m on imports from Hong Kong alone in

the period 1 September 1974 to 30 June 1975.2

7. From this it may be observed that quanti­ tative restrictions have different income distri­ bution effects from equivalent tariffs. Tariffs

1Far Eastern Economic Review, 8 August 1975, p. 35. 2Monthly data on imports of knitted shirts from Hong Kong were obtained from ABS'. To calculate the effective rates, details of materials/output ratios

and average duty on tradeable inputs were obtained from evidence presented to the Tariff Board inquiry into Knitted Shirts (1971).

give rise to a redistribution of income from consumers to local producers, who are enabled by the tariff to increase their prices, and to the Australian Government, which gains cus­

toms revenue. Quantitative restrictions also involve the redistribution of income from consumers to producers, but under the present system of quota allocation the Government

gains no revenue. Instead, since the prices remain the same, windfall gains accrue either to the local importers or the foreign export­ ers (or both). In the case of voluntary export

restraints, this windfall gain may accrue either to foreign Governments, who can auction or otherwise sell export licences, or to foreign exporters, who can sell their goods to Austra­ lian importers for a higher price. Evidence

that such a redistribution of income from Australian consumers to foreign exporters has occurred is contained in a Customs and

Excise Notice1 2 3 which states that ‘Recent inquries have shown that in a number of cases importers of apparel from Hong Kong are being debited with an extra charge equiva­ lent to the cost of purchasing export quotas’.

If a tariff rather than voluntary restraints had been used, the same protective effect could have been obtained, but this revenue would have been gained by the Australian Govern­

ment rather than by foreign exporters.

8. If any of the relevant markets have

monopoly elements, the imposition of a quota rather than a tariff may allow a greater redis­ tribution of income from consumers to pro­ ducers. If a potential domestic monopolist is protected by a tariff, he can charge only the

import price plus the tariff, since if a higher price were charged imports would increase. With an equivalent quota, the domestic mono­ polist is insulated from the potential addi­ tional competition from imports and is able

to set his price and restrict output so as to make monopoly profits. Quantitative restric­ tions, therefore, may promote monopolistic pricing policies.

9. Quantitative restrictions have other dis­ advantages. Import licences are frequently allocated to importers on the basis of past market shares, and potential importers with

new products which may accord with con­ sumer’s changing tastes may therefore be un­ able to gain access to the market. Quotas may,

’Department of Customs and Excise, Customs and Excise Notice No. 75/44, Canberra, 20 March 1975.

101

therefore, perpetuate sub-optimum consump­ tion patterns. Assuming a competitive market, this disadvantage would be reduced if the Government auctioned import licences, since

overseas manufacturers with new products would have an opportunity to gain access to the market.

10. Finally, quantitative restrictions are more expensive to administer than tariffs.

11. The main advantage of quantitative restrictions as a form of temporary assistance is that they are a certain means of reducing imports to a predetermined quantity. The level of imports allowed by a tariff can never be forecast with complete accuracy, and it might be that a temporary duty could be set at too low a level to provide the intended protection to an industry experiencing temporary

difficulties.

102

TABLE 2.3.1: REPORTS ON REQUESTS FOR TEMPORARY ASSISTANCE: 1960-61 TO 1974-75

Number of reports

Number of reports

recommending assistance

Duration of temporary assistance

Average number Range

of months in months(o) * ( б )

1960-61 . 14 8 12 9-21

1961-62 . 36 31 11 3-21

1962-63 . 29 25 13 8-17

1963-64 . 8 7 15 6-24

1964-65 . 3 3 21 19-22

1965-66 . 6 6 29 10-70

1966-67 . 12 11 30 10-61

1967-68 . 6 5 27 13-52

1968-69 . 7 7 32 17-38

1969-70 . 5 5 21 13-32

1970-71 . 5 4 19 4-33

1971-72 . 5 5 22 7-32

1972-73 . 3 (6)3 (6)12 8-16

1973-74 . 1 — — —

1974-75 . . 21 (<011 (c) (c)

(а) Shortest and longest period for which recommended temporary assistance applied. (б) Includes one report for which temporary assistance still applies. (c) Includes reports for which temporary assistance still applies.

103

TA BLE 2 .3 .2 : TARIFF Q UOTAS IN TRO D U C ED SIN C E 1 J U L Y 1974 A N D O PERATIVE A S A T 1 J U L Y 1975

Commodity Tariff quota period Tariff quota(a)

Reference:

Im ports during A dditional tariff on above Customs

1973-74 quota imports Notices

$

Acrylic apparel yarns (finer than 120 tex) . .

Polyester and polyamide yarns . . . .

Woven man-made fibre fabrics . . . .

Towels . . . . . . . .

Curtains . . . . . . . .

Bed sheets, pillow cases, bolster cases (including sets thereof) C otton sheeting for use as or in making up bed linen, not being fabric having a raised nap

K nitted or crocheted net fabrics and fabrics resembling lace, wholly or partly o f man-made fibres, not con­ taining wool, not being fabrics suitable for apparel Knitted and crocheted fabrics of man-made fibres

(excluding net fabrics) Brassieres . . . . . . . .

M en’s and boys’ shirts (undergarments) . . .

M en’s and boys’ woven pyjamas and other woven nightwear M en’s, youths’ and boys’ suits . . . .

Men’s and boys’ coats (other than ski-jackets, parkas and rainwear), woven M en’s, youths’ and boys’ shorts . . . .

Certain female outergarments . . . .

Dressing gowns, kiminos and bathgowns (excluding men’s and boys’ woven garments) Swimwear . . . . . . : .

Babies’ napkins . . . . . . .

C K D m otor vehicle assembly packs . . .

Electric refrigerators, domestic (including those incor­ porating or combined with freezers) o f gross internal capacity—200 to 454 litres Exceeding 454 litres . . .

Electromechanical clothes drying machines, domestic Electromechanical clothes washing machines, domes-Precision ground steel ball bearings . . .

3 .1 2 .7 4 - 2.12.75

U p to 2 years from 9.12 .7 4 U p to 2 years from 9.12.74

3 .1 2 .7 4 - 2.12.75

From 6.6.75 and apply initially for 1 year From 6.6 .7 5 and apply initially for 1 year

From 6.6 .7 5 and apply initially for 1 year From 6 .6 .7 5 and apply initially for 1 year

100% o f volume o f 1972-73 imports ( = 2 638 000 kg) 100% o f volume o f 1972-73 imports ( = 6 251 000 kg) (first year)

100% of volume o f 1972-73 imports ( = 65 940 000 sq m )(first year) 100% o f volume o f 1972-73 imports ( = 2 392 000 sq m ) 4 000 000 sq m (first year)

$750 000 vfd (first year)

20 000 000 sq m (first year)

$800 000 vfd (first year)

2 970 000 kg

9 590 000 kg

86 628 000 sq m(Z>)

5 344 000 sq m

5 628 000 sq m

$5 700 000

58 992 000 sq m

$1 267 000

3 .12.74-2.12.75

U p to 2 years from

100% o f volume o f 1972-73 imports ( = 3 296 000 kg) 2 660 000 units (first year)

4 654 000 kg

3 036 000 unit

1 .1 .7 5 - 31.12.76

1 .1 .7 5 - 31.12.76

1 .3 .7 5 - 29.2.76

4 500 000 units (1975) 8 500 000 units (1976) 800 000 units (1975) 1 200 000 units (1976)

45 000 units

6 704 000 units

1 188 000 units

97 000 units

1 .3 .7 5 -2 9 .2 .7 6 200 000 units 270 000 units

1.3.75 -2 9 .2 .7 6 800 000 units 2 920 000 units

1.3.7 5 -2 9 .2 .7 6 6 000 000 units 8 616 000 units

1.3.7 5 -2 9 .2 .7 6 120 000 units 188 000 units

1 .3 .7 5 -2 9 .2 .7 6 600 000 units 1 097 000 units

1 .3 .7 5 -2 9 .2 .7 6 600 000 units n.a.

1 .1.75-31.12.79 Production in 1974 plus annual

growth rate o f 3 %

n.a.

1 .3 .7 5 - 29.2.76

1 .3 .7 5 - 2 9.2.76 1 .3 .7 5 - 29.2.76 1 .3 .7 5 - 29.2.76

20 000 units 2 500 units 70 000 units 20 000 units

96 000 units 3 000 units 112 000 units 76 000 units

1 .3 .7 5 -2 9 .2 .7 6 2 000 000 units 5 630 000 units

$4.00 per kg

$2.00 per kg (processed) $1.00 per kg (raw) $0.30 p er sq m

$2.00 per sq m

$4.00 per sq m

$14.00 per kg

$2.00 per sq m

$2.00 per sq m

$2.00 p er sq m

$2.50 each

$9.00 per kg

$9.00 per kg

$25.00 per suit

74/144 (C)

74/153 (C)

74/154 (C)

74/144 (C)

75/30 (B)

75/30 (B)

75/30 (B)

75/30 (B)

74/144 (C)

74/151 (C)

75/7 (C)

75/7 (C)

75/34 (C)

$15.00 per garment

75/8 (B) 75/34 (C)

$8.00 per pair

75/8 (B) 75/34 (C)

$12.00 per garment

75/8 (B) 75/34 (C)

$9.00 per garment

75/8 (B) 75/34 (C)

$4.00 per garment

75/8 (B) 75/34 (C)

$1.00 per sq m

75/8 (B) 75/34 (C)

20% phasing down to 10% 75/8 (B) 75/10 (C)

2 2 i% 75/39 (C)

m ° / 0 75/39 (C)

20% 75/39 (Q

15% 75/39 (C)

20% 75/43 (C)

n.a. Not available. (?) The tariff quota specified is shown first. The figures in brackets were calculated by the Commission and show the quantity o f im ports that would be equivalent to the tariff quota specified, (o) Excludes 2 633 000 metres and 19 000 kg o f woven man-made fibre fabrics imported during 1973-74. Sources: Based on information supplied by the D epartm ent o f Overseas Trade and the D epartm ent o f M anufacturing Industry.

TABLE 2 .3 .3 : IM P O R T LIC E N SIN G IN TR O D U C ED SIN C E 1 J U L Y 1974 A N D O PERATIVE A S A T I J U L Y 1975

TABLE 2.3.4: VOLUNTARY RESTRAINT ARRANGEMENTS(a) INTRODUCED SINCE 1 JULY 1974 AND OPERATIVE AS AT 1 JULY 1975.

Reference:

Restraint Imports Customs

Commodity period during 1973-74 Notices

People’s Republic of China (figures exclude Taiwan): Knitted tracksuits, playsuits and romper suits (other than adult) . . . 1.7.74—30.6.75 n.a.

India: Woven dresses . . . . . 1.7.74—30.6.75

Woven shirts and blouses for women, girls and infants . . . . . 1.7.74—30.6.75

Hong Kong: Knitted tops (ie. coats, jumpers, cardigans, outerwear shirts, blouses and the like) .

D r e s s e s ...........................................

Trousers and jeans for men and boys . . Woven shirts and blouses for women, girls and i n f a n t s ...................................

Woven coats for women, girls and infants . Woven nightwear for women, girls and i n f a n t s ...........................................

1.7.74— 30.6.75 1.5.75— 30.6.76 f l . 7.74—30.6.75' 1 1.7.75—30.6.76 1.5.75— 30.6.76 1.7.74— 30.6.75 1.5.75— 30.6.76 / l . 7.74—30.6.75' \1.7.75—30.6.76_

1.5.75— 30.6.76

Macao: Knitted tops (ie. coats, jumpers, cardigans, outerwear shirts, blouses and the like) . D r e s s e s ...........................................

Trousers and jeans for men and boys . . Woven shirts and blouses for women, girls and i n f a n t s ...................................

Woven nightwear for women, girls and i n f a n t s ...........................................

1.5.75— 30.6.76 1.5.75— 30.6.76 1.5.75— 30.6.76

1.5.75— 30.6.76

1.5.75— 30.6.75

5 308 000 units

559 000 units 958 000 units 334 000 units f*

1 116000 units

232 000 units_

1 30 000 units 176 000 units ^

Korea, Republic of: Knitted tops (ie. coats, jumpers, cardigans, outerwear shirts, blouses and the like) . Knitted d r e s s e s .................................

Woven shirts and blouses for women, girls and i n f a n t s ..................................

1.1.75— 31.12.75 2 274 000 units") 1.1.75— 31.12.75 138 000 units [

1.7.75— 30.6.76 85 000 u n its/

75/42 (C)

75/42 (C)

75/42 (C)

n.a.

75/11 (C) 75/42 (C)

n.a. Not available. ■

.. Insignificant. (a) Negotiated restraint levels are based on the provisions of the General Textiles Arrangement which provide that annual trade restraint levels shall be no less than the level of trade which occurred in the twelve months terminating 2 months (3 months if recent statistics not available) prior to request for consultation. Sources: Based on information supplied by the Department of Overseas Trade and the Department of Manu­

facturing Industry.

106

TABLE 2.3.5: CHARACTERISTICS OF INDUSTRIES CURRENTLY ASSISTED B Y IMPORT RESTRICTIONS(a)

Industry

Value Average added per earnings per employee employee

Effective rate of assistance 1969-70

Value of imports(c)

ASIC code Description

Employment (6)

No. $ $ Per cent $m

23 Textiles . . . . . . 53 832 6 999 3 897 41 260

242 Clothing . . . . . 74 308 4 613 2 988 100 63

243 Footwear . . . . . 18 170 5 554 3 482 53 23

3111 Fabricated structural steel(d) . . 17 675 7 271 4 630 75 35

3211 Motor vehicles(e) . . . . 51 807 8 196 5 289 54 145

3322 Refrigerators and household appliances 26 849 7 446 4 314 55 27

Manufacturing sector . . . 1 297 588 8 281 4 485 35 4,072

(a) The data in the table are for the year 1972-73, except the effective rate estimates, which relate to 1969-70. See the Commission’s 1973-74 Annual Report, Table 3.4.1. (b) Average number of persons employed during year. (c) The import figures do not necessarily correspond precisely to ASIC industry imports. (d) Imports relate only to universal beams, plates and sheets of iron or steel.

(e) Imports relate only to passenger motor vehicles. Sources: ABS, Manufacturing Establishments, 1972-73; Overseas Trade, 1973-74; and estimates made by the Commission.

107

APPENDIX 2.4: COMPLAINTS OF DUMPING^), BY INDUSTRY: 1972-73

Industry

Percentage of total

ASIC code Description

Number of complaints

01 Agriculture . . . . . . . . . . . 4 3

21-22 Food, beverages and tobacco . . . . . . . . 8 5

23 Textiles . . . . . . . . . . . 8 5

24 Clothing and footwear.................................................... . . 7 5

25 Wood, wood products and furniture . . . . . . 2 1

27 Chemical, petroleum and coal products . . . . . . 29 19

28 Non-metallic mineral p r o d u c t s ................................... . . 16 11

29 Basic metal products . . . . . . . . . 5 3

31 Fabricated metal p r o d u c ts ........................................... . . 13 9

32 Transport eq u ip m en t.................................................... . . 6 4

33 Other machinery and equipment . . . . . . . 38 26

34 Miscellaneous manufacturing . . . . . . . . 12 8

(6) Frozen food..................................................................... . . 1 1

Total..................................................................... . . 149 100

(a) Includes all complaints received by the Departm ent of Police and Customs since 1972, as well as goods subject to Tariff Board or Industries Assistance Commission reports since 1972 and goods reported on prior to 1972 but still subject to anti-dumping duties. (.b) Includes ASIC classes 4711, 4712, 4714 and 4719.

Source: Departm ent of Police and Customs.

108

APPENDIX 3: THE GAINS FROM REDUCING PROTECTION

1. A number of studies have attempted to estimate the gain to particular countries from eliminating tariff protection. These studies are not wholly satisfactory in that they utilize

restrictive assumptions which lead to under­ estimates of the gains. The estimated gains appear small when compared with large economic aggregates such as GDP, but in

absolute terms they are large—despite the under estimation—and they accrue to national income every year. They are also substantial when compared with the gains that could

accrue from other policies that a Government might implement to increase national income.

2. The benefits to Australia of lowering tariffs are likely to be larger than for most

developed countries because of the significantly higher level of protection accorded the import- competing sector in this country. Table 3.1 indicates that the average levels of tariff pro­

tection for industrial products in Australia far exceed those of other developed countries, with the exception of New Zealand.1 This is true for the ‘All industrial products’, ‘Semi­

finished manufactures’ and ‘Finished manufac­ tures’ groupings regardless of the procedure adopted to calculate average tariff levels. For

‘Raw materials’, protection on total imports is higher in some other countries.

3. Another reason why the benefits to Aus­ tralia of lowering tariffs are likely to be larger than for most developed countries is the greater diversity of Australian tariff levels.2 For

example, Table 3.2 shows that about 22 per cent of Australia’s imports enter at rates above 25 per cent—compared with a world average of about 2 per cent of imports. Also, about 43

’Since Table 3.1 was compiled, some changes would have occurred in the levels of protection accorded in some countries. For example, in Australia’s case, allowance would have to be made for the 25 per cent tariff reduction in 1973. Because of the methodology

employed and because some countries apply non-tariff barriers to trade, some caution should be exercised xvhen making international comparisons of the levels of protection. It is very unlikely, however, that these

qualifications affect the judgement that Australia is a high-tariff country.

’See Table 3.4.1 in the Commission’s 1973-74 Annual Report and Attachment 1 to the Commission’s paper for the Jackson Committee: Implications o) the Com­ mission’s approach to the development of industries.

per cent of Australia’s imports enter duty free —compared with a world average of about 38 per cent of imports. Consequently not only is there a considerable distortion in resource

allocation between the import-competing sector and the rest of the economy as a result of a high average tariff, but the diversity of levels of assistance within the import-competing sec­

tor adds a further dimension to inefficient resource allocation in the Australian economy (see also paragraph 7 below).

4. The most advanced and ambitious

empirical study of the gains to Australia from moving to free trade8 was made by Evans4 who estimated that Australia could expect, in

every year after the adjustment period, to enjoy consumption 0.8 per cent to 1.8 per cent above what the country would enjoy if the tariff structure he studied (1958-59) were to

continue. In common with overseas studies Evans employed assumptions which led him to say that ‘. . . these estimates of the wel­

fare benefits . . . are likely to be under­

estimates’.5 The major reasons for the under­ estimation are that the study does not include the effects of economies of scale, the improve­ ment in resource allocation within broadly defined industries and some of the gains * *

T h e term free trade is used here to describe a situa­ tion where, in general, tariffs have been eliminated, and the exchange rate has been devalued approp­ riately, but there may still be tariffs for special

reasons—for example, because of dumping—and there may be other forms of specific government inter­ ventions to encourage particular activities. *H. D. Evans, A General Equilibrium Analysis of Pro­

tection: The Effects of Protection in Australia, North Holland, Amsterdam, 1972. r'Ibid., p. 111. ‘There are several reasons why the esti­ mates of the welfare gains are likely to be biased

downwards. First, the absence of substitution possi­ bilities in production within industries lowers the opportunities for the re-allocation of resources . . . many industries are highly aggregated, and some of

the important resource allocations which would occur in the real economy are missed. Second, no price effects in consumption are allowed for, and the consumption coefficients are assumed to

be unchanged. . . .

Third, . . . many of the important benefits from the alternative tariff reforms would stem from changes in market structures . . . Allowance for such changes could increase the welfare gains from

tariff reform. Finally, no allowance is made for economies of scale, which could be important in some industries.’

109

experienced by consumers. The under-estima­ tions arising from these omissions are probably significant.

5. The tariff structure has hindered the Aus­ tralian community from gaining the benefits of economies of scale in a number of ways. In some instances the effect of high tariffs has led to a proliferation of domestic producers many of which are below optimum size.6 The

Commission has documented this inefficient use of resources in a number of its reports: for example, Domestic Appliances, Heating and Cooling Equipment, etc., and Passenger Motor Vehicles, etc. Also high tariffs for some indus­ tries reduce the ability of producers to exploit economies of scale by producing for the export market. This is mainly because tariffs disad­ vantage export producers not only by increas­ ing production costs in export industries but also by leading to an exchange rate which is higher than it would otherwise be.

6. In this connection, a further point is that Australia’s external trade as a proportion of GNP is smaller than for many other developed countries of a comparable size (Table 3.4).7 Not only is this ratio relatively low, but Aus­ tralia is one of the few countries in which the importance of its foreign trade sector has remained constant over the period 1960 to

1970 (despite the substantial increase in mineral exports over this period—from 8 per cent to 26 per cent of total exports).

7. The high level of industry aggregation used in Evans study means that the gains from the resource reallocations that would occur within broadly defined industries from reduc­

ing the level of protection are not measured. Evans used a 35-sector model of the Australian economy and consequently all the improvement in resource allocation within these sectors was ignored. Evidence of the possible importance of these effects can be found from the ex-

6Table 3.3 compares the size and structure of selected manufacturing industries in Australia and Canada. ’Although for Japan and the United States external trade as a proportion of GNP is also low, these

countries are already able to take advantage of economies from large scale production because of their relatively large domestic markets. In relatively small economies, such as Australia, international trade may be the only way to gain scale economies for some products.

perience with tariff reform in the European Economic Community, where it was found that a significant proportion of the restructur­ ing of international trade takes place within industries. The importance of trade within industries can be ascertained by the relatively high proportion of intra-industry trade that occurs in most countries (Table 3.5). 8. In addition to the gains to the community from the more efficient allocation of resources, consumers also gain directly from the change in prices which occurs when protection is reduced. This source of improvement of the well-being of the community is not included in Evans’ model (see footnote 5).

9. As a result of each of the above factors, the gains from moving to freer trade as esti­ mated by Evans tend to be significantly under­ estimated.8 The joint study that the Commis­ sion is undertaking with the Department of Labor and Immigration (paragraph 3.40) will provide some insights into these matters. The Commission plans to extend that work and make available in 1976-77 its estimates of the gains from moving to freer trade.

10. Finally, the potential gains to the Aus­ tralian community are likely to be substantially greater if actions by Australia to reduce trade barriers can be associated with reciprocal re­ ductions in trade barriers in other countries.9 A recent Canadian study has estimated that with multilateral free trade in industrial pro­ ducts the expected increase in Canada’s real income may be of the order of 10 per cent.10 In this context the development of many of Australia’s low cost export industries, particu­ larly in the rural sector, has been hindered by highly restrictive import protection, and in

some cases, export subsidisation by other countries.

8A recent attempt to duplicate Evans’ study, which included each of the above limitations, but utilized a slightly different data set, estimated the gains from moving to freer trade to be approximately 3 per cent of GDP. See Peter B. Dixon and Matthew W. Butlin, The Evans Model of Protection: an Interpretation and Review. Paper presented to the Fourth Econo­ mists Conference, Brisbane 1975. “The Commission currently has before it a reference

arising from the decision of the Australian Govern­ ment to participate on the basis of reciprocity in the Multilateral Trade Negotiations being conducted at present under the auspices of GATT. “ Economic Council of Canada, Looking Outward, A

New Trade Strategy for Canada, 1975, p. 105.

110

TABLE 3.1: AVERAGE TARIFFS ON TOTAL AND DUTIABLE MOST-FAVOURED­ NATION IMPORTS, BY COMMODITY GROUP, 1970(d) (Per cent)

Average tariff on all imports Average tariff on dutiable imports

1 2 3 4 1 2 3 4

A ll industrial products

A ustralia . 1 8 .5 15.5 13.1 14.5 2 6 .5 22.1 2 3 .0 2 0 .7

U S . . . 11.1 7 .3 6.8 6 .3 12.1 8.1 8 .8 7 .1

C anada . . 9 .3 6 .8 6 .6 7 .3 1 5 .2 11.5 14.1 1 1 .0

Ja p a n . . 10.1 10.1 6.3 10.1 11 .2 10.8 1 1.6 1 0 .7

E E C . . . 6 .9 6 .4 4 .5 6 .5 7 .5 6 .7 8 .1 6 .9

U K . . . 9 .2 7 .8 6 .2 7 .3 10.5 8 .5 1 0.2 8 .1

D enm ark . . 4 .5 3 .5 4 .2 3 .9 8 .3 4 .3 8 .5 4 .6

A ustria . . 1 0 .8 1 0.4 11.0 11.3 13 .5 11.4 16.3 1 2 .3

F inland . . 8 .6 5 .4 4 .6 5 .3 13.3 6 .4 9 .5 6 .4

N orw ay . . 8 .3 5 .5 4 .5 5.1 1 1.4 7 .6 11 .0 7 .2

Sweden . . 5 .8 4 .4 4 .6 4 .3 7 .7 4 .8 7.3 4 .6

Sw itzerland . 4 .3 3 .2 3 .0 3 .0 4.4 3 .5 3 .4 3 .2

N ew Z ealand . 2 5 .2 21 .1 14.6 18.0 32.3 24.1 2 3 .4 2 0 .3

World . . 9 .0 7 .3 5 .9 7 .1 10.7 8 .4 9 .8 6.1

R aw materials

A ustralia 10.1 4 .9 0 .6 1 .4 2 2 .5 8 .6 16 .6 7 .1

U S . . 5 .6 3 .9 2 .5 2 .9 9 .7 5 .9 5.1 5 .0

C an ad a . 3 .4 1 .4 0 .4 0 .3 11 .0 3 .8 6 .4 2 .8

Ja p a n . 2 .6 6 .0 3 .4 5 .8 8 .1 8 .2 1 2 .0 7 .5

E E C . . 1 .5 0 .7 0 .4 0 .6 3 .8 1 .0 4 .0 1.1

U K . . 3 .5 1 .2 0 .2 0 .5 6 .6 2 .0 5 .8 1 .7

D enm ark . 0 .1 — — — 4 .4 — 1 .7 —

A ustria . 2 .9 5 .6 1 .8 5 .3 6 .9 6 .2 11 .0 6 .1

F inland . 0 .1 — — — 5 .8 — 3 .8 —

N orw ay . 0 .6 0 .3 0 .1 0 .1 6 .4 0 .5 3 .5 0 .2

Sweden . 0 .2 0 .1 — — 4 .8 0.1 6 .3 0 .1

Switzerland 1 .5 0 .5 0 .5 0 .5 1 .9 0 .5 0 .7 0 .5

N ew Zealand 2 .3 1 .3 0 .2 0 .9 16.2 2 .6 11.1 1 .0

W orld . 2 .7 2 .9 1 .6 2 .5 6 .7 4.1 6.9 3 .8

Semi-finished manufactures

Australia . . 15.3 12.5 11.7 11.5 2 2 .7 19.2 17.3 1 7 .4

U S . . 9 .6 8 .5 5 .6 6 .9 10.4 9.1 8 .9 7 .8

C anada . 7 .5 6 .3 9 .8 7 .6 13.3 10.7 14.0 1 0 .5

Japan . 9 .6 9 .4 6 .3 8 .3 10 .4 10 .0 8.1 9 .3

E E C . . 6 .7 6 .3 4 .8 6 .5 7.1 6 .9 8.2 7 .3

U K . . 7.9 8.1 6 .9 7.7 9 .0 9 .5 10.3 9 .1

D enm ark . 3.1 2 .5 3.1 2 .3 7 .4 3.1 7 .9 3.1

A ustria . 9 .0 8 .0 5.9 7 .5 12.4 9 .4 12.9 9 .4

F inland . 5.5 3 .9 3 .2 3 .5 11.8 5 .3 10.7 5 .2

N orw ay . 6.1 4.8 4 .9 4 .7 10.6 6.2 13.4 6 .1

Sweden . 4 .9 3 .9 4 .2 3 .9 7 .5 4 .8 7 .3 4 .7

Switzerland 4.4 4 .2 2 .8 3 .9 4.4 4.2 2 .8 3 .9

New Zealand 17.3 13.3 8.8 7.7 24.1 18.1 14.6 10 .8

W orld . 7 .9 7 .2 5 .6 6 .7 9 .3 8 .2 9 .0 7 .8

111

TABLE 3.1—continued

A verage tariff o n all im ports A verage tariff o n dutiable im ports

1 2 3 4 1 2 3 4

Finished manufactures

A ustralia . . . 20.1 2 1 .5 16.3 2 1 .5 2 7 .9 29.1 2 5 .6 2 8 .0

U S . . . . . 13.2 8 .2 8 .8 7 .4 13.8 8 .6 9 .4 7 .7

C an ad a . . . . 10 .6 9 .3 6 .7 10.1 16.1 15 .2 14.3 14 .8

Ja p a n . . . . 1 1.5 12.3 12 .7 12.8 11.8 12.3 13.2 12 .9

E E C . . . . . 7 .8 8 .9 8 .2 9.1 8.1 8 .9 8 .5 9 .1

U K . . . . . 11.1 1 0.4 8 .6 10 .0 12.1 10 .7 10.3 10.4

D enm ark . . . . 5 .7 5 .6 5 .8 6 .3 8 .6 6 .7 8 .7 7 .3

A ustria . . . . 12.8 1 3 .6 1 6 .0 15.9 14.3 14 .5 17.3 1 6 .4

F inland . . . . 10.9 8 .5 6 .3 8 .5 13.8 9 .7 9 .2 9 .7

N orw ay . . . . 10.1 8.1 5.1 7 .4 11.7 1 1.4 9 .8 10 .6

Sweden . . . . 6 .8 6 .5 5 .7 6 .3 7 .8 6 .7 7 .3 6 .5

Sw itzerland . . . 4 .5 3 .9 3 .5 3 .6 4 .6 4 .3 4 .0 3 .9

N ew Z ealand . . . 31 .9 3 3 .7 2 0 .2 30 .7 3 6 .7 3 6 .6 27.1 3 3 .4

W orld . . . . 10.5 9 .2 8 .4 9 .2 12.1 10 .6 10.5 10.3

(a) Average No. 1 is a simple (unweighted) arithmetic average of all MFN duty rates applying to tariff lines classified in a commodity category. It was calculated directly from national tariff lines. Average No. 2 was calculated in two steps. First, a simple (unweighted) arithmetic average of tariff lines was calculated for each Brussels Tariff Nomenclature heading in a category. Each of these arithmetic averages was then weighted by total combined imports of the industrial countries covered by the study in calculating an average for a category. Average No. 3 is a weighted average of all duty rates classified under a category using MFN imports of the country concerned at the national tariff line level as the weighting pattern. Average No. 4 was calculated in two steps. First, a weighted average based on a country’s own MFN imports up to the BTN heading level was calculated. The results in individual BTN headings were then weighted by the total (MFN, preferential, and intra-area) combined imports of the industrial countries covered by the study in

calculating an average of each category. Source: General Agreement on Tariffs and Trade, Basic Documentation for the Tariff Study, Geneva, 1972.

TABLE 3.2: DISTRIBUTION OF IMPORTS OF INDUSTRIAL PRODUCTS UNDER THE MOST-FAVOURED-NATION TARIFF, B Y LEVEL OF TARIFF RATES: 1970

Percentage of total imports at the tariff rates shown

5 per cent 5.1 to 10.0 10.1 to 15.0 15.1 to 20.0 20.1 to 25.0 Over

Duty-free and under per cent per cent per cent per cent 25 per cent

Australia . 43.1 4.6 21.9 1.8 ' 3.6 2.8 22.1

US . . 23.0 35.9 24.1 6.3 4.4 1.4 4.9

Canada . 53.4 2.0 16.8 11.0 12.6 2.6 1.6

Japan . . 46.1 6.9 18.4 22.8 3.3 1.4 1.1

EEC(tz) . . 44.2 14.0 28.3 10.4 2.9 0.2 —

UK . . 39.6 5.1 31.9 17.5 5.5 0.3 —

Denmark . 50.9 12.2 20.7 12.9 1.5 1.9 —

Austria . . 32.4 5.7 15.9 14.3 16.5 5.6 9.6

Finland . 51.1 12.8 23.7 6.8 2.2 2.0 1.4

Norway . 58.9 11.2 12.6 11.5 3.6 1.5 0.7

Sweden . 36.5 28.4 25.6 8.9 0.4 — —

Switzerland . 10.6 67.2 17.0 3.8 0.8 0.6 —

New Zealand 37.6 9.7 11.8 6.9 14.7 1.3 18.0

World . . 38.4 18.6 23.7 11.4 4.6 1.1 2.2

(a) Percentage figures exclude intra-EEC trade. Source: General Agreement on Tariffs and Trade, Basic Documentation for the Tariff Study, Geneva, 1972

112

TABLE 3.3: S IZ E A N D STRU CTURE O F SELECTED (a) M ANU FACTU RING IN D U STR IE S— A U S T R A L IA ^ ) A N D CANAD A(c)

Average employment Average value added

Establishments Employment Value added per establishment per establishment

Largest Largest Largest Largest Largest Average

four four four four four nominal

Enterprise enterprise enterprise enterprise enterprise enterprise tariff

Industry description^) groups Total groups Total groups Total groups Total groups Total groups rate(e)

No. No. *000 *000 $A m (/) SAm(/) No. $ A m (f) $A m (/) Per cent

M otor vehicles A ustralia . . . . 35 51

Canada . . . . 18 21

Printing and publishing Australia . . . . 594 718

Canada . . . . 635 684

Printing, stationery and bookbinding

1 899 1 998 Australia . . .

Canada . . . . 2 045 2 088

Industrial machinery and equipment

1 308 1 391 Australia . . .

Canada . . . . 590 609

M eat and abattoir by-products Australia . . . . 508 606

Canada . . . . 393 432

Electrical machinery and equipment Australia . . . 683 752

Canada . . . . 123 157

M otor vehicle parts and accessories n.e.c. Australia . . . 438 499

Canada . . . . 157 179

Petroleum refining Australia . . . . 15 20

Canada . . . . 14 ‘ 41

Log sawmilling Australia . . . . 1 232 1 421

Canada . . . . 1 802 1 894

Shipbuilding and repair Australia . . . . 76 87

Canada . . . .

Pulp, paper and paperboard Australia . . . .

60 68

13 21

Canada . . . . 60 137

Beer Australia . . . . 9 26

Canada . . . . 10 47

18 49.4 44.5 388.4 360.3 969

6 39.1 35.2 1 018.4 979.2 1 862

27 31.4 12.7 208.3 83.7 44

17 34.1 9.4 388.3 123.1 50

17 37,9 3.5 182.4 17.2 19

24 38.4 5.2 371.4 57.9 18

27 31.0 4.2 177.0 23.1 22

7 47.8 8.1 547.2 91.7 79

25 37.6 9.7 164.4 41.6 62

31 30.5 15.9 310.6 163.1 71

16 35.2 5.5 163.0 20.4 47

18 22.6 12.6 241.0 145.6 144

33 22.0 7.6 116.0 45.7 44

12 39.5 16.1 504.0 243.8 220

6 4.4 3.0 95.1 66.9 220

28 9.1 7.5 303.9 243.0 222

26 17.7 1.5 90.5 8.3 12

20 48.0 7.8 526.9 105.2 25

6 17.8 11.8 85.0 57.2 204

11 15.7 9 .6 146.9 85.2 230

12 10.9 10.1 83.5 75.1 521

33 73.5 24.7 1 053.4 370.0 536

19 7.9 6.5 78.5 60.0 303

36 9.4 8.8 250.2 239.5 200

2 472 5 863

472 555

205 216

154 1 159

390 512

341 700

232 1 344

497 267

56

392

1 962 870

838 747

340 244

7.6 48.5

0.3 0 .6

0 .1 0 . 2

0.1 0.9

0.3 0.7

0 . 2 1.5

0 . 2 2 . 8

4.8 7.4

0 . 1 0.3

1 .0 2.2

4 .0 7.7

3.0 5.3

20.0 163.2

3.1 7.2

1 .0 2 .4

0.9 13.1

1.7 5.3

1.3 8.1

1.4 20.3

11.2 8.7

0.3 5.3

9.5 7.7

6.3 11. 2

3.2 6.7

38

3(g)

7

7(h)

37

7(h)

29 5

1

31

13(0

35 2

6 0

4S(k) 9(1)

12 3

0

n.a.

n.a. Not available (.i) Twelve largest industries in Australia, ranked in terms o f value added, for which comparable data were available for Canada. (h) 1968-69 (t) 1968

(f/> Industry descriptions from Australian Standard Industrial Classification (ASIC), The ASIC codes, together with industry descriptions and standard industrial codes o f corresponding C anadian industries, are: _

Canadian

ASIC Industrial

Code Canadian industry description code

TA BLE 3.3 — c o n tin u e d

(e) ( / )

(g ) (A) (0 ( / )

( * ) (0

3211 M otor vehicle manufacturers

2621 Printing and publishing

2622 Commercial printing

3 3 3 9 Miscellaneous machinery and equipment manufacturers

2111 Slaughtering and meat processors

3326 M anufacturers o f electrical industrial equpiment

3214 M otor vehicle parts and accessories

2730 Petroleum refining

2511 Sawmills and planing mills

3221 Shipbuilding and repair

2611 Pulp and paper mills '

2192 Breweries

3230 2890 2860 3150

1010 3360 3250 3651 2513 3270 2710

1450

Australia (1969-70) and Canada (1970). N ote that no allowance is made for non-tariff forms o f assistance, such as quantitative restrictions or local content schemes. Canadian value added converted from C anadian dollars at 1968 exchange ra te : $A1 = Can $1.0347. Includes Truck Body and Trailer M anufacturing industry. Printing, Publishing and Engraving industries.

Electrical Industrial Equipment M anufacturing industries. Petroleum and Coal Products industries. Includes assistance provided by the shipbuilding subsidy. Manufacturers o f transportation equipment other than M otor Vehicles and Trailer M anufacturers.

Sources: A ustralia: KBS, Integrated Economic Censuses; 1968-69 Industry Concentration Statistics Industries Assistance Commission Annaul Report, 1973-74 C anada: Statistics Canada, Industrial Organisation and Concentration in the Manufacturing, Mining and Logging Industries, 1968. Economic Council o f C anada. Looking Outward: A New Trade Strategy fo r Canada, 1975.

TABLE 3.4: EXTERNAL TRADE A S A PROPORTION OF GNP: OECD COUNTRIES, I960 AND 1970 A T 1963 PRICES (Per cent)

Australia .

Austria . .

Belgium . .

Canada . .

Denmark . .

Finland . .

France . .

Germany, F R . Greece . .

Iceland . .

Ireland . .

Italy . .

Japan . .

Netherlands .

Norway . .

Portugal . .

Spain . .

Sweden . .

Switzerland .

Turkey(c) . .

United Kingdom United States . Yugoslavia (c) .

Exports Imports

1960 1970 Change 1960 1970 Change

15.7 16.0 + 0.3 16.7 16.0 - 0.7

23.0 32.8 + 9.8 23.0 32.4 + 9.4

33.8 51.4 + 17.6 35.7 50.7 + 15.0

18.1 25.9 + 7.8 20.0 24.2 + 4.2

29.1 36.3 + 7.2 29.5 40.7 + 11.2

21.8 (o)25.7 + 3.9 22.6 (o)24.8 + 2.2

13.9 19.7 + 5.8 12.1 19.2 + 7.1

19.1 27.0 + 7.9 15.9 25.6 + 9.7

11.2 14.9 + 3.7 21.7 24.7 + 3.0

40.8 52.3 + 12.5 41.9 56.5 + 14.6

34.1 (6)43.6 + 9.5 36.0 (6)53.0 + 17.0

13.2 24.0 + 10.8 12.9 23.0 + 10.1

9.7 14.1 + 4.4 9.6 13.3 + 3.7

47.9 68.1 +20.2 44.2 70.1 +25.9

37.4 48.9 + 11.5 40.2 53.5 + 13.3

18.1 22.2 + 4.1 22.8 27.6 + 4.8

11.0 17.0 + 5.0 7.6 18.3 + 10.7

21.2 28.7 + 7.5 22.0 29.0 + 7.0

30.6 (6)40.5 + 9.9 27.6 (6)38.2 + 10.6

id) 6.9 7.5 + 0.6 id) 10.8 8.9 - 1.9

19.2 23.6 + 4.4 20.4 23.2 + 2.8

5.2 6.8 + 1.6 4.3 6.3 + 2.0

13.6 19.0 + 5.4 17.4 21.1 + 3.7

(а) 1968. (б) 1969. (c) At current prices. id) 1962. Sources: Compiled by Industries Assistance Commission staff from OECD, National Accounts o f OECD Countries,

1960-1970, and ABS, Australian National Accounts, various issues.

TABLE 3 .5 : IN T R A -IN D U ST R Y TRADE(a) I N SE LE C TE D C O U N TRIES: 1959-1967 (Per cent)

Percentage of total trade Percentage change

1959 1964 1967 1959-1964 1959-1967

Canada . . . . . . 28

United S t a t e s ......................................... 40

J a p a n ................................................... 17

Belgium-Luxemburg . . . . 53

N e t h e r l a n d s ......................................... 55

Germany, F R ......................................... 3 9

F r a n c e ................................................... 4 5

I t a l y ............................................................. 35

United Kingdom . . . . 32

A ustralia................................................... 14

35 , 48 25.0 71.4

40 49 — 22.5

21 21 23.5 23.5

60 63 13.0 18.9

58 56 5.5 1.9

42 46 7.9 17.9

60 65 1 1 .1 44.4

44 42 25.7 2 0 . 0

40 69 25.0 115.6

17 17 21.4 21.4

M e a n ......................................... 36 42 48 16.7 33.3

id) F o r comparisons among countries, as in the table above, intra-industry trade is measured as twice the value of exports from an industry or twice the value of im ports from an equivalent overseas industry, whichever is the smaller, expressed as a proportion o f a country’s total commodity exports plus import trade and any trade imbalance.

Source: Herbert G. Grubel and P. J. Lloyd, Intra-Industry Trade (Macmillan, London, 1975), p. 42.

115

TABLE 3.6: GROSS DOMESTIC PRODUCT PER HEAD IN OECD COUNTRIES, I960 AND 1973 AT 1970 PRICES

GDP per head

Average Investment annual as a

Rankings rate of proportion

---------- --------- -------- growth of GDP

1960 1973 1960 ' 1973 1960-1973 1960-1972

U nited States .

LSS 3 701

US$ 5 493 1 1

Per cent 3.0 Per cent 17.3

Sweden . . 2 717 4 314 2 3 3.6 22.6

Canada . . 2 612 4 496 3 2 4,2 22.5

Switzerland . 2 487 3 542 4 4 2.8 28.1

Luxemburg . 2 355 3 429 5 6 2.9 26.2

Denmark . . 2 127 3 533 6 5 4 .0 20.9

Germany, F R . 2 121 3 391 7 7 3.7 25.8

A ustralia . 2 089 3 029 8 11 2 .9 26.1

Norway . . 1 910 3 229 9 9 4.1 28.8

France . . 1 811 3 287 10 8 4 .7 23.8

United Kingdom 1 805 2 405 11 15 2 .2 17.6

Iceland . . 1 787 2 877 12 12 3.7 28.5

Belgium . . 1 746 3 035 13 10 4.3 20.9

Netherlands . 1 644 2 668 14 13 3.8 25.3

Finland . . 1 416 2 590 15 14 4 .7 26.6

Austria . . 1 284 2 271 16 17 4.5 28.9

Italy . . .· . 1 076 1 882 17 18 4.4 20.3

Ireland . . 958 1 485 18 19 3.5 19.6

Japan . . 740 2 328 19 16 9.2 32.4

Greece . . 548 1 381 20 20 7.4 25.3

Spain . . 527 1 143 21 21 6.1 20.9

Portugal . . 385 898 22 22 6.8 18.0

Turkey . . 267 408 23 23 3.3 15.4

OECD . . 1 628 3 309 — — 5.6 23.6

Source: Compiled by IAC staff from data published in OECD, Main Economic Indicators, May 1975 and earlier issues; and National Accounts of OECD Countries, 1960-1970 and 1961-1972.

116

APPENDIX 4.1: THE ADVISORY PROCESS FOR ASSISTANCE TO INDUSTRIES

1. The main groups involved in the formula­ tion of advice to the Government on assistance to industries are shown in Figure 4.1.1. It can be seen that an inquiry into assistance

to a particular industry may be initiated by the Special Minister of State or the Minister for Police and Customs. Also the Commission may initiate its own inquiries into industries where assistance has not been reviewed for

at least six years, or at least ten years if

assistance has been provided by means other than duties on imports.

2. If a particular interest group or Depart­ ment seeks a reference to the Commission, the Department of the Special Minister of State and the relevant ‘industry’ department

consider whether such an inquiry is justified. In the case of dumping, Customs by-laws, tariff classification and value for duty matters,

the Minister for Police and Customs may initiate an inquiry. If it is decided that an inquiry is warranted, then a ‘reference’ is forwarded by the Minister to the Commission

and the inquiry process begins.

3. The detailed procedures adopted by the Commission for its inquiries into individual industries are broadly similar. As soon as the Commission is requested by the Government

to conduct an inquiry a circular containing the reference is distributed by the Commission to industry organisations, employer and employee organisations, individual domestic producers, importers and users, and to over­ seas manufacturers and suppliers exporting to Australia. Later circulars, to those express­ ing an interest in an inquiry, give details of proposed requests which have been advised to the Commission, and other information relevant to an inquiry. It should be noted that individuals may make submissions. The Commission usually distributes a questionnaire to those parties wishing to make submissions

to the inquiry, and for some inquiries also distributes, at about the same time as its questionnaire, a handbook containing basic statistics about the industry.

4. After the Commission has received sub­ missions from those wishing to take part in its inquiry it schedules public hearings. The dates and places of these hearings are notified

in circulars distributed to parties known to be

interested in the inquiry. In addition these details are advertised widely in the press. The hearings are usually held in the cities or major

producing regions where most of those expec­ ted to participate in the inquiry are located. For some inquiries there may be two sets of hearings, separated by a month or two. In

any event, the Commission seeks to have all important issues dealt with in evidence at the first set of hearings. The second set of hear­ ings then serves to provide opportunities for further comment on submissions made at the

first set of hearings, or for additional informa­ tion to be submitted about important issues brought up during the first set of hearings.

5. The sequence in which inquiry partici­ pants present their submissions at the hearings is determined by the Commissioner or Associ­ ate Commissioner responsible for that inquiry. Usually the representatives, if any, of industry organisations are heard first, followed by the representatives of domestic producers and importers, and finally the consumers or users of the industry’s products. Each witness is required to present his submission on oath or affirmation and is asked to read the main parts of the submission, excluding any sections accepted by the Commission as confidential. He may be questioned by the Commission during the hearing. Transcripts of hearings are

available shortly after the end of the

hearing(s). Complete transcripts or sections thereof may be purchased from the Australian Reporting Service of the Attorney-General’s Department. Transcripts are also available for

perusal in the Customs House in each State and at the Commission’s offices in Canberra, Sydney and Melbourne.1 6. After the initial set of hearings, the Com­ mission may make available to interested

parties a draft of its report, to give these

parties an opportunity to examine and com­ ment within the public inquiry system (see paragraphs 4.6 and 4.7). Supplementary public hearings are then held to receive submissions on the draft.

7. The conclusion of the Commission’s public hearings usually marks the end of sub­ stantial involvement in an inquiry for most

'Special arrangements may sometimes be made for particular inquiries.

117

participants. However, provision is usually made for the submission (and circulation to other witnesses) of supplementary evidence, usually on points of detail outstanding from the public hearings. The post-hearing stage of

an inquiry principally involves the Commission and its staff, which must analyse all the in­ formation that has been collected.

8. After the Commission has signed its report, it is sent to the Special Minister of State (or in some cases the Minister of Police and Customs). The Commission’s report is nor­

mally published soon after its receipt by the Special Minister of State, and before a

decision is made by the Government. This decision to publish is made by the Minister and not the Commission. The report is

considered by the Standing Inter-departmental

Committee on Assistance to Industries, which consists of representatives from the Depart­ ments of the Special Minister of State,

Treasury, the relevant industry department and any other department that may have an interest in the Commission’s recommenda­ tions. This committee makes its recommenda­ tions to the Special Minister of State, who normally refers the matter for decision to Cabinet. The Government’s proposals on tariff

assistance to particular industries must be introduced into Parliament which has the final responsibility for altering the Tariff. With respect to other forms of assistance, for

example, quantitative restrictions and local content schemes, an executive decision may be sufficient to alter the assistance accorded particular industries.

118

FIGURE 4.1: THE ADVISORY PROCESS FOR ASSISTANCE TO INDUSTRIES

Initiation of an IAC inquiry IAC inquiry Consideration of IAC recommendations

Public hearings draft reports

recommend ations reference

Minister & department of Special

Minister of State

Special Minister of State; Minister for Police and Customs

Interested parties1 1

Minister for Police and Customs d

Parliament

Ministers of Government departments

Cabinet

Inter­ departmental committee

Government

Industries Assistance Commission

Interested parties

Parliamentary committee

(a) For example, domestic producers or consumers. (b) For example, the Ministers for Manufacturing Industry or Agriculture. Some references are initiated without representation by producers, etc. (<■) The Government initiates some inquiries into industry assistance, sometimes in accordance with recommendations made in earlier reports of the Tariff Board or the Commission.

(d) The Minister for Police and Customs can initiate inquiries into by-law, tariff classification, dumping, and value for duty matters. (e) Draft reports are produced for some inquiries only.

APPENDIX 4.2: THE OPERATIONS OF THE TARIFF BOARD AND INDUSTRIES ASSISTANCE COMMISSION

TABLE 4.2.1: REFERENCES RECEIVED AND REPORTED ON B Y THE TARIFF BOARD AND INDUSTRIES ASSISTANCE COMMISSIONS), B Y T Y P E OF REFERENCE: 1967-68 TO 1974-75

Tariff revision DSA(6) NZAFTA GATT(rf) By-law Other Total

References received(c)— 1967-68 . . . . 37(1) 5 2 1 2 47(1)

1968-69 . . . . 24 3 1 — — 2 8

1969-70 . . . . 18(1) 16 4 — — 38(1)

1970-71 . . . . 27(3) 7(2) — — — 34(5)

1971-72 . . . . 14(2) 9(2) 1 4 2 30(4)

1972-73 . . . . 21(1) 8 — 6 — 35(1)

1973-74— Tariff Board (1.7.73 to 31.12.73) . . . 13(2) 1 — 4(1) — 18(3)

IAC (1.1.74 to 30.6.74) . 6(1) — 1 — r9(2) 16(3)

1974-75 . . . . 13 — 6(1) 7(2) 10 36(3)

References reported on— 1967-68 . . . . « 2 7 7 1 — — « 3 5

1968-69 . . . . 27 4 1 2 2 36

1969-70 . . . . (/)23 6 4 — — (/)33

1970-71 . . . . 20 4 1 — — 25

1971-72 . . . . (/)18 16 1 — — (/)35

1972-73 . . . . (y)!7 5 1 7 — fe)30

1973-74— Tariff Board (1.7.73 to 31.12.74) . . . 6 8 — 2 4 20

IAC (1.1.74 to 30.6.74) . 14 3 2 3 — 22

1974-75 . . . . (A ) 12 2 7 7 5 33

(a) The Tariff Board was abolished on 31 December 1973 and the Industries Assistance Commission was established on 1 January 1974. (b) New anti-dumping legislation operated from 20.6.75. (c) The figures in brackets show additional references received but subsequently withdrawn or superseded.

{d) One reference to the Textiles Authority was received in 1973-74. The Textiles Authority reported on 7 references in 1974-75. (The Textile Apparel reference was reported on in two sections). These references are included under the NZAFTA/GATT category for those years. (e) An interim report was also signed on one reference.

(/) Interim reports were also signed on two references lg) Includes a supplementary report on Lawn Sprinklers, Electric Furnaces, etc., which was combined with another report signed in 1972-73. Interim reports were also signed on two references. (h) Excludes one reference reported on in part only (Diesel Marine Engines exceeding 1500 kW).

r Revised.

120

TABLE 4.2.2: STAGE OF COMPLETION OF INQUIRIES A N D ACTION TAKEN ON REFERENCES A T 30 JUNE 1975a

Date of reference Terms of reference Stage of inquiry at 30 June 19756

27.10.69 ALUMINIUM POWDERS AND PASTE (DUMPING AND SUBSIDIES ACT)— (a) whether aluminium powders and pastes falling within item 76.05 or sub-paragraph 32.09.331 of the First Schedule to the Customs Tariff 1966-1969, have been or are being sold to a person in

Australia at an export price which is less than the normal value in the country of exportation; (b) whether, if the answer to (a) is in the affirmative, the exportation of those goods is causing or is threatening injury to an Australian

industry;

(c) if the answers to questions (a) and (b) are in the affirmative from what date should dumping duties be levied. 8. 1.70 ALUMINIUM PASTES, POWDERS OR FLAKES— (a) whether assistance should be accorded the production in Australia

of— aluminium pastes, powders or flakes falling within sub-paragraph 23.09.331, paragraph 38.19.92 or item 76.05 in the First Schedule to the Customs Tariff 1966-1969; and, if so found, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1969 in respect of the goods concerned. 6.10.70 GLASS AND GLASSWARE—

(a) whether assistance should be accorded the production in Australia of— glass and glassware covered by Chapter 70 of the First Schedule to the Customs Tariff 1966-1970 other than goods falling within

the following areas: 70.08.100 70.09.190 .

70.14.410 and. if so found, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance

through the Customs Tariff, then what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1970 in respect of the goods concerned.

DRAFT REPORT RELEASED. PUBLIC HEARING COMPLETED BUT NOT REPORTED ON This reference will be reported on in association with the references of 8.1.70 on Aluminium Pastes, Powders or Flakes and 4.5.71 on Aluminium and Articles thereof.

DRAFT REPORT RELEASED. PUBLIC HEARING COMPLETED BUT NOT REPORTED ON This reference will be reported on in association with the references of 27.10.69 on Aluminium Powders and Pastes (Dumping and Subsidies Act) and 4.5.71 on Aluminium and Articles thereof.

REPORT SIGNED 23.5.74 The Commission recommended that, with the exception of those of New Zealand origin, the goods under reference be made dutiable at the rates set out in the table below. It also recommended that those of

New Zealand origin be admitted free of duty. The recommendations were made on the assumption that primage duties would not apply. Attention was invited to the Commission’s comments on:

. by-law admission of certain of the goods under reference; . tariff preferences for developing countries; . exports to Australia at prices below the current domestic values in the countries of origin;

. the duties appropriate for certain goods of Canadian origin; . the desirability of reviewing the duties on goods (other than glass wool and glass wool products) falling within item 70.20; . the duties on glass mosaics, tyre cord and tyre cord fabric, and

reflectors and refractors for motor vehicles; and . the definition of lead crystal for duly purposes. Attention was also invited to the Commission’s report on Fibreglass Insect Screening (DSA) and its intention of reporting separately regarding

the dumping of glass fibre rovings and chopped strand mat.

(«) Includes inquiries for which the recommendations have not been included in previous annual reports. (/>) For some inquiries shown as having reached the stage of 'Public hearing completed but not reported on’, the Commission may nevertheless decide to release a draft report and hold a further public hearing.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

6.10.70 glass and glassware—continued.

Recommended rates of duty

Item Goods Rates of Duty

70.01 W aste glass (cu llet); glass in the mass

(other than optical glass) . . . . M inimum

70.02 Glass of the variety know n as enamel

glass, in the mass, rods and tubes . . M inimum

70.03 Glass in balls, rods and tubes, unworked (not being optical glass); - O f fused quartz or fused silica . . M inimum

- Other: -----Balls (including pellets) . . M inimum

-----Rods and tubes . . . . 15%

70.04 U nworked cast or rolled glass (including flashed or wired glass), whether figured o r not, in rectangular shapes . . 15%

70.05 Unworked draw n o r blown glass

(including flashed glass, in rectangular shapes) . . . . . . . . 15%

70.06 Cast, rolled, drawn or blown glass

(including flashed or wired glass) in rectangular shapes, surface ground or polished, but not further worked .. 15%

70.07 Cast, rolled, drawn or blown glass

(including flashed or wired glass) cut to shape other than a rectangular shape or bent, edge worked, engraved or

otherwise worked, whether or not

surface ground or polished, and

glassware made of such glass and not framed or fitted with other materials; multiple-walled insulating glass; leaded lights and the like .. .. 15%

consisting o f toughened or whether shaped or not: shapes m otor

ready vehicles for N o recommendation

. . 15%

(including or not

rear-view fram ed or

mirrors of a kind used

kind falling within N o recommendation

area

area

exceeding 500 . . 1 5 %

not exceeding . . Minimum

jars, pots, tubular

similar containers, of kind commonly used for the packing of goods;

closures, of glass:

. . 25%

. . Minimum

(including bulbs and lamps, electronic

tubes as used in

.. Minimum

. . 15%

vacuum vessels flasks or for

. . Minimum

within 70.19 of a

for table, kitchen, purposes, for indoor for similar uses:

H eat resisting glassware: commonly used for purposes . . .. To and including

30 June 1975— 45% From 1 July 1975— 30%

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

6.10.70 glass and glassware—continued

Recommended rates of duty

Item Goods Rates of Duty

- Other .. .. .. 30%

- Statuary figures; figures of a kind

, ordinarily used as ornaments in the household .. . . .. Minimum

- Syphon vases with or without heads Minimum - Other: ---- Containing 24% or more by weight of combined lead evaluated as lead

monoxide (PbO) . . .. Minimum

---- Other .. .. .. 30 cents per doz.

articles and 10% of the value

70.14 Illuminating glassware, signalling glass­ ware and optical elements of glass, not optically worked or of optical glass: - Illuminating glassware (including

bowls and shades but not including candle sticks) not containing 24% or more by weight of combined lead evaluated as lead monoxide (PbO) 35% - Silvered glass reflectors of the type

used in traffic control signal lights, and blanks therefor .. .. 35%

- Reflectors and refractors for lighting purposes for vehicles of a kind fall­ ing within 87.01.1, 87.02.1, 87.03.9 or 87.14.11: ---- For use as original components .. No recommendation - Other .. .. .. Rates applicable to

original components

- Other .. .. .. .. Minimum

70.15 Clock and watch glasses and similar

glasses (including glass of a kind used for sunglasses but not glass suitable for corrective lenses), curved, bent, hollowed and the like; glass spheres

and segments of spheres of a kind used for the m anufacture of clock and

watch glasses and the like . . . .

70.16 Bricks, tiles, slabs, paving blocks, squares and other goods made of pressed or

moulded glass, of a kind commonly used in building; multi-cellular glass in

blocks, slabs, plates, panels and similar forms . . . . . · ..

70.17 Laboratory, hygienic and pharm aceutical glassware, whether or not graduated or calibrated; glass ampoules . . ..

70.18 Optical glass and elements of optical glass, other than optically worked elements; blanks for corrective spectacle lenses ..

70.19 Glass beads, im itation pearls, imitation precious and semi-precious stones, frag­ m ents and chippings, and similar fancy or decorative glass smallwares, and

glassware made therefrom; glass cubes and small glass plates, whether or not on a backing, fq r mosaics and similar decorative purposes; artificial eyes of glass (including those for toys but not those fo r wear by hum ans); ornam ents

and other fancy articles o f lamp worked glass; glass grains (Ballotini): - Glass grains (Ballotim)' . . ..

- Glass cubes and small glass plates, whether or no t on a backing, for

mosaics and similar decorative

purposes . . . . . .

- Other .. .. .. ..

70.20 Glass .fibre (including wool) yarns, fabrics, and goods made therefrom: - Tyre cord and tyre cord fabric ..

- Glass wool and products made there­ from .. .. .. ..

- Rovings and woven rovings ..

25%

Minimum

25%

Minimum

15%

To be covered by the Commission’s report on Floor and Wall Tiles

Minimum

To be covered by the Commission’s report on Tyre Cord and Tyre Cord Fabrics

15% 40%

TABLE 4.2.2—continued

L a te o f Stage o f inquiry at 30 June 1975

reference Terms o f reference

6.10.70 glass and glassware—continued R ecom m ended rates o f duty

Item Goods R ates o f D uty

-O ther: -----Goods as follows:

Sliver; Chopped strand, chopped strand m at (including surface tissue), continuous filament m at;

Y am s; Cords, cordage, braids and sleev­ ing; Insect screening;

W oven fabrics o f a kind ordin­ arily used fo r industrial purposes; D iscs used fo r abrasive wheel

reinforcem ent — O ther . . . . .

30%

20%

70.21 Other glassware . . . . . . M inimum

By letter (c) dated 26.11.74 th e Commission made the following supple­ mentary recommendations:

70.04 70.05.1 7 0 .05.9 70.07.99

The Commission recommended that Developing Country preferences not apply to im ports of flat glass from the Philippines and the Republic of Korea.

27.5% 17.5% 27.5% 25%

(c) Text of letter appears at end of table.

(a) whether assistance should be accorded the production in Australia of—

(i) photographic and cinematographic apparatus and equip­ ment, and parts and accessories therefor, falling within items 90.07 to 90.10 inclusive of the First Schedule to the

Customs Tariff 1966-1970, but not including— photographic cameras of sub-item 90.07.1, other than cameras of a type used within the graphic arts industries fo r the production of line, continuous tone and half-tone images from reflection o r transparent copy; goods o f sub­ items 9 0 .0 8 .1 , 9 0 .09.1 and 9 0.10.2; and (ii) arc lamps, photographic flashlight bulbs, and tripods for

surveying instruments falling within sub-items 85.20.3, 8 5 .20.4 and 9 0 .1 4 .3 of the First Schedule to the Customs Tariff 1966-1970— and, if so found, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, then what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1970 in respect of the goods concerned.

PHOTOGRAPHIC AND CINEMATOGRAPHIC APPARATUS, ETC.—

The Tariff Board recommended th at the goods covered by sections A to J inclusive be m ade dutiable at -the rates shown in the table below.

The recommendations were based on the assumption th at primage duties would not apply.

Attention was drawn to the Board’s suggestions regarding by-laws and duty free entry of goods o f New Zealand origin.

Recom m ended rates o f duty

R ates o f duty

Item Goods General Preferential

REPORT SIGNED 4.5.72

85.20 Electric filament lamps and electric dis­ charge lam ps (including infra-red and ultra-violet lam ps); arc lamps; electric­ ally ignited photographic flash bulbs: - A rc lamps; photographic flash bulbs M inimum rates

90.07 Photographic cameras; photographic flash­ light apparatus: - Photographic cameras of a type used within the graphic arts industries for

the production of line, continuous tone and half-tone images from reflec­ tion o r transparent copy . . . . 20% 20%

TABLE 4.2.2—continued

Stage of inquiry at 30 June 1975

R ecom m ended rates o f duty

R ates o f duty

General Preferential

Tripods weighing less than 2.25 kg and tripod heads other than the

fluid or hydraulic type, combined or not . . . . . . M inimum rates

20% 10%

M inimum rates

90.08 Cinematographic cameras, projectors, sound recorders and sound reproducers; any combination of these articles: Cinematographic cameras and sound

recorders, combined or not ..

- Projectors; sound reproducers for projectors; projectors combined with sound reproducers . . ..

- Tripods: - weighing less than 2.25 kg and

tripod heads other than the fluid or hydraulic type, combined or not - Other .. .. ..

- Other .. . . .. ..

90.09 Image projectors (other than cinemato­ graphic projectors); photographic, but not cinematographic, enlargers and reducers:

- Image projectors designed for the projection of slide or film strip trans­ parencies, other than microfilm readers . . .. .. ..

- Enlargers and reducers: ---- of a kind designed for adaption for use as a camera .. ..

- Overhead projectors .. ..

N ot under reference

N ot under reference

M inim um rates 20% 10%

M inimum rates

N ot under reference

20% 20%

20% 10%

2 0 %

follows: contact printers;

photographic film and

silver recovery units; glazing machines of type (ferrotypers); print washing

dry mounting presses

(Highest level consistent with international

commit­ ments)

M inimum rates

Apparatus and equipment of a kind used " photographic or cinematographic not falling within any other chapter; photo-copying

(contact type); spools or screens for projectors: apparatus ..

not usable with film width exceeding 9.5 mm .. projectors .. ..

reels, for film: to material, for example: artificial plastic .. ..

aluminium .. ..

film and/or sensitized

Not under reference

20% 30%

40% 35%

30%

10% 20%

30% 25%

20%

20% 10%

Minimum rates

(including photogrammetrical ying); hydrographic, navigational, meteorological, hydrological and geo­ physical instruments; compasses; range­

surveying instruments .. 20% 10%

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

draft report released, public hearing completed but not reported on

This reference will be reported on in association with the references of 27.10.69 on Aluminium Powders and Pastes (Dumping and Subsidies Act) and 8.1.70 on Aluminium Pastes, Powders or Flakes.

20. 5.71 wood-working and metal-working machinery, etc.—

(a) whether assistance should be accorded the production in Australia of— wood-working and metal-working machinery and equipment and other goods, including parts therefor, falling within the

following items or parts of items of the First Schedule to the Customs Tariff 1966-1971— 84.45.4 other than 84.45.432 84.45.5 other than 84.45.52

84.50 85.05

and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff

1966-1971 in respect of the goods concerned.

REPORT SIGNED 28.6.74

The Commission recommended that the goods under reference be dutiable as follows:

Goods Rate of duty

(a) Gas-operated welding, brazing, cutting and surface tempering appliances, item 84.50; and Industrial and laboratory electric furnaces

and ovens, item 85.11 .. . . .. 15%

(b) Machine-tools for working metal or metal carbides, items 84.45.4 and 84.45.5; Tools for working in the hand with self- contained electric motor, item 85.05;

Induction and dielectric heating equipment (other than furnaces and ovens) item 85.11; and Electric welding, brazing and soldering

machines and apparatus and similar electric machines and apparatus for cutting, item 85.11 .................................. , , 25%

The above recommendations were made on the assumption that primage duties would not apply.

The Commission invited attention to the dissenting views of Mr G. P. Hampel, expressed in the body of the report.

PAPER MAKING AND PRINTING MACHINERY, ETC.—

Attention was also drawn to the Commission’s comments regarding by-laws, imports of New Zealand origin and tariff preference to Singapore in respect of item 85.05.

REPORT SIGNED 23.7.74

(a) whether assistance should be accorded the production in Australia of— paper making and printing machinery; duplicating machines; photocopying apparatus—and other goods, including parts

therefor, falling within the following items or parts of items of the First Schedule to the Customs Tariff 1966-1971: 84.31 other than 84.31.4, 84.32, 84.33, 84.34, 84.35, 84.54.3, 84.55.43, 90.10.2

and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff

1966-1971 in respect of the goods concerned.

(At the time the report was signed goods previously falling in 84.31.4 and excluded from the scope of the Minister’s reference fell to 84.31.1, specifically paragraphs (b)—corrugating machinery, etc. and (d)—facing machinery, etc.

Other tariff items mentioned in the Minister’s reference that were altered are:— 84.54.3, now 85.54.2 84.55.43, now 84.55.1)

The Commission reported on this reference in association with the reference on Textile and Apparel Machinery, Etc., dated 20.5.71.

The Commission’s recommendations were made on the assumption that primage duty would not apply.

Attention was drawn to the Commission’s suggestions concerning: (1) import of goods under reference from New Zealand and developing countries; and (2) by-law admission of the goods under reference.

The Commission recommended that goods under reference be dutiable as follows:

Goods Rates of duty

Machinery for making or finishing cellulosic pulp, paper or paper board (84.31): - coating and finishing machinery - cylinder moulds - glazing and hot rolling machinery - ruling machines, except rotary disc ruling

machines - screens, plate eccentric, for screening pulp - other .. .. .. . . ··

„ Minimum rate

15%

. Bookbinding machinery, etc. (84.32) Minimum rate

Paper or paperboard cutting machines; other machines etc. (84.33): - cutting machines for cutting out sheets "j

(sheeters) >15%

- s lit t e r s , s lit t e r - r e w in d e r s , r e w i n d e r s J

- other .. .. .. .. . . Minimum rate

Machinery, apparatus and accessories for ‘type­ founding’ or ‘typesetting’, etc. (84.34): - metal plates prepared for photo-engraving of zinc or magnesium .. .. .. 25%

of other materials .. .. .. Minimum rate

- printing type (84.34.4) .. .. . . 15%

- visual display keyboards and editing/correcting terminals .. .. .. .. 25%

- other Minimum rate

TABLE 4.2.2—continued

Minimum rate

Machinery for the manufacture or finishing of

Machines for washing, cleaning, drying, bleach­ ing, dyeing, dressing, finishing or coating textile yams, fabrics, or made up textile articles, includ­ ing laundry and dry cleaning machinery (84.40):

15% Minimum rate

Minimum rate

t-15%

TEXTILE AND APPAREL MACHINERY, ETC.

(a) whether assistance should be accorded the production in Australia of— textile and apparel machinery including felt making, linoleum making and textile cleaning, finishing and printing machinery

and other goods, including parts therefor, falling within the following items or part of items of the First Schedule to the Customs Tariff 1966-1971: 84.36, 84.37, 84.39, 84.40 other than 84.40.1 and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1971 in respect of the goods concerned. (At the time the report was signed goods previously falling in 84.40.1

and excluded from the scope of the Minister’s reference fell to 84.40.7).

- ovens and dryers, whether or not incorp­ orating stenters - dyeing machines - carpet shampoo machines - laundry and dry cleaning machines and

appliances as follows: . washing or cleaning machinery . ironing machines . squeeze type extractors

. drying tumblers . mechanically operated pressing machines . garment formers including garment finishers of the cabinet type . flatwork folding machines . spotting and steaming tables - other .. .. . . .. .

. Duplicating machines (84.54.2) .. ..

. Parts and accessories for duplicating machines (84.55.1) .. .. . . .. Minimum rate

. Photo-copying apparatus (90.10.2) .. . . Minimum rate

REPORT SIGNED 23.7.74

The Commission reported on this reference in association with the refer­ ence on Paper Making and Printing Machinery, etc., dated 20.5.71. (See above)

Minimum rate Minimum rate

ARTIFICIAL RESIN MOULDING COMPOUNDS OF THE THERMOPLASTIC TYPE (DUMPING AND SUBSIDIES ACT) — (a) whether artificial resin moulding compounds of the thermoplastic type, viz.—

(i) compounds containing lubricants, including polytetra- fluorethylene, molybdenum disulphide, graphite and the like; (ii) compounds reinforced with glass, carbon, asbestos and like fibres; and

REPORT SIGNED 2.8.74 The Commission found that— (a) goods under reference have been and are being sold to persons in Australia at export prices less than normal values in the countries

of exportation;

(b) the export of those goods has caused but is not at present causing or threatening injury to an Australian industry; and

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

2. 6.71 ARTIFICIAL RESIN MOULDING COMPOUNDS OF THE THERMOPLASTIC TYPE ( dumping and subsidies act) — continued (iii) polypropylene resin filled with talc; have been or are being sold to a person in Australia at an export

price which is less than the normal value in the country of

exportation; (b) if the answer to question (a) is, in respect of any or all goods, in that clause, in the affirmative, whether their exportation is causing or is threatening injury to an Australian industry, producing or

manufacturing like or directly competitive goods; (c) if the answers to questions (a) and (b) are in the affirmative, from what date should dumping duties be levied.

(c) dumping duties should be applied to PTFE compounds under reference exported on and after 18 June 1973 and to other goods under reference exported on and after 14 June 1971, Attention was invited to the Commission’s suggestions that dumping duties

be not levied on imports after 31 December 1973 but that the situation be kept under review.

14. 9.71 woven man-made fibre fabrics— (a) whether assistance should be accorded the production in Australia— (i) of woven fabrics of or containing not less than 20% by weight of man-made fibres being goods of a kind falling

within the following items of the Customs Tariff 1966-1971: 50.09.9, 50.10.9, 51.04.4, 51.04.5, 51.04.9, 55.09.4, or 56.07.9, and (ii) fabrics falling within items 59.08.3 or 59.08.9 of the

Customs Tariff 1966-1971 in which the textile fabric that gives the goods their essential character is a fabric that, if imported in an uncoated non-impregnated condition would fall within an item specified in sub-paragraph (i) above; and, if so found, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1971 in respect of the goods concerned.

REPORT signed 17.1.74 The Commission recommended that the goods under reference be dutiable as follows: Rate of Duty

(1) Fabric of silk, waste silk or noil silk con­ taining not less than 20 per cent by weight of man-made fibres, falling within 50.09.3, 50.09.9, 50.10.2 or 50.10.9—

- containing less than 50 per cent by

weight of silk, waste silk or noil silk .. - other .. .. . . ..

(2) Fabric of continuous man-made fibres fall­ ing within 51.04.4, 51.04.5 or 51.04.9— - of polypropylene or of polyethylene .. - other .. .. . . ..

(3) Fabric of cotton containing not less than 20 per cent by weight of man-made fibres falling within 55.09.4 .. . . ..

(4) Fabric of man-made fibres (whether discon­ tinuous or waste) falling within 56.07.9— - weighing less than 130 grains per square metre and not for use as or in the

making up of bed sheets, pillow cases or bolster cases . . . . ..

(5) Fabric falling within 39.01.3, 39.02.3, 39.03.3, 59.08.3, 59.08.4 or 59.08.9 ..

40% No change in existing tariff treatment

22.5% 40%

40%

Free

No change in existing tariff treatment

The Commission invited attention to its suggestion for duty-free entry of imports of New Zealand origin and to its suggestions on by-law. Attention was also invited to the dissenting views of Mr G. P. Hampel, expressed in the body of the report.

NITROGENOUS FERTILIZERS— (a) whether assistance should be accorded the production in Australia of materials being, or principally used as, nitrogenous fertilizers; and (b) if it is found that assistance should be accorded, then having

regard to the Government’s desire that users of nitrogenous fertilizers should have access to nitrogenous fertilizers at prices which are not increased by protective rates of duty in the

Customs Tariff 1966-1971, the nature and extent of such assistance. COPPER FOIL— (a) whether assistance should be accorded the production in Australia of—

goods falling within item 74.05 of the First Schedule to the Customs Tariff 1966-1972; and if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of tbe First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned. POLYAMIDE OR POLYESTER YARNS---(a) whether protection should be accorded the production in Australia of—

raw yarns, wholly of or of which not less than 50% by weight of the man-made fibres are polyamide fibres or polyester fibres or a mixture of polyamide and polyester fibres of a kind falling

within sub-item 51.01.9 of the First Schedule to the Customs Tariff 1966-1972; (b) if the Board's findings in respect of (a) arc for assistance through the Customs Tariff, what rates of duty should be provided for in

columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

By letter dated 26.11.74(c) the Commission made mentary recommendations:

Containing less than 50% by weight of silk, waste silk or noil

the following supple-R atesofD uty

55% or, if higher, $0.24 per sq m

Weighing not less than 130 grams per square metre and not for use as or in the making up of bed

sheets, pillow cases or bolster

55% or, if higher, $0.24 per sq m

55% or, if higher, $0.24 per sq m

cases

REPORT SIGNED 16.7.74 The Commission recommended that assistance be not accorded the pro­ duction in Australia of materials being, or principally used as, nitro­ genous fertilizers.

Attention was drawn to the Commission’s suggestion regarding the basis for collection of dumping duties.

DRAFT REPORT RELEASED. PROGRAMMED FOR SUPPLEMENTARY PUBLIC HEARING This reference will be reported on in association with the reference of 6.11.72 on Primary Shapes produced by Rolling, Drawing, Extruding of Non-Ferrous Metal.

REPORT SIGNED 18.6.74 This reference was reported on in association with the reference of 8.11.72 on Polyamide or Polyester Processed Yarns. The Commission recommended that the goods under reference be dutiable

at a rate of 15% and that imports of New Zealand origin be free of duty. The Commission invited attention to its suggestions regarding by-laws in section 2.3. By letter dated 26.11.74(c) the Commission made the following supple­

mentary recommendations: Present

Yarns, wholly or of which not less than 50% by weight of the man­ made fibre are polyamide fibres or polyester fibres or a mixture of polyamide and polyester fibres ..

Rates of Duty

20% of letter appears at end of table.

TABLE 4.2.2—continued

Stage of inquiry at 30 June 1975

REPORT SIGNED 31.7.74 The report also covered an inquiry, initiated by the Tariff Board, the dumping of Chopped Strand Mat. The Commission found that:

(a) glass fibre rovings and chopped strand mat have been sold to persons in Australia at export prices which are less than the normal values in the countries of exportation; (b) the exportation of those goods has caused but was not then

causing or threatening injury to an Australian industry; and (c) dumping duties should be applied to glass fibre rovings exported on or after 2 November 1972. Attention was invited to the Com­ mission’s suggestions that dumping duties not be levied on chopped

strand mat or on imports of glass fibre rovings after 31 December 1973 but that the situation in respect of both products be kept under review.

REPORT SIGNED 25.6.74 The Commission recommended that the goods under reference be dutiable as follows: Tyre cords which fall to items 59.04.2 and

70.20.22

Tyre cord fabrics which fall to items 51.04.2, 51.04.3, 55.09.2 and 70.20.22 ..

19.11.2)

Rate of Duty

No change in the existing duties

15% The rate of duty that would apply to the goods if they were

not rubberised.

The Commission invited attention to its suggestion for duty free entry of imports of tyre fabrics of New Zealand origin. It also invited attention to its comments regarding the reduction in duties applying to viscose high tenacity yarn in the event that local production of that yarn should

cease. By letter dated 26.11.74(c) the Commission made the following supple­ mentary recommendations: Tariff Item Rates of Duty

Continuous man-made fibre tyre cord fabrics

Glass fibre tyre cord fabric

50%

20% 20% 20%

REPO RT SIGNED 2 4 .4 .7 5

(a) whether assistance should be accorded the production in Australia of goods falling within items 41.01 to 41.10 inclusive, 43.01 and 43.02 in the First Schedule to the Customs Tariff 1966-1972; and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

TANNED AND FIN ISH ED LEATHER; DRESSED FU R —

The Commission recommended that the goods under reference be dutiable as follows:

Goods Rate of duty

(i)1 . Raw hides or skins falling within item 41.01; . Raw furskins falling within item 43.01; . Wet blue hides or skins falling within

item 41.02, 41.03 or 41.05; . Crust or rough tanned goat and kid

skin leather falling within sub-item 41.04.1

► Minimum rates

(fi) . Furskins, tanned or dressed, assembled in plates, crosses and similar forms falling within sub-item 43.02.1 .. .. 25%

(in) . Other . . .. .. . · 15%

The above recommendations were made on the assumption that primage duties would not apply. Attention was also invited to comments and suggestions made in the conclusions.

LEATHER AND LEATHER SUBSTITUTE PRODUCTS— REPORT SIGNED 10.6.75

(a) whether assistance should be accorded the production in Australia of saddlery and harness, travel goods, handbags and the like and other goods falling within items 42.01, 42.02, sub-items 42.03.4, 42.03.9 (belts only), items 42.04 and 42.05 and sub-item 43.04.9

in the First Schedule to the Customs Tariff 1966-1972 and, if so, the nature and extent of such assistance; and

(b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

The Commission recommended that the goods under reference be made dutiable as follows: (1) Goods falling within sub-item 43.04.9 . . 12% (2) Goods falling within sub-items 42.02.9 and

42.03.9: . on implementation .. . . . . 34%

. after 1 year .. .. .. 25%

(3) Other goods under reference .. .. 25%

These recommendations were made on the assumption that primage duties would not apply. Attention was invited to the suggestions in the report regarding: . the Preferential rates of duty which should apply to goods covered

by recommendation 2 above; . goods of New Zealand origin; and . goods from Developing Countries.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

6.11.72 hosiery— PUBLIC hearing completed but not reported on

(a) whether assistance should be accorded the production in Australia of goods falling within item 60.03 and sub-item 60.04.4 in the First Schedule to the Customs Tariff 1966-1972 and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned. 6.11.72 FOUNDATION GARMENTS—

(a) whether assistance should be accorded the production in Australia of foundation garments falling within item 61.09 and goods falling within item 98.13 in the First Schedule to the Customs Tariff 1966-1972 and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

6.11.72 PRIMARY SHAPES PRODUCED BY ROLLING, DRAWING, EXTRUDING OF NON- FERROUS METAL—

(a) whether assistance should be accorded the production in Australia of— '

non-ferrous metals falling within the following items or parts of items of the First Schedule to the Customs Tariff 1966-1972: 71.05, 71.07, 71.08, 74.03, 74.04, 74.07, 74.12, 75.02, 75.03.1, 75.03.9, 75.04.1 excluding tube and pipe fittings, 75.04.9

excluding tube and pipe fittings, 77.02, 77.04, 78.01.9, 78.02, 78.03, 78.04, 78.05 excluding tube and pipe fittings, 79.02, 79.03.2, 79.04 excluding tube and pipe fittings, 80.01.1, 80.02, 80.03, 80.04.1, 80.05 excluding tube and pipe fittings, 81.01.2,

81.01.9, 81.02.9, 81.04.4, 81.04.5, 81.04.6, 81.04.7 and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in

columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

REPORT SIGNED 28.6.74 The Commission recommended that the goods under reference be dutiable at 25 per cent. The above recommendation was made on the assumption that primage

duty would not apply. Attention was invited to the Commission’s suggestions on Preferential rates of duty. By letter dated 26.11.74(c) the Commission made the following supple­

mentary recommendations: Tariff Item Rates of D uty

61.09.1 42.5%

61.09.2 57.5%

DRAFT REPORT RELEASED. PROGRAMMED FOR SUPPLEMENTARY PUBLIC HEARING

This reference will be reported on ini association with the reference of 11.5.72 on Copper Foil.

(c) Text of letter appears at end of table.

6.11.72 MISCELLANEOUS IN D U ST R IA L MACHINERY— (a) whether assistance should be accorded the production in Australia of— Industrial machinery and equipment—and other goods, including

parts therefor, falling within the following items or parts of items of the First Schedule to the Customs Tariff 1966-1972: 73.40.2, 73.40.3, 73.40.4, 84.11.5 excluding hand operated inflators, 84.11.6 excluding foot operated inflators, 84.11.9

excluding air pumps and compressors, 84.16, 84.17.1, 84.17.2, 84.17.3, 84.17.4 excluding gas-fired water heaters, 84.17.5, 84.17.6, 84.17.9 excluding instantaneous or storage water heaters, 84.18.1 excluding centrifuges, 84.18.4, 84.18.5, 84.18.61 excluding original components in tractors and tractor derivatives, 84.18.69, 84.18.9, 84.19.1, 84.19.9, 84.21.1 excluding pumping units for fire fighting, 84.21.2 excluding

hand fire extinguishers, 84.21.3 excluding fire extinguishers, 84.21.5, 84.21.7 excluding garden and field irrigators, appli­ ances for spraying or dispersing pesticides or herbicides, 84.21.9, 84.22.29 excluding chain hoists and chain pulley

tackle, 84.23.92, 84.41 excluding machine heads imported separately, 84.42, 85.54.3, 84.54.9, 84.55.9 parts and acces­ sories failing within 84.55.9 for goods of a kind falling within 84.54.3 and 84.54.9, 84.57, 84.58, 84.59.1, 84.59.2, 84.59.3,

84.59.5, 84.59.6, 84.59.9, 84.60, 84.62 other than 84.62.4, 84.63.1 excluding goods for use as original components in engines for tractors or tractor derivatives, 84.63.6, 84.63.7, 84.63.8, 84.64, 84.65, ex 96.02.5 being brushes being parts for

non-domestic type vacuum cleaners only and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in

columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

6.11.72 pum ps and compressors— (a) whether assistance should be accorded the production in Australia of— pumps, pumping equipment and air and gas compressors and

other goods, including parts therefor, falling within the following items or parts of items of the First Schedule to the Customs Tariff 1966-1971: 84.11.1, 84.11.4, 84.11.5 inflators only, 84.11.6 inflators only,

84.11.9 pumps and compressors only, 84.21.1 only pumping units specially designed for fire fighting and, if so, the nature and extent of such assistance; and

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

6.11.72 pum ps and compressors—continued

(b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1971 in respect of the goods concerned.

7.11.72 COMMERCIAL MOTOR VEHICLES, PARTS AND ACCESSORIES—

(a) whether assistance should be accorded the production in Australia of—

(1) vehicles of a kind falling within sub-items 87.01.1, 87.02.1 and item 87.03 of the Customs Tariff 1966-1973, having a gross vehicle weight of 6000 lb. or more (not including vehicles covered by the Government’s Vehicle Manufac­

turing Plans and other motor cars, station wagons or derivatives thereof being goods falling within paragraph 87.02.19); (2) vehicles of a kind falling within paragraph 87.14.11 of the

Customs Tariff 1966-1972; and (3) subject to the next paragraph, chassis, bodies and com­ ponents, for use with vehicles specified in sub-paragraph (a) (1) or (a) '(2) above (as original equipment or other­

wise) as follows: (a) chassis fitted with engines of a kind falling within item 87.04; (b) bodies (including cabs) of a kind falling within

item 87.05; (c) internal combustion piston engines and engine parts of a kind falling within sub-item 84.06.1, 84.06.2, 84.06.3 or 84.06.4; (d) parts and accessories of a kind falling within sub­

item 84.63.2, item 87.06 or sub-item 87.14.2; and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in

Columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of goods concerned.

REPORT SIGNED 17.9.74

The Commission recommended that the goods under reference be made dutiable as follows:

Goods Rate of duty 1

(1) Goods (including all unassembled vehicles; assembled general purpose vehicles having a g.v.w. of less than 15 tonnes and a torque rating of less than 550 Newton metres; dump

trucks; air cushion vehicles; and other assembled special vehicles having a g.v.w. of less than 15 tonnes), other than those specified in (2), (3), (4) and (5) below .. 25%

(2) Assembled general purpose vehicles, having a g.v.w. of ,15 tonnes or more or a torque rating of 550 Newton metres or more (cur­ rently classifiable within items 87.01.19 and 87.02.129); assembled special vehicles, having a g.v.w. of 15 tonnes or more

(items 87.03.1 excluding air cushion

vehicles, 87.03.921 excluding crane super­ structures, 87.03.929 and 87.03.99 exclu­ ding crane superstructures); assembled semi-trailers (item 84.14.111) . . . . 15%

(3) Crane superstructures forming part of com­ plete truck mounted cranes (items

87.03.921 and 87.03.99) .. . . 35%

(4) Components, other than of a kind specified in (5) below . upon implementation of the report . . 35%

This reference does not apply to the following goods whether imported separately or incorporated in or forming part of other goods, viz;

- distributors - high tension ignition coils, 6V or 12V rating - automatic voltage regulators for 6V or 12V systems - generators, 6V or 12V rating - starting motors, 6V or 12V rating - sparking plugs - batteries - radio receivers - television receivers (not including picture tubes) - picture tubes - radio and television transmitters - tyres and tubes - electrical warning devices capable of giving an audible warning - shock absorbers - windscreen wipers - cigarette or cigar lighters - seat belts.

. 1 January 1980 . . · · · · 30%

. 1 January 1982 .. · · · · 25%

except that components under reference for use as original equipment in the manufac­ ture or assembly of commercial motor vehicles be dutiable upon implementation of the report at 25 per cent. (5) Fuel injection equipment for compression

ignition engines and parts therefor (item 84.06.39) . . . . ·· ·· Minimum rates

The recommendations were made on the assumption that primage duty would not apply to the goods under reference. _ The Commission invited attention to its comments in respect of the following: _ _

(a) the by-law admission of components for commercial vehicles; (b) the tariff treatment of goods imported from New Zealand, Canada and developing countries; (c) the tariff treatment of specified components; (d) the tariff treatment of prime movers of less than 2.7 tonnes g.v.w.; (e) the import licensing of used, second-hand or disposals equipment; (f) the removal of the by-law relating to fire engines of item 87.03.1

and of the Parts Direction covering goods for use with fire engines; and (g) the importation of certain vehicles at prices below stated current domestic values in the country of origin.

8.11.72 POLYAMIDE OR POLYESTER PROCESSED YARNS— (a) whether protection should be accorded the production in Australia of yarns, other than raw yarns, wholly of or of which not less than 50% by weight of the man-made fibres are polyamide fibres

or polyester fibres or a mixture of polyamide and polyester fibres of a kind falling within sub-item 51.01.9 of the First Schedule to the Customs Tariff 1966-1972; (b) if the Board’s findings in respect of (a) are for assistance through

the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

REPORT SIGNED 18.6.74 This reference was reported on in association with the reference of 18.5.72 on Polyamide or Polyester Yarns. The Commission recommended that the goods under reference be dutiable

at a rate of 15 per cent and that imports of New Zealand origin be free of duty. The Commission invited attention to its suggestions regarding by-laws in Section 2.3 of the report. By letter dated 26.11.74(c) the Commission made the following supple­

mentary recommendations: Present Tariff Item Rates of Duty

ex 51.01.9 Yams, wholly or of which not less than 50% by weight of the man­ made fibre are polyamide fibres or polyester fibres or a mixture of

polyamide and polyester fibres . . 20%

(e) Text of letter appears at end of table.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

7.12.72 report signed 27.9.73 in respect of: ELECTRONIC AND ELECTRICAL EQUIPMENT— (a) whether assistance should be accorded the production in Australia of— electronic and electrical equipment—and other goods, including

parts therefor, falling within the following items or parts of items of the First Schedule to the Customs Tariff 1966-1972: 83.15, 84.53, parts and accessories falling within 84.55.9 for goods of a kind falling within 84.53, 85.01, 85.02, 85.07.2,

85.07.9, 85.10, ex 85.12.1 being heating resistors (elements), ex 85.12.9 being heating resistors (elements), 85.13, 85.14, 85.15, 85.16, 85.17, 85.18 1, 85.18.3, 85.18.9, 85.19.2, 85.19.3, 85.19.42, 85.19.43 excluding lightning arresters,

85.19.44, 85.19.45, 85.19.46, 85.19.47, 85.19.49, 85.19.5, 85.19.6, 85.19.9, 85.20.3, 85.20.4, 85.20.5, 85.21, 85.22, 85.24, 85.26, 85.28, 90.13.4, ex 90.19.1 being deaf aids, 90.20.1, 90.20.2, 90.26.3, 90.27.2, 90.27.3, parts and

accessories falling within 90.29.9 for goods of a kind falling within 90 26.3 or 90.27.2 or 90.27.3, 92.11, 92.12, 92.13, 97.03.02 and 98.16.2.

and, if so, the nature and extent of such assistance; and (b) if the Board’s findings in respect of (a) are for assistance through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff

l966i-1972 in respect of the goods concerned.

Sub-Industry A1—Television receivers and components therefor. Sub-Industry A2—Radios, radiograms, sound recorders and reproducers, and recording media. Sub-Industry C—Components for electronic consumer durables and other

electronic equipment. These Sub-Industries were reported on in association with the reference of 7.12,72 on Colour Television Sets and Components therefor. The recom­ mendations in this report were included in the Industries Assistance

Commission Annual Report 1973-74.

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON IN RESPECT OF:

Sub-Industry B—Radio television broadcasting and transmission apparatus and radio remote control apparatus. Sub-Industry D—Telephone and telegraph equipment. Sub-Industry F —Motors, generators, rotary converters.

Sub-Industry G—Welding, consumables and flux cored solder. Sub-Industry I—Electrical household fitting and accessories. Sub-Industry J—Power and distribution transformers. Sub-Industry K—Transformers and condensers for lighting and other pur­

poses. Sub-Industry L—Regulating, starting and controlling apparatus. Sub-Industry M—Other electrical equipment. Some Sub-Industries will be reported on concurrently specifically: B and

D, L and M, J and K. Sub-Industry E will be reported on in association with the reference of 26.9.74 on Computer disc packs and computer disc pack cartridges.

DRAFT REPORT RELEASED. PROGRAMMED FOR SUPPLEMENTARY PUBLIC HEARING Sub-Industry H—Filament, fluorescent and other discharge lamps.

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON 23. 3.73 SPECTACLE AND SUNGLASS FRAMES, SUNGLASSES, ETC.— (a ) w hether assistance should be accorded th e pro d u ctio n in A ustralia of spectacle fram es, sunglass fram es, sunglasses an d o th er goods falling w ithin item 9 0 .0 3 o r 9 0 .0 4 o f th e F irs t Schedule to the

C u s to m s T a riff 1966-1972 and, if so found, th e n a tu re an d extent

o f such assistance; and

(b ) if th e B oard's findings in respect o f ( a ) are fo r assistance th ro u g h

the C ustom s Tariff, w hat rates o f d u ty should b e provided f o r in

the F irst Schedule to th e C u s to m s T a r iff 1966-1972 in respect of

th e goods concerned.

3. 7.73 OXO ALCOHOLS, BUTYL ACETATES, ETC.— NOT PROGRAMMED FOR PUBLIC HEARING

(a ) w hether assistance should be accorded th e pro d u ctio n in A ustralia of goods of a kind specified in C olum n 1 of th e T able h ereunder

being goods th a t if im ported would fall w ithin a sub-item in the

F irst Schedule to the C u s to m s T a r iff 1966-1972 set o ut in C olum n 2 o f th a t T able opposite those goods:

THE TABLE

Column 1 Column 2

Fatty alcohols .. .. .. sub-item 15.10.3

Alcohols .. . . .. .. sub-item 29.04.3

n-Butyl alcohol . . .. .. sub-item 29.04.4

Butyl acetates . . .. .. sub-item 29.14.1

n-Butyl acetate .. .. ..

Phthajic anhydride . . .. 1

sub-item 29.14.2

Esters .. .. .. } ■

Phthalic acid . . .. J

sub-item 29.15.1

Isophthalic acid . . .. 1

Esters .. . . " .. J sub-item 29.15.9

Esters of phthalic and or isophthalic acid .. . . .. .. sub-item 29.16.2

Esters, mixtures and preparations .. Goods in which the constituent that gives sub-item 38.19.4 the goods their essential character is

included in this table .. .. sub-item 38.19.9

and, if so found, the nature and extent o f such assistance.

(b ) if the B oard’s findings in respect of (a ) are fo r assistance through

th e C ustom s T ariff, w hat rates o f duty should b e provided fo r in

the Schedules to the C u s to m s T a riff 1966-1972 in respect of the

goods concerned.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

23. 7.73 FLOOR AND WALL TILES, ETC.— REPORT SIGNED 11.4.75

( a ) w hether assistance should be accorded th e p ro d u ctio n in A ustralia of glazed a n d unglazed setts, flags an d paving, h e a rth an d w all tiles of a k in d falling w ithin item s 6 9.07 and 6 9 .0 8 of th e F irs t

Schedule to th e Customs Tariff 1966-1972 an d , if so fo u n d , th e

n a tu re an d extent o f su ch assistance; and ( b ) if the B o a rd ’s findings in respect o f (a ) are fo r assistance through

th e C ustom s T ariff, w h at ra te s o f duty should be provided fo r in

th e F irst Schedule to th e Customs Tariff 1966-1972 in respect of the goods concerned.

T h e C om m ission recom m ended th a t:

(i) w ith th e exception o f tiles less th a n 5,000 sq m m in a re a o r m ore

th a n 12 m m in thickness, th e goods identified in th e M inister’s

reference be m ad e dutiable a t 30 per cent;

(ii) ceram ic floor a n d w all tiles less th a n 5,000 sq m m in a re a o r m o re

th a n 12 m m in thickness a n d falling w ithin item 6 9 .0 7 o r item

6 9 .0 8 be m ad e d u tiab le a t m inim um ra te s; an d

(iii) glass m osaic tile s falling w ithin item 7 0 .1 9 .3 b e m ade d u tia b le a t

m inim um rates.

A ttention w as invited t o th e C om m ission’s com m ents o n:

. exports to A u stra lia a t prices below cu rre n t dom estic v alu es in th e

countries o f origin; . by-law adm ission o f certain o f th e goods under reference; an d

. the tariff tre a tm e n t o f goods im p o rted fro m D eveloping C ountries

an d N ew Z ealand.

2 7 . 8 .7 3 PASSENGER MOTOR VEHICLES, ETC.—

(a ) w hether assistance should be acco rd ed th e p ro d u ctio n in A ustralia of—

REPORT SIGNED 10.7.74

T h e C om m ission recom m ended th a t the goods u n d er reference be m ade

d u tiab le as follow s:

(i) vehicles o f a k in d falling w ithin p arag rap h s 8 7 .0 2 .1 1 and

87 0 2 .1 3 of th e F irs t Schedule to th e Customs Tariff

1966-1972, having a gross vehicle w eight o f less th a n 6,000 lb; ,

(ii) vehicles of a k in d falling w ithin p arag rap h s 8 7 .0 2 .1 9 ,

sub-item s 8 7 .0 2 .2 a n d 8 7 .0 2 .9 o f the F irs t Schedule to the

Customs Tariff 1966-1972;

(iii) chassis fitted w ith engines o f a k in d falling w ithin sub-item 8 7 .0 4 .9 o f the F irst S chedule to th e Customs Tariff

1966-1972;

(iv) bodies (including cabs) o f a k in d falling w ithin item 8 7.05

of th e F irs t Schedule to th e Customs Tariff 1966-1972;

(v) p arts an d accessories fo r m o to r vehicles o f a k in d falling

w ithin sub-paragraphs 8 7 .0 6 .9 1 1 , 8 7 .0 6 .9 1 9 an d parag rap h 8 7 .0 6 .9 9 of th e F irst Schedule to the Customs Tariff

1966-1972;

Goods 1

(1) Goods (including passenger and light com­ mercial vehicles and components) other than those specified in (2) and (3) below: . upon implementation of the report ..

. 1 January 1980 . . .. ..

. 1 January 1982 .. .. ..

(2) Goods, as follows .. .. ..

. fuel injection equipment for compression ignition engines and parts therefor; motor cycle carburettors and parts therefor (item 84.06.39)

. magnetos, not being magnetos of the fly­ wheel type (item 85.08 2)

Rate of duty

35% 30% 25%

M inim um rates

(vi) vehicles o f a k in d falling w ithin p arag rap h 8 7 .1 4 .1 9 o f the

F irs t Schedule to th e Customs Tariff 1966-1972 (n o t inclu­ ding h a n d p ropelled vehicles an d vehicles draw n by

an im als);

(vii) shock absorbers an d p a rts th erefo r o f a kind falling within

sub-paragraph 8 7 .1 4 .2 1 1 of th e F irst Schedule to the

Customs Tariff 1966-1972; (viii) p a rts fo r vehicles o f a k in d falling w ithin p arag rap h

8 7 .1 4 .2 9 o f the F irst Schedule to th e Customs Tariff

1966-1972 (n o t including p arts fo r h an d propelled vehicles an d vehicles d ra w n by anim als); (ix) in tern al com bustion pisto n engines an d engine p a rts o f a

k in d falling w ithin sub-item s 8 4 .0 6 .1 , 8 4 .0 6 .2 , 8 4 .0 6 .3 and 8 4 .0 6 .4 o f the F irs t Schedule to the Customs Tariff 1966­ 1972; an d (x ) goods o f a k in d falling w ithin sub-item s 6 8 .1 4 .1 , 7 0 .0 8 .1 ,

paragraphs 7 0 .0 9 .1 9 , 7 0 .1 4 .4 1 , 8 4 .1 8 .6 2 and 8 4 .1 8 .6 3 ,

sub-item s 8 4 .2 1 .4 , 8 4 .6 2 .4 , 8 4 .6 3 .2 , 8 5 .0 8 .1 , 8 5 .0 8 .2 ,

8 5 .0 8 .3 , 8 5 .0 8 .5 , 8 5 .0 8 6 , 8 5 .0 8 .7 , 8 5 .0 8 .8 , 8 5 .0 8 .9 ,

8 5 .0 9 .1 (excluding dynam os o f a kind used solely or

principally w ith lighting sets th a t fall into 8 5 .0 9 .2 ) ,

8 5 .0 9 .5 , 8 5 .0 9 .6 , 8 5 .0 9 .9 , 8 5 .1 2 .7 , 8 5 .1 8 .2 , 8 5 .1 9 .1 ,

8 5 .2 0 .1 , 8 5 .2 0 2 , 8 5 .2 3 .1 an d 9 0 .0 1 .3 , parag rap h

9 0 .2 4 .9 5 , sub-item 9 0 .2 7 .4 , sub-paragraphs 9 0 .2 8 .2 6 2 ,

9 0 .2 8 .2 6 6 and 9 0 .2 8 911 o f the F irst Schedule to the

Customs Tariff 1966-1972 and, if so, the n a tu re an d extent o f such assistance; and (b ) if th e B oard’s findings in respect of ( a ) are fo r assistance through

the C ustom s T ariff, w hat rates of duty should be provided fo r in

colum ns 3 an d 4 o f the F irst Schedule to th e Customs Tariff

1966-1972 in respect of the goods concerned.

(c) w hat w ould be the likely effects o f its recom m endations on

em ploym ent, and on th e prices o f m otor vehicles to A ustralian

consum ers.

(d ) w hat additional assistance, if any, w ould be necessary to encourage the production in country areas o f the goods specified u n d er (a )

above.

In conducting its inquiry and preparing its re p o rt on this reference the

B oard should have regard fo r the G overnm ent’s desire—

(1) to im prove th e efficiency w ith w hich the com m unity’s productive resources are used an d to recognise the interests of consum ers;

(2) to m aintain in A ustralia a viable autom otive industry w hich— . achieves th e highest possible level o f technical an d econom ic efficiency w ith high A ustralian content . achieves pro d u ct rationalization

. distributors, o th e r th an distributors o f a

k in d fo r use w ith m o to r vehicles (item

8 5 .0 8 .5 4 ).

(3) G oods, as follow s . . . . . . 2 5 %

. sealed beam lam ps (item 8 5 .0 9 .5 )

. filam ent lam ps o f a k in d ordinarily used

in m otor vehicles fo r lighting purposes

(item s 8 5 .2 0 .1 an d 8 5 .2 0 .2 ) . battery o p erated vehicles (item 8 7 .0 2 .1 )

. air-cushion vehicles (item 8 7 .0 2 .2 ) . vehicles o f a k in d falling w ithin item

8 7 .0 2 .9 . trailers, caravans an d o th er vehicles

falling w ithin item 8 7 .1 4 .1 9 . p arts falling w ithin item s 8 7 .1 4 .2 1 1 and

8 7 .1 4 .2 9 .

T hese recom m endations w ere m ade on th e assum ption th a t prim age duties w ould n o t apply.

T h e Com m ission also recom m ended th a t the m o to r vehicle local co n ten t plans and th e com ponent m anufacturing program s be abolished as fro m the date o f im plem entation of the rep o rt.

T he Com m ission invited atten tio n to its com m ents in respect o f the

follow ing:

(a ) th e provision of adjustm ent assistance to em ployees an d firm s in

th e industry; (b ) the by-law adm ission o f com ponents fo r m o to r vehicles an d o f

p a rts for com ponents; (c) the tariff tre a tm e n t o f goods im p o rted fro m N ew Z ealand, C anada

an d D eveloping C ountries; (d ) the tariff treatm en t o f specified com ponents and item 26 o f the

Second Schedule to the C ustom s Tariff; (e) th e im p o rt licensing o f certain used, second-hand o r disposal

equipm ent; (f) assistance to encourage location in country areas; (g) A ustralian equity in th e m o to r vehicle industry; (h ) the need fo r G overnm ent initiatives to :

(i) im prove lab o u r relations in the m o to r vehicle industry, an d

(ii) foster com ponent com m onality; (i) regional com plem entation schem es; (j) m arketing and pricing of com ponents; (k ) vehicle safety an d em ission control.

TABLE 4.2.2—continued

REPORT SIGNED 12.3.74 T h e C om m ission rep o rted on th is reference in association w ith th e re fe r­ ence o n W ood, c u t t o size fo r m aking boxes, etc., d a te d 27.8.73.

T h e C om m ission fo u n d th a t inclusion o f th e goods u n d e r reference

Schedule A w ould n o t be seriously detrim ental to a local industry.

27. 8.73 wood, cut το size for making boxes; wooden beadings and mouldings; builders’ carpentry; wooden tools, tool bodies and tool handles, BROOM AND BRUSH BODIES AND HANDLES; AND CERTAIN PLANAR FORMS OF WOODS (NZAFTA)—

H aving regard to the objectives an d o ther provisions o f the N ew Zealand- A ustralia F re e T rad e A greem ent— (a ) w hether the inclusion in Schedule A o f th a t A greem ent o f any

o f the goods described in th e second colum n o f th e A ttachm ent to this reference, an d falling w ithin the item o r p a rt o f th e item

o f the C u s to m s T a riff 1966-1972 show n in the first colum n o f

th e A ttachm ent in relation to the goods, w ould be seriously

detrim ental to an A ustralian Industry; and

(b ) if th e B oard’s findings in respect o f ( a ) are th a t inclusion in

Schedule A w ould be seriously detrim ental to a n A ustralian

industry then w hat rates o f duty should be provided fo r in P art

V o f the F ifth Schedule to th e C u s to m s T a r iff 1966-1972 in

respect o f the goods concerned.

I also direct, in accordance w ith Section 16aa o f th e T a r iff B o a rd A c t

1921-1972, th at the inquiry an d re p o rt o n this m atter b e m ade by a

Division o f the B oard constituted by a single m em ber.

REPORT SIGNED 12.3.74

T he Com m ission rep o rted on this reference in association w ith th e re fe r­ ence o n S team an d O th er V ap o u r G enerating Boilers, etc., d a te d 27.8.73. (See above)

ATTACHMENT

T a riff ite m or p a rt o f ite m G o o d s

44.13.2

44.19

44.23.100

44.25

44.28.900

W ood, cut to size for m aking boxes.

W ooden beadings an d m ouldings, including m oulded skirting and o th er m oulded boards.

Builders’. carpentry, fo r exam ple beam s, ra ft­ ers, ro o f trusses and like stru ctu ral tim ber,

in a n unassem bled o r disassem bled condi­ tion, o f w ood n ot being goods o f plywood,

cellular wood, im proved wood o r reconsti­ tu ted wood.

W ooden tools, tool bodies an d tool handles,

b room and b rush bodies an d handles.

O ther goods m ade o f w ood:—■ P lan ar form s o f w ood joined lengthw ise

along the edge, tongued and grooved, one

face having been treated by sandblasting,

m oulding o r otherw ise to produce a

w eathered or like decorative effect.

TABLE 4.2.2—continued

Date of reference Terms of reference . Stage of inquiry at 30 June 1975

23.10.73 CLOTHING— PUBLIC HEARING NOT COMPLETED

(a ) w hether assistance should be accorded th e pro d u ctio n in A u stralia o f th e underm entioned goods, w hich if im ported, w o u ld be

classified as show n u n d er th e item s o r p a rts o f item s in th e F irst

S chedule to the C u s to m s T a r iff 1966-1972:

(i) apparel o f a k in d falling w ithin 39.07;

(ii) apparel an d o th er goods o f a kind falling w ithin item s 4 0 .1 3 ,

42 0 3 .1 , 4 2 .0 3 .2 , 4 2 .0 3 .3 , 4 2 .0 3 .9 excluding belts, 4 3 .0 3 ,

4 3 .0 4 .1 , 4 8 .2 1 .4 , 6 0 .0 1 .1 , 6 0 .0 1 .9 , 60.02, 6 0 .0 4 .2 , 6 0 .0 4 .3 , 60.04.5, 60 0 4 .6 , 6 0 .0 5 , 6 1 .0 1 , 6 1 .02, 6 1 .0 3 , 6 1 .0 4 , 6 1 .05,

6 1 .0 6 , 6 1 .0 7 , 6 1 .0 8 , 6 1 .1 0 , 6 1 .1 1 ; and, if so, the n atu re and extent o f such assistance; and

(b ) if th e B o ard ’s findings in respect o f (a ) are fo r assistance through

the C ustom s T ariff, w h at ra te s of duty should be provided f o r in

colum ns 3 an d 4 o f th e F irst Schedule to the C u s to m s T a riff

1966-1972 in respect o f th e goods concerned.

23.10.73 HEADWEAR— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

(a ) w hether assistance should be accorded th e p ro d u ctio n in A ustralia o f headgear an d o ther goods of a kind, including p a rts therefor,

falling w ithin item s 65 .0 1 , 65.02, 6 5 .03, 6 5 .04, 6 5 .05, 6 5 .0 6 and 6 5.07 o f the F irst S chedule to th e C u s to m s T a r iff 1966-1972; arid, if so, the nature an d ex ten t o f such assistance; and

(b ) if the B o ard ’s findings in respect o f ( a ) are fo r assistance through

th e C ustom s T ariff, w hat rates o f duty should be provided f o r in

colum ns 3 and 4 o f the F irst Schedule to th e C u s to m s T a riff

1966-1972 in respect of th e goods concerned.

13.12.73 mattresses, quilts, eiderdowns and cushions—

(a ) w hether assistance should b e accorded the pro d u ctio n in A ustralia of articles of bedding a n d other, goods o f a k in d falling w ithin

item 9 4 .0 4 of th e F irs t Schedule to th e C u s to m s T a r iff 1966-1972; and, if so, the n atu re an d extent of such assistance; and

(b ) if the B o ard ’s findings in resp ect of (a ) are fo r assistance through

the C ustom s Tariff, w hat rates o f duty should be provided fo r in

■ the F irst Schedule to th e C u s to m s T a riff 1966-1972 in respect of

the goods concerned. . . . . . . . .

REPORT SIGNED 23.8.74

T he Com m ission recom m ended th a t the goods u n d e r reference b e m ade dutiable as follow s:

R a te o f D u ty

. M attresses an d m attress su p p o rts . . . . M inim um rates

. O ther . . . . . . . . . . 15%

T he recom m endations w ere m ade on th e assum ption th a t prim age duties w ould n o t apply.

A ttention w as invited to th e C om m ission’s com m ents regarding im ports th e origins o f w hich are N ew Z ealand o r D eveloping C ountries,

13.12.73 BATTERIES—

(a) w hether assistance should be accorded the production in A u stralia of prim ary cells, prim ary batteries and electric accum ulators,

including p arts therefor, o f a kind falling w ithin item s 85.03 and 85.04 of the F irst Schedule to the Customs Tariff 1966-1972;

and, if so, th e nature and ex ten t of such assistance; and

if th e B oard’s findings in respect of ( a ) are fo r assistance through

the C ustom s Tariff, w hat rates of duty should be provided fo r in

the F irst Schedule to the Customs Tariff 1966-1972 in respect of the goods concerned.

13.12.73 paints, varnishes and lacquers—

(a)

By letter dated 13.2.75 th e C om m ission forw arded a supplem entary recom ­ m endation to the effect th at th e duty on goods u n d e r reference o th er

th an M attresses and M attress S up p o rts b e 35% u n til 31 D ecem ber 1975. It said that, if circum stances w arran ted it, the m a tte r could th en be

reviewed.

T he Com m ission also suggested th a t the level o f im ports fro m all

D eveloping C ountries be k ep t u n d er surveillance a n d th at, should

im ports fro m any one o f them becom e a significant p a rt o f th e A ustralian supply, consideration should be given to w ithdraw ing the preference.

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

w hether assistance should be accorded the pro d u ctio n in A ustralia of paints, varnishes and o th er goods o f a kind falling w ithin sub­

item s 3 2 .0 9 .3 and 3 2 .0 9 .9 , item s 3 2 .10, 3 2 .1 2 an d 3 8.18 o f the

F irst Schedule to th e Customs Tariff 1966-1972; and, if so, the

n atu re and extent of such assistance; and

(b ) if the B oard's findings in respect o f ( a ) are fo r assistance through

the C ustom s T ariff, w hat rates of duty should be provided fo r in

the F irst Schedule to the Customs Tariff 1966-1972 in re sp e c t, o f the goods concerned. ·

1 3 .1 2 .7 3 STEEL PIPES AND TUBES- ΝΟΤ PROGRAMMED FOR PUBLIC HEARING

w hether assistance should be accorded the production in A ustralia of pipes, tubes and o th er goods o f a k in d falling w ithin item s

73.17, 73.18, 7 3 .1 9 and 7 3 .2 0 of the F irst Schedule to the

Customs Tariff 1966-1972; and, if so, th e nature a n d ex te n t■ · of such assistance; and

if the B oard’s findings in respect o f ( a ) are fo r assistance through

the C ustom s T ariff, w hat ra te s o f duty should be provided fo r in

the F irst Schedule to the Customs tariff 1966-1972 in respect of the goods concerned.

TABLE 4.2.2—continued

D a te o f . λ . .

re fe re n c e T e r m s o f re fe re n c e ' ' ' S ta g e o f in q u iry a t 30 J u n e 1975

13.12.73 cosmetic and toilet preparations—

(a ) w hether assistance should be accorded th e pro d u ctio n in A ustralia of—

( i) perfum ery, cosm etic a n d toilet p rep aratio n s o f a k in d

falling w ithin item 3 3 .0 6 o f th e F irs t S chedule t o th e

C u s to m s T a r iff 1966-1972;

(ii) pow der-puffs a n d p a d s o f a k in d falling w ithin item 9 6 .0 5

o f th e F irs t S chedule to th e C u s to m s T a r iff 1966-1972; an d

(iii) scent a n d sim ilar sp ray s an d o th er goods, including p a rts

th erefo r, o f a k in d falling w ithin item 9 8 .1 4 o f th e F irs t

Schedule to th e C u s to m s T a r iff 1966-1972;

and, if so, th e n a tu re an d ex ten t o f such assistance; an d

( b ) if the B o ard ’s findings in respect o f ( a ) are fo r assistance th ro u g h

th e C ustom s T ariff, w h a t rates o f duty should b e provided f o r in

th e F irst Schedule to th e C u s to m s T a r iff 1966-1972 in respect of

th e goods concerned.

report signed 30.5.75

T h e C om m ission recom m ended th a t:

(1 ) joss sticks falling w ithin tariff item 3 3 .0 6 b e m ad e d u tiab le a t

m inim um rates;

(2 ) all o th e r goods fallin g w ithin tariff item 3 3 .0 6 be m ad e d u tiab le a t

a r a te o f 15 p e r c e n t;

(3 ) all o th er goods u n d e r reference b e m ade d u tiab le a t m inim um rates; an d

(4 ) the question o f assistance to th e cosm etics a n d to ilet p rep aratio n s

industry b e again re fe rre d to th e In d u stries A ssistance C om m ission tw o years fro m th e d a te o f th e G o v ern m en t’s decision o n th is rep o rt.

T hese recom m endations w ere m ad e o n th e assum ption th a t prim age

duties w ould n o t apply.

11. 2.74 internal combustion piston engines ( including diesel marine engines), etc.—

( a ) w hether th e A ustralian G overnm ent should acco rd assistance fo r th e pro d u ctio n in A u stra lia o f engines, engine p a rts an d o th er

goods w hich fall w ithin— ( i) sub-item 8 4 .0 6 .6 ; (ii) p arag rap h 8 4 .0 6 .7 1 ; (iii) p a ra g ra p h 8 4 .0 6 .7 2 ;

(iv) sub-item 8 4 .0 6 .9 (o th e r th a n m arin e diesel engines having a pow er exceeding 1,500' k W and p a rts fo r su ch e n g in es); (v) p arag rap h 8 4 .1 8 .6 4 ; (vi) p arag rap h 8 4 .1 8 .6 5 ; (vii) sub-item 8 4 .6 3 .3 ; o r (viii) sub-item 8 4 .6 3 .4 , o f th e F irst Schedule to th e C u s to m s T a r iff 1966-1973 and, if so,

w hat should be th e n a tu re an d extent o f the assistance; ( b ) w hether the A u stralian G overnm ent should acco rd assistance fo r th e p roduction in A u stralia o f m arin e diesel engines having a

pow er exceeding 1,500 k W an d p a rts f o r such engines w hich

fall w ithin sub-item 8 4 .0 6 .9 o f th e F irs t S chedule to th e C u s to m s

T a r iff 1966-1973 and, if so, w h at should b e th e n a tu re a n d extent

o f th e assistance;

T his reference is being rep o rte d o n in tw o parts. T h e re p o rt concerning

D iesel E ngines exceeding 1500 k W h as b een signed, w hile f o r th e

rem ainder o f th e reference, th e p ublic hearing, is com plete b u t it has

n o t y et been rep o rted on.

diesel engines (exceeding 1500 k w ) report signed 5.8.74

T h e C om m ission recom m ended th a t n o assistance b e acco rd ed th e p ro ­

duction in A u stralia o f diesel engines exceeding 1500 k W w hich fall

w ithin sub-item 8 4 .0 6 .9 o f th e C ustom s T ariff a n d n o change in th e

existing provisions relatin g to p a rts u n d er reference.

A tten tio n w as invited to th e C om m ission’s co m m en t concerning th e

co n tin u atio n o f o p eratio n s by A u stralian G overn m en t E ngine W orks

fo r o th er th a n econom ic reasons.

(c) whether the Australian Government should accord assistance for the production in Australia of goods (other than goods for use with steam or water turbines) which fall within paragraph 84.18.61 of the First Schedule to the Customs Tariff 1966-1973

and, if so, what should be the nature and extent of the assistance; (d) whether the Australian Government should accord assistance for the production in Australia of goods which fall within paragraph (c) of sub-item 84.63.1 of the First Schedule to the Customs

Tariff 1966-1973 and, if so, what should be the nature and extent of the assistance; and (e) whether the Australian Government should accord assistance for the production in Australia of induction coils which fall within

sub-item 85.08.4 of the First Schedule to the Customs Tariff 1966-1973 and, if so, what should be the nature and extent of the assistance; and

The reference required the Commission to report by 11.8.74 on (b) above.

SUPERPHOSPHATE--- DRAFT REPORT RELEASED. PROGRAMMED FOR SUPPLEMENTARY PUBLIC HEARING

(a) whether assistance should be accorded the production in Australia of superphosphate falling within items 31.03.100 and 31,05.110 of the First Schedule to the Customs Tariff 1966-1973 and, if so, the nature and extent of such assistance; and (b) if the Commission’s findings in respect of (a) are for assistance

through the Customs Tariff, what rates of duty should be provided for in columns 3 and 4 of the First Schedule to the Customs Tariff 1966-1973 in respect of the goods concerned.

REPORT SIGNED 9.4.75 The Commission recommended that the goods under reference be made

from yam, cord or

fibre sheet and

>15%

Minimum rates

The recommendations were made on the assumption that primage duties

TABLE 4.2.2—continued

Date o) reference Terms of reference Stage of inquiry at 30 June 1975

1. 3.74 fabricated asbestos, etc.—continued Attention was invited to the Commission’s suggestions in regard to the

duties on imports the origin of which is New Zealand, Canada or Developing Countries and regarding by-law matters.

8. 3.74 mushrooms—■ Whether the Australian Government should accord assistance for the production in Australia of mushrooms of a kind falling within sub­ items 07.01.3, 07.02.9, 07.04.3 and 20.02.3 of the First Schedule

to the Customs Tariff 1966-1972 and, if so found, the nature and extent of such assistance.

report signed 10.12.74

The Commission recommended that all goods under reference be made dutiable at 25 per cent. Attention was invited to the Commission’s comments in respect of the following:

. the tariff treatment of goods of New Zealand or Papua New Guinea origin; . the by-law admission of dried mushrooms and mushroom powder for certain end uses; . the effects of international commitments on goods falling within

sub-item 20.02.3 of the Customs Tariff; and . the provision of assistance for research into mushroom growing. Attention was also invited to the dissenting views expressed by Mr S. J. Cossar in the report.

11. 3.74 BOVINE BRUCELLOSIS AND TUBERCULOSIS SLAUGHTER COMPENSATION SCHEME—

(a) whether Australian Government financial assistance should con­ tinue to be given after 31 December 1975, to compensate producers for cattle found to be bovine tuberculosis reactors and slaughtered and, if so, the nature and extent of such assistance; (b) whether Australian Government financial assistance should be

given to compensate producers for cattle found to be bovine brucellosis reactors and slaughtered and, if so, ihe nature and extent of such assistance; (c) for what period of time should any recommended assistance be

provided.

The reference required the Commission to report by 11.4.75.

REPORT SIGNED 10.4.75

The Commission made the following recommendations:

T uberculosis . Australian Government financial assistance from consolidated revenue continue to be given after 31 December 1975 to compensate producers for cattle found to be bovine tuberculosis reactors and slaughtered

on a compulsory basis. Such assistance should be 50 per cent of net compensation cost; and

. such assistance continue until 31 December 1983;

Brucellosis ■ Australian Government financial assistance from consolidated revenue be given to compensate producers for cattle found to be bovine brucellosis reactors and slaughtered on a compulsory basis. Such

assistance should be 75 per cent of net compensation cost and should only be given if a program is adopted to achieve ‘provisionally-free’ brucellosis status throughout Australia by the end of 1983; and . such assistance continue until 31 December 1983

GENERAL

Attention was drawn to the Commission’s suggestion that: . the Australian Government should secure the agreement of State Governments that compensation for tuberculosis and brucellosis reactors should be based on ‘full market value’; . State Governments should contribute a proportion of net compensation

cost for tuberculosis and brucellosis reactors; . all possible steps should be taken to overcome unfair discounting of tuberculosis and brucellosis reactors; . Australian Government loan finance should be made available for

the brucellosis eradication program; and . registered stud cattle should be excluded from the compensation schemes.

Attention was also drawn to other suggestions made in the Conclusions sections of the report.

A P PL E AND PEAR IN D U S T RY — PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

(a) whether Australian Government financial assistance should continue to be given to assist in stabilising the returns to growers from exports of fresh apples and fresh pears beyond the seasons commencing 1 October 1974 and, if so, what should be the

nature and extent of the assistance; (b) for what period of time should anv recommended assistance be provided.

The reference requires the Commission to report by 11.9.75.

DRIED VINE FRUITS INDUSTRY— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

(a) whether Australian Government financial assistance should continue to be given to assist in stabilising the returns to growers from dried vine fruit production beyond the season commencing 1 January 1975 and, if so, what should be the nature and extent of the assistance;

(b) for what period of time should any recommended assistance be provided.

For the purposes of this reference dried vine fruits are taken to be currants, sultanas and raisins.

The reference requires the Commission to report by 11.9.75.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

5. 4.74

5. 4.74

FINANCING PROMOTION OF RURAL PRODUCTS—■ PUBLIC HEARING NOT COMPLETED Whether funds should continue to be provided by the Australian Government to finance, or assist in financing, promotion of rural products (including processed products) and, if so:

(a) what should be the nature and extent of the assistance provided by the Australian Government; (b) what criteria should be used in determining promotion

expenditure and apportioning such expenditure among rural products; (c) for what period of time should any recommended assistance be provided. For the purpose of this reference rural products include fisheries

products.

The reference requires the Commission to report by 5.7.76.

FINANCING RURAL RESEARCH—

Whether funds should continue to be provided by the Australian Government to finance, or assist in financing, rural research, and, if so: (a) what should be the nature and extent of the assistance provided

by the Australian Government. (b) what criteria should be used in determining and apportioning research expenditure. For the purposes of this reference rural research includes research

into fisheries.

REFERENCE SUPERSEDED BY REFERENCE ON FINANCING RURAL RESEARCH DATED 29.1.75

8. 4.74 REPORT SIGNED 6.6.75

The Commission recommended that:

PRODUCTION OF GOLD— Whether the Australian Government should accord assistance including assistance by way of taxation treatment for the production in Aus­ tralia of gold. The reference required the Commission to report by 8.6.75 and, to

include the small gold prospector in its inquiry and report.

(1) the Gold-Mining Industry Assistance Act be allowed to lapse; (2) (a) existing taxation concessions under Sections 23 (o); 23c (1), 23c (2) of the Income Tax Assessment Act be phased out by 1980 on the following basis:

Year ended 30 June 1976—100% of concession to apply Year ended 30 June 1977— 90% of concession to apply

RURAL RECONSTRUCTION— What assistance should be provided after 30 June 1976 for rural reconstruction and for what period of time should any recommended assistance be provided. The reference requires the Commission to report by 31.12.75.

On 4.7.74 the government requested that the part of the Commission’s report which covers the fruitgrowing industry be forwarded by 31.10.75.

DAIRY INDUSTRY— What assistance should be provided after 30 June 1976 to the Dairy Industry and for what period of time should any recommended assistance be provided.

The reference requires the Commission to report by 8.10.75.

ASSISTANCE TO NEW' LAND FARMS IN WESTERN AUSTRALIA— 1. What assistance should be provided to ‘new land farms’ in Western Australia which may be signilicantly affected by the ending of the Phosphate Fertilizer Bounty at the end of December 1974 and for

what period of time should any recommended assistance be provided. 2. Specify for the purpose of Ihis reference that ‘new land farms’ means farms in the agricultural area of Western Australia allocated under Crown lease after 1 April 1959 which have been recently cleared

or are still being developed to full production.

3. If assistance in purchasing phosphatic fertilizers is recommended, the Commission should advise on the consequences of any assistance being made on a maximum tonnage of fertiliser basis and on what that tonnage should be.

Year ended 30 June 1978—- 75% of concession to apply Year ended 30 June 1979—■ 50% of concession to apply Year ended 30 June 1980— 25% of concession to apply Beyond 1 July 1980, no special taxation concessions should

apply to the gold-mining industry; (b) at any time in the interim period (1 July 1975 to 30 June 1980) a gold producer may elect to be treated as a general miner for taxation purposes. Such an election should be irreversible; (3) there should be no differentiation for taxation purposes between

the small gold prospector and prospectors for other minerals; (4) gold in the form of ore, amalgam, concentrate and bullion under sub-items 26.01.9, 28.49.9, 71.07.2 and 71.07.9 be subject to minimum rates of duty. The Commission also invited attention to the suggestion contained in the

report relating to the private sale of gold.

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

REPORT SIGNED 21.5.75 The Commission recommended that the Australian Government: (1) initiate discussions with the Western Australian Government on terms, conditions and financing of re-establishment assistance to

new land farmers who wish to leave their properties, (2) review with the Western Australian Government the administration by the Rural Reconstruction Authority of the States Grants (Rural Reconstruction A ct) 1971 in order to provide adequate coverage of

new land farms which are substantially undeveloped. (3) examine with the Western Australian Government, the Reserve Bank of Australia and the Commonwealth Development Bank the most appropriate method of restructuring the existing debt, and of

structuring the future borrowings of new land farmers so as to correspond more closely with the term appropriate for farm development.

Attention was drawn to the suggestions and observations in the conclusions section of the report.

TABLE 4 .2 .2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

22. 4.74 AEROSPACE INDUSTRY— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

1. What assistance should be accorded the design, development, produc­ tion and maintenance in Australia of:

(a) Gliders, aeroplanes, helicopters and other goods which fall within item 88.01, 88.02, 88.03, 88.04 or 88.05 of the First Schedule to the Customs Tariff 1966-1973; (b) Guided air weapons and missiles including parts therefor, which

fall within sub-item 93.07.9 of the First Schedule to the Customs Tariff 1966'-1973; (c) Propulsion systems for goods specified in sub-paragraph 1 (a) or 1 (b) above, including parts therefor, which fall within

sub-item 84.06.9 or 84.08.9 of the First Schedule to the Customs Tariff 1966-1973;

2. In conducting its inquiry and presenting its report the Industries Assistance Commission should have regard to the desire of the Government that the Commission be free to take evidence on, and, if considered necessary, to make recommendations on—

(a) Mechanical hydraulic, electrical, electro-mechanical and elec­ tronic equipment used in the goods specified above; and (b) Any other product it considers relevant to its inquiry under this reference.

3. If the Commission’s recommendations would involve any restructuring of the industry the Commission should indicate the most appropriate manner in which this could be achieved while noting that because of the severe effects of the declining defence work load, the Government

may need to consider taking action which could lead to some restruc­ turing of that part of the industry of particular concern to the Defence Services before the Commission’s inquiry is completed.

4. What assistance would be necessary to maintain an Australian aircraft industry capable of providing to the Defence Forces the following levels of local involvement for the goods described in paragraph 1: (a) repair, overhaul and incorporation! of modifications,

(b) as (a) plus support in the manufacture of spares, (c) as (b) plus design, development and manufacture of selected goods and the way in which this assistance might be provided.

The reference requires the Commission to report by 22.10.75.

PETROLEUM AND MINING INDUSTRIES—TAXATION TREATMENT, ETC.— What has been the effect of taxation concessions and royalties on the development and efficiency of the petroleum and mining industries in Australia; whether the Australian Government should accord assistance by way of

differential taxation treatment, for the petroleum and mining industries in Australia. REFERENCE TO TEXTILES AUTHORITY—CERTAIN ITEMS OF APPAREL— (a) whether the importation of items of apparel of a kind falling

within sub-item 60.04.6, 60.05.1, 60.05.2, items 61.02, 61.03 and 61.04 in the First Schedule to the Customs Tctrffi 1966-1973 is causing market disruption as defined in the GATT Arrangement Regarding International Trade in Textiles. (b) if it is found that exports of any or all of such products from

particular sources are causing market disruption in accord with that definition: (i) should restraint measures be negotiated for any or all of such exports in terms of the Arrangement.

(ii) If so— (a) what should be the level of restraint measures to be negotiated in respect of the products concerned for each source of market disruption; (b) if restraint measures are proposed for more than one

year what should be the level of restraint measures for each year for which such restraints are proposed; (c) should interim action be taken to introduce restraint measures while negotiations are taking place in accord

with the terms of the Arrangement; and if so, what should be the level of such restraint measures and against which sources of market disruption should such action be taken. The reference required the Commission to report on these questions as

soon as possible but within 60 days.

NITROGENOUS FERTILIZER SUBSIDY— Whether the Australian Government should pay a subsidy on manufac­ tured nitrogenous substances used as a fertilizer and if so: (a) what should be the amount and duration of the subsidy;

(b) what would be the consequences of any assistance being provided on the basis of maximum tonnage of fertilizer used and what that tonnage should be.

PUBLIC HEARING NOT COMPLETED

REPORT SIGNED 5.7.74 The Textiles Authority found that:

(1) Imports of the following goods are causing market disruption as defined in the GATT Textiles Arrangement: . knitted men’s and boys’ shirts (item 60.04.6—all statistical keys); . knitted coats, jumpers, cardigans, sweaters, blouses, shirts and

the like (item 60.05.1—all statistical keys); . knitted dresses (ex item 60.05.3—statistical keys 30, 74); . knitted tracksuits, playsuits, rompersuits (ex item 60.05.2—

statistical keys 41, 52, 85, 96); . women’s and girls’ dresses of woven fabric (ex item 61.02.1— statistical keys 39, 44, 55, 66, 35, 46); . coats of woven fabric (item 61.02.2—all statistical keys); . blouses of woven fabric (ex item 61 02.3—statistical keys 13,

24); . women’s, girls’ and infants’ shirts of woven fabric (item 61.04.3). (2) Imports of the other goods under reference, as listed below, are not causing market disruption:

. items of apparel falling within item 60.05.2 other than dresses, tracksuits, playsuits and rompersuits; . items of apparel falling within item 61 02 other than dresses, not being infants’ dresses, coats and blouses; . men’s and boys’ undergarments falling within item 61.03; . women’s, girls’ and infants’ undergarments falling within item

61 04 other than shirts. The Textiles Authority recommended that restraint measures should be negotiated for exports of all items of apparel listed in (1) above. (The Authority’s recommendations regarding the levels of restraints, their

duration, growth factors, and the question of interim action were sub­ mitted confidentially).

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

The reference requires the Commission to report by 7.9.75.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

24. 6.74 PHARMACEUTICAL AND VETERINARY PRODUCTS— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON (a) whether the Australian Government should accord assistance for the production in Australia of— (i) pharmaceutical products and other goods which fall within

items 29.38, 29.39, 29.41, 29.42, 29.44, 30.01 and 30.02, sub-items 30.03.1, 30.03.2, 30.03.3, 30.03.4, 30.03.5, 30.03.6 and 30.03.9 and item 30.05, of the First Schedule to the Customs Tariff 1966-1973; and (ii) goods, which fall within sub-item 38.19.9 of the First

Schedule to the Customs Tariff 1966-1973 being goods the essential character of which is derived from the goods referred to in (i) above; and (b) if so, what should be the nature and extent of the assistance. This reference superseded the previous reference on Pharmaceutical

Products, etc., forwarded to the Tariff Board on 13 December 1973.

24. 7.74 MEASURING, CHECKING, PRECISION INSTRUMENTS AND APPARATUS, ETC; PROGRAMMED FOR PUBLIC HEARING CLOCKS AND WATCHES, ETC.—

Whether the Australian Government should accord assistance for the production in Australia of instruments, apparatus and equipment, and other goods, and parts and accessories therefor, which fall within—

(a) sub-item 90.01.1, 90.01.2, 90.01.4 or 90.01.9; (b) item 90.02; (c) item 90.05; .

(d) item 90.06; (e) sub-item 90.07.1 except cameras and parts therefor of a type used within the graphic arts industries for the production of line, continuous tone and half-tone images from reflection or transparent

copy;

(f) sub-item 90.08.1 or 90.08.2; (g) sub-item 90.09.1; (h) item 90.11; (i) item 90.12;

(j) sub-item 90.13.1, 90.13.2, 90.13.3 or 90.13.9; (k) sub-item 90.14.1 or 90.14.9; (l) item 90.15;

(o) item 90.18; (ρ) sub-item 90.19.1 except hearing aids and parts therefor, 90.19.2 or 90.19.3; (q) item 90.21;

(r) item 90.22; (s) item 90.23; (t) sub-item 90.24.1 or 90.24.2, paragraph 90.24.91, 90.24.92, 90.24.93, 90.24.94, 90.24.96 or 90.24.99;

(u) item 90.25; (v) sub-item 90.26.1 or 90.26.2; (w) sub-item 90.27.1 or 90.27.9; (x) sub-item 90.28.1, paragraph 90.28.21, 90.28.22, 90.28.23,

90.28.24 or 90 28.25, sub-paragraph 90.28.261, 90.28.263, 90.28.264, 90.28.265, 90.28.267, 90.28.268 or 90.28.269, paragraph 90.28.27 or 90.28.28, sub-item 90.28.3, sub-paragraph 90.28.912 or 90.28.919 or paragraph 90.28.99; (y) item 90.29 except parts and accessories designed solely or

principally for goods of a kind which fall within sub-item 90.26.3, 90.27.2 or 90.27.3; or (z) an item falling within Chapter 91, of the First Schedule to the Customs Tariff 1966-1973 and, if so, what should be the nature and extent of the assistance.

ANIMAL FOODS— Whether the Australian Government should accord assistance for the production in Australia of goods falling within Chapter 23 of Schedule 1 to the Customs Tariff 1966-1973 and, if so found, the nature and

extent of such assistance.

ALMONDS (BY-LAW) — (a) whether the following goods should be prescribed by a by-law or specified in a determination for the purposes of Item 19 in Schedule 2 to the Customs Tariff 1966-1973:

almonds to which sub-item 08.05.2 and paragraph 20.06.21 in Schedule 1 to the Customs Tariff 1966-1973 applies; and (a) if so found, subject to what conditions, if any, should Item 49 apply to those goods.

In conducting its inquiry and preparing its report on this reference the Commission should also consider whether or not other goods should be regarded as substitutes.

PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

REPORT SIGNED 7.2.75 The Commission recommended that on and from 1 March 1975 by-law admission be accorded almonds to which sub-item 08.05.2 of the Customs Tariff applies subject to the conditions set out in section 6

of the report. The Commission also recommended that almonds to which paragraph 20.06.21 of the Customs Tariff applies should not be accorded by-law admission.

The reference required the Commission to report by 19.2.75.

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

16. 8.74 STRESS RELIEVED STRAND WIRE CABLE (BY-LAW)--- REPORT SIGNED 10.1.75

(a) whether the following goods should continue to be prescribed by a by-law or specified in a determination for the purposes of Item 19 in Schedule 2 to the Customs Tariff 1966-1973: stress relieved strand wire cable, to which Item 73.25 in

Schedule 1 of the Customs Tariff 1966-1973 applies, of a kind used in prestressed concrete; and (b) if so found, subject to what conditions, if any, should Item 19 apply to those goods.

The reference required the Commission to report by 19.2.75.

The Commission recommended that: . Elstrand, a 19 wire stress relieved wire strand of a kind used in

prestressed concrete, be prescribed for admission under Item 19 in Schedule 2 to the Customs Tariff. . other stress relieved wire strand, of a kind used in prestressed

concrete, not be prescribed for admission under Item 19 in Schedule 2 to the Customs Tariff.

16. 8.74 INSULATED ANNEALED COPPER STRIP (BY-LAW)— REFERENCE WITHDRAWN— 25.9.74

(a) whether the following goods should continue to be prescribed by a by-law or specified in a determination for the purposes of Item 19 in Schedule 2 to the Customs Tariff 1966-1973:

polyester enamel insulated annealed copper strip, max. thermal rating 180°C vinyl acetal base enamel insulated annealed copper strip, max. thermal rating 120°C; and (b) if so found, subject to what conditions, if any, should Item 19

apply to those goods.

16. 8.74 OLIVE OIL (BY-LAW) REFERENCE WITHDRAWN— 11.10.74

(a) whether the following goods should continue to be prescribed by a by-law or specified in a determination for the purposes of Item 19 in Schedule 2 to the Customs Tariff 1966-1973: olive oil to which sub-item 15.07.2 in Schedule 1 to the

Customs Tariff 1966-1973 applies; and (b) if so found, subject to what conditions, if any, should Item 19 apply to those goods

8.74 tomatoes; tomato paste, etc (by-law) — (a) whether the following goods should be prescribed by a by-law or specified in a determination for the purposes of item 19 in Schedule 2 to the Customs Tariff 1966-1973:

(i) tomatoes to which sub-item 20.02.6 in Schedule 1 to the Customs Tariff 1966-1973 applies; and (ii) tomato paste, pulp or puree to which sub-item 20.02.1 in Schedule 1 to the Customs Tariff 1966-1973; and (b) if so found, subject to what conditions, if any, should item

19 apply to those goods. In conducting its inquiry and preparing its report the Commission was to also consider in respect of those goods in paragraph 1 (a) (i) of the reference whether or not other goods should be regarded as

suitable alternatives.

POLYESTER YARN FOR USE IN THE MANUFACTURE OF AUTOMOTIVE SEAT BELT WEBBING (BY-LAW) —

(a) whether the following goods should be prescribed by a by-law or specified in a determination for the purpose of item 19 in

Schedule 2 to the Customs Tariff 1966-1973: 1100 decitex raw continuous filament polyester yam to which sub-item 51.01.9 in Schedule 1 of the Customs Tariff 1966-1973 applies, for use in the · manufacture of automotive seat belt webbing; and (b) if so found, subject to what conditions, if any, should item 19

apply to those goods.

REPORT SIGNED 13.11.74

The Commission recommended that in a local production shortfall and when the landed duty paid price of the imported product in greater than a price established by the Department for a comparable local product, canners and food manufacturers should be permitted to import the goods under reference under by-law for the purposes of item 19 in

Schedule 2 to the Customs Tariff provided that: . the landed cost of imports under by-law are equated with an estab­ lished local price. This could be achieved by the duty free admission of that portion of each shipment, (the balance being subject to the

full substantive duty) as is necessary to arrive at a composite landed into store cost over the whole importation equal to the established local price; and . conditions to prevent stockpiling of the goods are imposed. Attention was drawn to the Board’s suggestions in section 4 of the report

concerning: . the extension of by-law concession to organisations other than canners and food manufacturers if the above arrangements fail to provide for total local requirements; and . the possible administration of its recommendations.

The Commission did not consider that other goods should be regarded as suitable alternatives to tomatoes to which sub-item 20.02.6 in Schedule 1 to the Customs Tariff 1966-1973 applies.

REPORT SIGNED 18.11.74 The Commission recommended that by-law admission be accorded imports of 1100 decitex raw continuous filament polyester yarn to which sub-item 51.01.9 applies for use in the manufacture of automotive seat belt

webbing provided that they were either cleared for home consumption between January 1 1974 and 23 October 1974 or on order covered by irrevocable letter of credit established before 23 October 1974.

Attention was also invited to the suggestion that there be a shortfall by-law for a period of one month after supplies of merge 301 yarn being made available for testing by the using industry, and that the concession be then reviewed by the Department of Customs and Excise.

The reference required the Commission to report by 19.11.74.

The reference required the Commission to report by 19.11.74.

HEAT TRANSFER PRINTING PAPER (BY-LAW)—

(a) whether the following goods should be prescribed by a by-law or specified in a determination for the purposes of item 19 in Schedule 2 to the Customs Tariff 1966-1973:

heat transfer printing paper to which item 49.08 in Schedule 1 to the Customs Tariff applies; and

REPORT SIGNED 13.2.75

The Commission recommended that by-law admission be not accorded imports of the goods under reference.

TABLE 4.2.2—continued

Japan, Hong Kong, the United States of America, Taiwan

(b) if it is found that exports of any or all of such products from particular sources are causing market disruption in accord with that definition: (i) should restraint measures be negotiated for any or all of

such exports in terms of the Arrangement; (ii) if so— (a) what should be the level of restraint measures to be negotiated in respect of the products concerned for

each source of market disruption; (b) if restraint measures are proposed for more than one year what should be the level of restraint measures for each year for which such restraints are proposed; (c) should interim action be taken to introduce restraint

measures while negotiations are taking place in accord with the terms of the Arrangement; and if so, what should be the level of such restraint

measures and against which sources of market dis­ ruption should such action be taken.

The reference required the Commission to report on these questions as soon as possible but within1 60 days.

knitted fabrics of— . acetate "1

. acrylic }■

. polyamide J

■ polyester

falling within item 60.01.99, stat­ istical codes 770, 781, 84X, 850, 792, 861, 930, 941, 952, 963, 974, 985, 996, 1004 towels falling within item 62.02.6, statistical codes 51, 62, 73, 84 and

95

Japan, the United States ot America, Britain

Japan, the United States of America

Hong Kong, People’s Republic of China, the United States of America, Japan and Canada;

2. in each case exports be restrained in the first year to a total level equivalent to 100 per cent of total imports from each of the specified countries during the 12 months ended 30 June 1973; 3. in each case the restraint measures continue for a period of two years; 4. the restraint measures be relaxed to permit an increase in exports of

6 per cent in the second year for all of the goods from all countries for which restraint arrangements have been recommended; and 5. provided prompt action can be taken to negotiate restraint arrange­ ments as recommended no interim action should be taken to introduce

restraint measures. The Authority invited attention to its suggestions concerning:

(a) alternative measures to restrict imports in the event that recom­ mended restraint arrangements cannot be achieved without undue delay;

(b) action to limit imports of clothing; and to the suggestion that a watch be kept on imports of certain products from certain countries.

SOAPS AND DETERGENTS— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON

(a) whether the Australian Government should accord assistance to the production in Australia of:

(i) fatty acids and acid oils from refining which fall within sub-item 15.10.1, 15.10.2 or 15.10.9 of Schedule 1 to ’the Customs Tariff 1966-1973; (ii) glycerol and glycerol lyes which fall within item 15.11 of

Schedule 1 to the Customs Tariff 1966-1973; (iii) aliphatic acids containing not less than 8 and not more than 22 carbon atoms, and their salts, which fall within sub-item 29.14.1 of Schedule 1 to the Customs Tariff 1966-1973;

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

11. 9.74 soaps and detergents—c o n tin u e d

(iv) soap, surface-active products or agents and other goods that fall within item 34.01 or 34.02 of Schedule 1 to the

C u s to m s T a r iff 1966-1973;

(v) scouring powders and other goods that fall within sub-item 34.05.2 or 34.05.9 of Schedule 1 to the C u s to m s T a riff

1966-1973; and (vi) goods that by virtue of a Substitutes and Imitations Notice made pursuant to Section 23 of the C u s to m s T a r iff 1966­ 1973 are to be dutiable at the rate of duty applicable to

goods to which sub-item 34.02.1 or 34.02.9 of Schedule 1 to the C u s to m s T a r iff 1966-1973 applies; and (b) if so, what should be the nature and extent of the assistance.

The reference requires the Commission to report by 11.6.76.

20. 9.74 RAILWAY AND TRAMWAY LOCOMOTIVES, ROLLING STOCK, ETC.— PROGRAMMED FOR PUBLIC HEARING

Whether assistance should be accorded the production in Australia of railway and tramway locomotives, rolling stock and other goods which fall within items 86.01, 86.02, 86.03, 86.04, 86.05, 86.06, 86.07, 86.09 and 86.10 of the First Schedule to the C u s to m s T a r iff 1966-1973

and if so, the nature and extent of such assistance.

The reference requires the Commission to report by 31.3.76.

26. 9.74 COMPUTER DISC PACKS AND COMPUTER DISC CARTRIDGES— PUBLIC HEARING COMPLETED BUT NOT REPORTED ON Whether assistance should be accorded the production in Australia of computer disc packs and computer disc cartridges falling within sub­ item 92.12.1 of Schedule 1 to the C u s to m s T a r iff 1966-1973 as pro­

posed to be altered; and if so, the nature and extent of such assistance.

6.10.74 ASSISTANCE TO THE PERFORMING ARTS—

Whether assistance should be accorded the performing arts in Australia and if so what should be the nature and extent of such assistance.

For the purpose of the reference performing arts are to be deemed to include live performances of ballet, dance, opera, music, drama, music hall, vaudeville, puppetry and the like.

In conducting its inquiry and presenting its report, the Commission is to have regard to the desire of the Government that the Commission be free to take evidence and if considered necessary, to make recommen­ dations on any other matter it considers relevant to its inquiry under

this reference.

The reference requires the Commission to report by 30.6.76.

8.10.74 SECOND-HAND RAILWAY LOCOMOTIVES— Whether, pending the report of the Commission on the reference of 20 September 1974 on railway and tramway locomotives, rolling stock etc., production of railway locomotives in Australia should be assisted

against competition from imports of second-hand railway locomotives and, if so, the nature and extent of such assistance.

The reference required the Commission to report by 28.2.75.

REPORT SIGNED 20.2.75 The Commission recommended that no assistance in addition to the existing rates of duty (including primage) be afforded the production of loco­ motives against imports of second-hand locomotives.

Attention was invited to the Commission’s comments concerning the imposition of import controls and the entry under by-law of imported second-hand locomotives.

18.10.74 FOOTWEAR— PUBLIC HEARING NOT COMPLETED

Whether the importation into Australia of footwear and parts therefor of a kind falling within items 64.01, 64.02, 64.03, 64.04 and 64.05 of Schedule I to the Customs Tariff 1966-1973 as proposed to be altered_should be prohibited or restricted; and Whether assistance should be given the production in Australia of

footwear and parts therefor of a kind falling within items 64.01, 64.02, 64.03, 64.04 and 64.05 of Schedule 1 to the Customs Tariff 1966-1973 as proposed to be altered and, if so, the nature and extent of such assistance;

The reference requires the Commission to report by 30.4.76. A later request requires the Commission to make an interim report by 3.11.75.

23.10.74 TOURIST ACCOMMODATION INDUSTRY— NOT PROGRAMMED FOR PUBLIC HEARING Whether assistance, other than assistance by way of taxation measures, should be accorded the tourist accommodation industry and if so, the nature and extent of such assistance.

TABLE 4.2.2—continued

Dale of reference Terms of reference Stage of inquiry at 30 June 1975

15.11.74 REFERENCE TO TEXTILES AUTHORITY—TEXTILE APPAREL (SHIRTS, ETC.) — continued (c) if it is found that restraint measures that may be recommended in accord with the terms of the GATT Textiles Arrangement are

unlikely to overcome the market disruption what other measures, if any, should be taken to overcome the disruption.

The reference required the Commission to report within 45 days in respect of shirts falling within sub-item 60.04.1 shirts and shirt fronts falling within sub-item 61.03.1 and pyjamas and other nightwear falling within sub-item 61.03.2 in Schedule 1 to the Customs Tariff

1966-1973 and within 75 days in respect of other goods.

27.11.74 IRON AND STEEL INDUSTRY— Whether the Australian Government should accord assistance to the production in Australia of goods falling within items 73.01 to 73.16 of Schedule 1 to the Customs Tariff 1966-1973 and, if so found, the

nature and extent of such assistance.

The reference requires the Commission to make an interim report on goods falling within item 73.15 of Schedule 1 of the Customs Tariff 1966-1973. A later request limits this requirement to alloy steels not being low alloy steels.

PROGRAMMED FOR PUBLIC HEARING

4.12.74 CERTAIN DISCONTINUOUS MAN-MADE TOWELS AND TOWELLING— FIBRE YARNS; KNITTED FABRICS; NOT PROGRAMMED FOR PUBLIC HEARING Whether the Australian Government should accord assistance to the

production in Australia of goods of a kind falling within the following items or parts of items in Schedule 1 to the Customs Tariff 1966-1973, as proposed to be amended: 55.08, 56.05.2, 56.05.3, 60.01.1, 60.01.99, 60.05.2, 62.02.6;

and if so, the nature and extent of such assistance.

The reference requires the Commission to report by 31.7.76.

6.12.74 REFERENCE TO TEXTILES AUTHORITY—CERTAIN TEXTILE FLOOR COVERINGS— (a) whether the importation of floor coverings of a kind falling within sub-item 58.02.9 and item 59.02 ini Schedule 1 to the

REFERENCE SUPERSEDED BY REFERENCE ON CERTAIN TEXTILE FLOOR COVERINGS, DATED 12.12.74

Customs Tariff 1966-1973, as proposed to be altered, is causing market disruption as described in the GATT Arrangement Regard­ ing International Trade in Textiles. (b) If it is found that exports of any or all of such products from particular sources are causing market disruption as described in the Arrangement:

(i) should restraint measures be negotiated for any or all of such exports in terms of the Arrangement; (ii) If so— (a) what should be the level of restraint measures to be

negotiated in respect of the products concerned for each source of market disruption; (b) if restraint measures are proposed for more than one year what should be the level of restraint measures

for each year for which such restraints are proposed; (c) should interim action be taken to introduce restraint measures while negotiations are taking place in

accord with the terms of the Arrangement; and if so, what should be the level of such restraint measures and against which sources of market disruption should such action be taken. (c) What other measures, if any, should be taken to overcome the

disruption in the event that relevant measures recommended by the Textiles Authority in accordance with the terms of the GATT Textiles Arrangement either cannot be negotiated or if negotiated are found inadequate to overcome the market disruption.

RURAL INCOME FLUCTUATIONS— CERTAIN TAXATION MEASURES—

Whether, in terms of the reference of 29 October 1974, measures should be taken through the income'tax system: (a) by means of tax averaging provisions; and/or (b) income equalisation deposits to reduce fluctuations in the

incomes of rural producers; and

If so, the nature and extent of such measures.

The reference required the Commission to report by 30.6.75 as an interim report under the reference, of 29.10.74, on assistance to reduce fluctua­ tions in the incomes of rural producers. (See above)

REPORT SIGNED 30.6.75 The Commission recommended that: (1) The existing tax-averaging system be retained for primary producers. (2) The $16,000 limit on incomes eligible for averaging be abolished as

from the 1974-75 income year. (3) Transition provisions comparable with those provided in 1966 be implemented for the removal of the $16,000 limit. (4) An Income Equalisation Deposits Scheme be implemented with

interest payable on the investment component of the deposit, and that the existing Drought Bonds Scheme be discontinued. The Commission considered that measures should be taken to inform farmers and their accountants on the use of the provisional tax system particularly the self-assessment provisions, and on the use of Income Equalisation Deposits. Although not included in the terms of reference the Commission invited the Government to consider making tax averaging and Income Equalisation Deposits available to all individual taxpayers.

GAS FIRED INSTANTANEOUS WATER HEATERS (BY-LAW) — (a) whether the following goods should be prescribed by a by-law or specified in a determination for the purposes of item 19 in Schedule II to the Customs Tariff 1966-1974:

gas fired instantaneous water heaters to which sub-paragraph 84.17.611 in Schedule I to the Customs Tariff 1966-1974; and (b) if so found, subject to what conditions, if any, should item 19 apply to those goods.

The reference required the Commission to report by 1.7.75.

DYELINE BASE PAPER (BY-LAW)— (a) whether the following goods should be prescribed by a by-law or specified in a determination for the purposes of sub-item 48.01.1 in Schedule 1 to the Customs Tariff 19661974:

dyeline base paper to which paragraph 48.01.22 in Schedule 1 to the Customs Tariff 1966-1974 applies; and (b) if so found, subject to what conditions, if any, should sub-item 48.01.1 apply to those goods.

The reference required the Commission to report by 1.7.75.

TYRES— Whether the Australian Government should accord assistance to the production in Australia of tyres of a kind falling within item 40.11 of Schedule 1 to the Customs Tariff 19661974, as proposed to be

amended, and if so found, the nature and extent of such assistance.

1 June 1975 .. .. .. 4.0

1 July 1975 .. .. .. 4.0

1 August 1975 .. .. .. 4.0

1 September 1975 .. .. 5.0

1 October 1975 .. .. . . 5.0

1 November 1975 .. .. 5.0

1 December 1975 .. .. 6.0

1 January 1976 .. .. .. 6.0

1 February 1976 .. .. .. 6.0

(b) imports in excess of quota be subject to an additional duty of $10 per square metre.

The Authority invited attention to suggestions made in Section 10 of the report.

REPORT SIGNED 2.6.75 The Commission recommended that, except as specified in the following paragraph, the goods under reference should not be prescribed by a by-law nor specified in a determination for the purposes of Item 19 in

Schedule 2 to the Customs Tariff 1966-1974. The Commission recommended that, on an ad hoc basis, the goods under reference should be specified in a determination for the purposes of Item 19 in Schedule 2 to the Customs Tariff 19661974 where the

administering authority is satisfied that such goods are: (a) designed to operate on liquefied petroleum gas or similar fuels; and (b) are intended for permanent installation in caravans, small boats and similar mobile units.

REPORT SIGNED 18.6.75

PROGRAMMED FOR PUBLIC HEARING

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

29. 1.75 FINANCING RURAL RESEARCH— PUBLIC HEARING NOT COMPLETED

Whether funds should be provided, or continue to be provided by the Australian Government to finance, or assist in financing, rural research and, if so: (a) what should be the nature and extent of the assistance provided,

or continue to be provided, by the Australian Government; (b) what criteria should be used in determining and apportioning research expenditure.

For the purpose of this reference rural research includes research into fisheries.

The reference requires the Commission to report by 30.6.76.

29. 1.75 ASSISTANCE FOR THE CONSUMPTION OF PHOSPHATIC FERTILIZERS— PUBLIC HEARING NOT COMPLETED

Whether, to give effect to the objectives in Section 22 (1) of the

Industries Assistance Commission Act 1973, the Australian Government should provide assistance for the consumption of phosphatic fertilizers, and if so:

(a) what should be the rate and duration of such assistance; and (b) what should be the basis of . any payment including considera­ tions of the end use, the point of payment, the phosphate content and the consequences of the amount of assistance being

limited to a maximum tonnage.

The reference requires the Commission to report by 31.7.76.

The reference also requires the Commission to make an interim report by 31.7.75, on whether in the present circumstances interim assistance should be provided for the consumption of phosphatic fertilizers pending receipt of the Commission’s report on the reference.

14. 2.75 REFERENCE TO TEXTILES AUTHORITY— MAN-MADE FIBRE BAGS AND SACKS—

(a) whether the importation of sacks and bags of a kind falling within sub-item 62.03.1 of Schedule 1 to the Customs Tariff 1966-1974 as proposed to be altered, is causing market disruption as described in the GATT Arrangement Regarding International Trade in Textiles.

REPORT SIGNED 3 1 .3 .7 5 The Textiles Authority recommended that in respect of sacks and bags falling within sub-item 62,03.1 of the Customs Tariff: (a) quantitative export restraint measures be negotiated under the

GATT Textiles Arrangement with the Philippines, the Republic of Korea, Hong Kong and Japan for a period of two years;

(b) if it is found that exports of any or all of such products from particular sources are causing market disruption as described in the Arrangement: (i) should restraint measures be negotiated for any or all of

such exports in terms of the Arrangement; (ii) if so— (a) what should be the level of restraint measures to be negotiated in respect of the products concerned for

each source of market disruption; (b) if restraint measures are proposed for more than one year what should be the level of restraint measures for each year for which such restraints are proposed; (c) should interim action be taken to introduce restraint

measures while negotiations are taking place in accord with the terms of the Arrangement; and if so, what should be the level of such restraint measures and

against which sources of market disruption should such action be taken, (c) if it is found that restraint measures that may be recommended in accord with the terms of the GATT Textiles Arrangement are

unlikely to overcome the market disruption what other measures, if any, should be taken to overcome the disruption.

The reference required the Commission to report by 31.3.75.

reference to textiles authority—certain yarns and textile PRODUCTS— (a) whether the importation of goods of a kind falling within the following items or parts of items in the First Schedule to the

Customs Tariff 1966-1974 is causing market disruption as described in the GATT Arrangement Regarding International Trade in Textiles: 50.09.1, 51.04.1, 51.04.3, 53 11.2, 53.11.9, 55.05.912,

55 05 913, 55.05 919, 55.05.912, 55.05.929, 55.06.9, 55.09.1, 55.09.3, 55.09.522, 55.09.529, 55 09.59; in respect of fabrics 132 cm or more in width that are printed or

have a raised nap and if not printed or if not having a raised nap would fall within: 55.09.52, 55.09.62, 55.09.69, 55.09.7, 55.09.99, 56.05.9, 56.07.2, 56.07 3, 58.05.11; in respect of elastomeric fabrics;

55 05.31, 58 06, 58.07.1, 58 10, 59.13.1, 59.13.2, 59.13.9,

(b) appropriate interim action be taken to prevent significant increases in imports from any source until these measures can be imple­ mented; (c) quantitative restrictions be imposed as soon as is practicable on

imports from Taiwan for a period of two years so as to limit imports to 4 million sacks and bags in the first year of operation of the restrictions; and (d) the restraints and restrictions referred to in (a) and (c) be

administered under arrangements which ensure that the rate of imports of sacks and bags for all purposes does not exceed 9 million per annum in the first year of operation of both the

restraints and restrictions and 10.8 million in the second year except, in each year, by the quantities in excess of 6 million which are required for the purpose of containing goods for export from Australia. The Textiles Authority invited attention to the comments in the Conclu­

sions to the report relating to an alternative course of action.

report signed 30.4.75

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

20. 2.75 REFERENCE TO TEXTILES AUTHORITY—CERTAIN YARNS AND TEXTILE products— continued

in respect of blankets, rugs and curtains; 60.06.1, 60.06.2, 62.01 and 62.02.1; in respect of goods other than blinds. (b) if it is found that exports of any or all of such products from

particular sources are causing market disruption as described in the Arrangement: (i) should restraint measures be negotiated for any or all of such exports in terms of the Arrangement;

(ii) if so— (a) what should be the level of restraint measures to be negotiated in respect of the products concerned for each source of market disruption;

(b) if restraint measures are proposed for more than one year what should be the level of restraint measures for each year for which such restraints are proposed; (c) should interim action be taken to introduce restraint

measures while negotiations are taking place in accord with the terms of the Arrangement; and if so, what should be the level of such restraint measures and against which sources of market disruption should such action be taken.

(c) if it is found that restraint measures that may be recommended in accord with the terms of the GATT Textiles Arrangement are unlikely to overcome the market disruption what other measures, if any, should be taken to overcome the disruption.

The reference required the Commission to report by 21.4.75.

6. 3.75 REFERENCE TO TEXTILES AUTHORITY— KNITWEAR AND OTHER ITEMS OF REPORT SIGNED 22.4.75 APPAREL—

(a) whether the importation of goods of a kind falling within the following parts of items in Schedule 1 to the Customs Tariff 1966-1974 as proposed to be altered is continuing to cause market disruption as described in the GATT Arrangement Regarding

International Trade in Textiles:

60.05.19 in respect of knitted coats, jumpers, cardigans, sweaters, shirts, blouses, dresses, tracksuits, rompersuits, play- suits and like garments, 61.02.1, 61.02.2, 61.02.4, 61.04.3 in respect of shirts. (b) if it is found that exports of any or all of such products from

particular sources are causing or are continuing to cause market disruption as described in the Arrangement, a n d having regard to the recommendations made on these products by

the Textiles Authority in its report of 5 July 1974, and the action taken by the Government in respect of those recommendations, in order to overcome the market disruption— (i) what should be the total level of imports that should be

authorised for such products for the financial year 1975-76; (ii) should restraint measures be renewed or negotiated in terms of the Arrangement for the financial year 1975-76 for any or

all of such products and with what particular sources of supply; (iii) should any other action be taken in the financial year 1975-76, in association with such restraint measures, for

any or all of such products in relation to particular sources of supply; (c) if it is found that action in terms of (b) (ii) and (iii) above is

unlikely to overcome the market disruption what other measures, if any, should be taken to overcome the disruption.

The reference required the Commission to report by 21.4.75.

SHEETS AND PLATES OF IRON OR STEEL—

Whether the importation of the following goods should be restricted: (i) hot rolled sheets and 'plates of iron or steel not exceeding 3.2 mm in thickness of a kind falling within sub-item 73.13.1; and (ii) cold rolled sheets and plates of iron or steel of a kind falling

within sub-item 73.13.1 of Schedule 1 to the Customs Tariff 1966-1974 as proposed to be altered.

DOMESTIC REFRIGERATING APPLIANCES, AIR CONDITIONERS, WASHING MACHINES AND CLOTHES DRYERS—

(a) whether assistance be provided by the Australian Government to the industry producing the following goods being electrical goods of a kind commonly used for domestic purposes: refrigerators, freezing units and clothes drying machines, clothes

washing machines and combinations thereof, air conditioning

TABLE 4.2.2—continued

Date of reference Terms of reference Stage of inquiry at 30 June 1975

11. 3.75 DOMESTIC REFRIGERATING APPLIANCES, AIR CONDITIONING, WASHING machines and clothes dryers— continued

machines and evaporative air coolers of a kind designed primarily for use without ducting, which, if imported, would fall within items 84.12 or 85.06, sub-items 84.15.2 or 84.15.9, paragraphs 84.40.71, 84.40.79 or 84.59.92 in Schedule 1 of the Customs

Tariff 1966-1974, as proposed to be altered, and if so, the nature and extent of such assistance. (b) whether the duty arrangements of the kind recommended by the Temporary Assistance authority should apply after 29 February

1976 to the following goods, being electrical goods of a kind commonly used for domestic purposes: refrigerators with a gross internal capacity of 200 litres or more, domestic clothes drying machines, clothes washing machines and

combinations thereof, to which sub-items 84.15.2, 84.15.9 or 84.40.7 in Schedule 1 to the Customs Tariff 1966-1974, as proposed to be altered, apply.

The reference requires the Commission to report by 31.12.75 on (b) above.

21. 4.75 MONOCHROME TELEVISION RECEIVERS AND CERTAIN COMPONENTS— NOT PROGRAMMED FOR PUBLIC HEARING

Whether assistance should be accorded to the production in Australia of— (a) Monochrome television reception apparatus incorporating or designed for use with a cathode-ray picture tube having a cross­

sectional dimension exceeding 41 centimetres including such goods incorporating radio broadcasting receivers, sound recorders or reproducers, but not including, when imported

separately, channel tuners or parts of channel tuners, being apparatus of a kind falling within sub-item 85.15.1; (b) Monochrome cathode-ray picture tubes having a cross-sectional dimension exceeding 41 centimetres, being tubes of a kind

falling within sub-item 85.21.9; (c) Loudspeakers of a kind falling within sub-item 85.14.9; or (d) Fixed electrical capacitors that are of the following types: . electrolytic;

. paper, metallised paper; . plastic, metallised plastic;

being capacitors of a kind falling within sub-item 85.18.9 of Schedule 1 of the Customs Tariff 1966-1974, as proposed to be altered, and if so, the nature and extent of such assistance.

MULTILATERAL TRADE NEGOTIATIONS—GENERAL RATES OF DUTY REVIEW—

Having regard to: (a) the decision of the Australian Government to participate on a basis of reciprocity in the Multilateral Trade Negotiations initiated by the Ministerial Declaration of September, 1973 at Tokyo; (b) the fact that the conclusion of such negotiations may involve the

granting by Australia of tariff reductions; (c) the fact that the resulting General Tariff rates may be bound against future increase; and (d) the fact that reductions in tariffs could be phased in over a

period of time:

(i) for goods of a kind specified in the Customs Tariff 1966­ 1974, as altered or proposed to be altered, to which a British preferential margin is accorded in that Tariff, can that margin be:

(a) reduced and, if so, to what extent, or (b) eliminated,

by establishing a reduced General Tariff rate for goods of that kind, without generally adverse employment or structural effects?

(ii) consistent with the guidelines set out in Section 22 of the Industries Assistance Commission Act 1973, what scope is there for elimination of those General Tariff rates which do not exceed 10 per cent ad valorem (or the equivalent in

terms of specific rate tariffs), including the removal of any primage duty applicable?

(iii) taking account of the form of general approach to tariff negotiations as may be agreed by other participants in the MTNs, what scope is there for Australia to accord further General Tariff reductions, including the removal of any

primage duty applicable, consistent with the guidelines set out in Section 22 of the Industries Assistance Commission Act 1973? (iv) over what time span could such reductions be phased, in order to minimise, so far as practicable, any adverse employment or structural effects?

Text of letter from Chairman to Prime Minister concerning supplementary recommendations

26 November 1974

The Hon. E. G. Whitlam, Q.C., M.P., Prime Minister,

Parliament House,

Canberra, A.C.T. 2600

Dear Prime Minister,

I refer to my letter of 18 November and to your

reply, which was delivered to my home on Sunday night.

The Commission has examined the eleven reports on which the Government has not yet announced a decision, and has identified five as requiring supple­ mentary recommendations on the grounds outlined in my letter of 18 November. These are:

Woven Man-Made Fibre Fabrics, 17 January 1974 Glass and Glassware, 23 May 1974 Polyamide and Polyester Yarns, 18 June 1974 Tyre Cord and Tyre Cord Fabrics, 25 June 1974

Foundation Garments, 28 June 1974

The areas covered by each report to which -the supple­ mentary recommendations should, in the Commission’s opinion, apply in the short term—and the levels of duty (including Primage) which should apply—are set out in the attachment to this letter.

The Commission’s supplementary recommendations are intended to apply to the specific areas in each report where the implementation of its original recommendations may have adverse short -term effects on employment. In assessing the possibility of such effects, the Commission has taken account, not only of -the data available at the time of the reports, but

also of more recent changes in -the level of imports.

In those cases where it considers there is even a slight chance of a report having adverse short term effects on employment, the Commission has made supplementary recommendations. It has done this

because it believes that, as far as is possible, its recommendations should not add to any existing unemployment in the industries concerned.

The Commission recommends that, in relation to the tariff items (or part of items) listed in the attachment, the rates of duty applying before 19 July 1973 should, with some minor rationalisations, be the basis for the supplementary assistance. In the case of flat glass it has also recommended that Developing Country

preferences should not apply to imports from the Philippines and the Republic of Korea. It further recommends that its supplementary recommendations should apply until 30 November 1975. Before that date, the Commission will advise you concerning its views on their possible continuance. I

I am writing a seperate letter to you today, on the general matters raised in your letter of 21 November.

Yours sincerely,

G. A. RATTIGAN

178

TABLE 4.2.3: STAGE OF COMPLETION AND ACTION TAKEN ON REFERENCES BETWEEN 1 OCTOBER 1974 AND 30 SEPTEMBER 1975(a)

Reference

Date of Specified

reference date(d)

Aluminium powders and paste (Dumping and Subsidies Act) . . . . . . 27.10.69

Aluminium pastes, powders or flakes . . . . . . . . . . 8.1.70

Aluminium ami articles thereof . . . . . . . . . . . 4.5.71

Copper f o i l ...............................................................................................................................................11.5.72

Primary shapes produced hy rolling, drawing, extruding of non-ferrous metal . . . 6.11.72

Tanned and finished leather; dressed fur . . . . . . . . . .

Leather and leather substitute products . . . . . . . . . .

Hosiery . . . . . . . . . . . . . . .

Miscellaneous industrial machinery . . . . . . . . . .

Pumps and compressors . . . . . . . . . . . .

I leclronic and electrical equipment^/)— · B Radio and television broadcasting and transmitting apparatus and radio remote control apparatus . . . . . . . . . . . . . .

6.11.72 6.11.72 6.11.72 6.11.72

6.11.72

7.12.72

D Telephone and telegraph equipment 7.12.72

7.12.72 7.12.72 7.12.72 7.12.72

7.12.72 7.12.72 7.12.72 7.12.72

7.12.72 23.3.73 3.7.73 23.7.73 23.10.73 23.10.73

13.12.73 13.12.73 13.12.73 13.12.73

Position at 30 September 1975

Report signed 22.8.75 Report signed 22.8.75 Report signed 22.8.75 Unsigned draft report released for public

comment and supplementary public hearing completed Unsigned draft report released for public comment and supplementary public

hearing completed Report signed 24.4.75 Report signed 10.6.75 Public hearing completed Public hearing not completed(c) Public hearing completed

Unsigned draft report released for public comment Unsigned draft report released for public comment Public hearing completed Public hearing completed

Public hearing completed Report signed 27.8.75 Public hearing completed Public hearing completed Public hearing completed Public hearing completed Public hearing completed Public hearing completed Not programmed for public hearing Report signed 11.4.75 Public hearing not completed Public hearing completed Public hearing completed Public hearing completed Not programmed for public hearing Report signed 30.5.75

Internal combustion piston engines (including diesel marine engines), etc.(e) Superphosphate . . . . . . . . . . .

Fabricated asbestos, etc. . . . . . . . . .

Mushrooms . . . . . . . . . . . .

Bovine brucellosis and tuberculosis slaughter compensation scheme . . Apple and pear industry . . . . . . . . .

Dried vine fruits industry . . . . . . . . .

Financing promotion of rural products . . . . . . .

Production of gold . . . . . . . . . .

Rural reconstruction . . . . . . . . . .

Dairy industry . . . . . . . . . . .

Assistance to new land farms in Western Australia . . . . .

Aerospace industry . . . . . . . . . .

Petroleum and mining industries—Taxation treatment, etc. . . . Nitrogenous fertilizer subsidy . . . . . . . .

Pharmaceutical and veterinary products . . . . . . .

Measuring, checking, precision instruments and apparatus, etc.; clocks and watches, etc Animal foods, etc. . . . . . . . . . .

Almonds (by-law) . . . . . . . . . .

Stress relieved strand wire cable (by-law) . . . . . .

Tomatoes; tomato paste, etc. (by-law) . . . . . . .

Polyester yarn lor use in the manufacture of automotive seat belt webbing (by-law) Heat transfer printing paper (by-law) . . . . . . .

Agricutural tractors . . . . . . . . . .

Cellulose acetate flake . . . . . . . . . .

Reference to Textiles Authority—Certain yarns, knitted fabrics, towels and towel Soap and other detergents, etc. . . . . . . . .

Railway and tramway locomotives, rolling stock, etc. . . . .

Computer disc packs and computer disc cartridges . . . . .

Assistance to the performing arts . . . . . . . .

Second-hand railway locomotives . . . . . . . .

Footwear . . . . . . . . . . . .

Assistance to tourist accommodation industry . . . . .

Rural income fluctuations . . . . . . . . .

Acetyl products . . . . . . . . . . .

Reference to Textiles Authority—Textile apparel . . . . .

Iron and steel industry . . . . . . . . . .

Certain discontinuous man-made fibre yarns; knitted fabrics; towels and towelling Rural income fluctuations—Certain taxation measures . . . .

Reference to Textiles Authority—Certain textile floor coverings . . . Gas-fired instantaneous water heaters (by-law) . . . . .

Dyeline base paper (by-law) . . . . . . . . .

Tyres . . . . . . . . . . . . .

Financing rural research . . . . . . . . .

Assistance for the consumption of phosphatic fertilisers . . . .

Reference to Textiles Authority—Man-made fibre bags and sacks . . Reference to Textiles Authority—Certain yams and textile products . . Reference to Textiles Authority—Knitwear and other items of apparel . Sheets and plates of iron or steel . . . . . . . .

Domestic refrigerating appliances, air-conditioners, washing machines and clothes Monochrome television receivers and certain components . . . Multilateral trade negotiations—General rates of duty review . . .

dryers

11.2.74 28.2.74 1.3.74 8.3.74

11.3.74 11.4.75

11.3.74 (/)(g)31.10.75(1) 11.3.74 (/X *)31.10.75(1) 5.4.74 5.7.76

8.4.74 8.6.75

8.4.74 (/)(g)31.10.75(1) 8.4.74 10.4.74 22.4.74

2.5.74 7.6.74 24.6.74 24.7.74

14.8.74 16.8.74 16.8.74 16.8.74

16.8.74 20.8.74 30.8.74 30.8.74

11.9.74 11.9.74 20.9.74 26.9.74

6.10.74 8.10.74 18.10.74 23.10.74 29.10.74

14.11.74 15.11.74 27.11.74 4.12.74

6.12.74 12.12.74 21.12.74 23.12.74

14.1.75 29.1.75 29.1.75 14.2.75 20.2.75

6.3.75 7.3.75 11.3.75 21.4.75

3 0 . 5 .7 5

8.10.75

22.10.75

7.9.75

19.2.75 19.2.75 19.11.74 19.11.74

2.3.75 31.3.76 31.1.76 10.11.74

11.6.76 31.3.76

30.6.76 28.2.75

(/)(A)3.11.75(1) (/)3 0 .1 1.75(1)

31.7.76

(/)(A:)30.6.75(1) 7.2.75 1.7.75 1.7.75

30.6.76

(/)(/)3 1.7.75(1) 31.3.75 (m) 30.4.75

21.4.75

(n) 31.12.75

(e) Report signed 21.8.75 Report signed 9.4.75 Report signed 10.12.74 Report signed 10.4.75 Public hearing completed

Public hearing completed Public hearing completed Report signed 6.6.75 Public hearing completed

Public hearing completed Report signed 21.5.75 Public hearing completed Public hearing completed

Report signed 5.9.75 Public hearing completed Public hearing not completed Public hearing completed Report signed 7.2.75

Report signed 10.1.75 Report signed 13.11.74 Report signed 18.11.74 Report signed 13.2.75 Public hearing completed

Programmed for public hearing Report signed 10.11.74 Public hearing completed Public hearing completed

Public hearing completed Public hearing not completed Report signed 20.2.75 Public hearing completed

Programmed for public hearing Not programmed for public hearing Programmed for public hearing Reports signed 24.12.74, 29.1.75

Public hearing not completedO) Not programmed for public hearing Report signed 30.6.75 Report signed 7.2.75

Report signed 2.6.75 Report signed 18.6.75 Programmed for public hearing Public hearing completed

Interim report signed 31.7.75 Report signed 31.3.75 Report signed 30.4.75 Report signed 22.4.75

Public hearing completed Programmed for public hearing Not programmed for public hearing Public hearing not completedO*)

T A B L E 4 . 2 . . ! —continued

Reference

Date of Specified

reference date(A) Position at 30 September 1975

Potatoes and processed potato products Motor vehicles—Import restrictions . The publishing industry . . .

The beef cattle industry . . .

Fisheries and fish processing industry . Sacks and bags . . . . .

Copper ore and concentrates . .

9.7.75 9.7.75 20.7.75 22.7.75

6.8.75 18.8.75 17.9.75

Not programmed for public hearing 31.10.75 Public hearing completed Not programmed for public hearing 20.10.75 Report signed 30.9.75

Not programmed for public bearing Not programmed for public hearing 15.11.75 Not programmed for public hearing

(a) excludes references subsequently withdrawn or superseded. (b) Date by which Commission is required to report. (e) All public hearings for this reference have been completed except for those concerned with the Ball and Roller Bearings part of the reference.

on 27.9.73. (i) This reference has been divided into two parts: the report on Diesel Engines exceeding 1500 kW had a specified report date of 11.8.74 and was signed on 5.7.74. The remainder has not yet been reported on. The public hearing has been completed. (/H I) Indicates that an interim report must be completed by this date. (a) The Commission has been requested to make an interim report on certain aspects of the Apple and Pear Industry, the Dried Vine Fruits Industry and the Fruitgrowing

Reconstruction Scheme by 31.10.75 and to make its final reports on the Apple and Pear Industry, the Dried Vine Fruits Industry and Rural Reconstruction by 31.12.75. (A) The final report for Footwear is required by 31.4.76. (/) This reference was specified in two parts: Shirts, Pyjamas, etc. and Hosiery, Gloves, etc., with specified report dates of 30.12.74 and 3.2.75 respectively. U) An interim report has been requested on part of this reference.

(λ) The report on this matter was requested as an interim report under the reference of 29.10.74 on Rural Income Fluctuations. (/) The final report on assistance for the consumption of Phosphatic Fertilizers is required by 31.7.76. (»>) Hie specified report date was extended on this reference. in) Part of this reference is to be reported on by this date.;

TABLE 4.2.4: REPORTS AND PAPERS PRODUCED B Y THE INDUSTRIES ASSISTANCE COMMISSION DURING 1974-75

Title D ate®

Reports by the Commission on inquiries Passenger m otor vehicles, etc......................................................................................................10.7.74

N itrogenous fertilizers................................................................................................................ 16.7.74

Textile and apparel making machinery, etc; Paper making and printing machinery, etc..........................................................................23.7.74

Glass fibre rovings and chopped strand m a t ....................................................................... 31.7.74

Thermoplastic moulding c o m p o u n d s ..................................................................................2.8 .7 4

Diesel engines exceeding 1 500 k W ..................................................................................5 .8 .7 4

Mattresses, quilts, eiderdowns and c u s h i o n s ....................................................................... 23.8.74

Commercial m otor vehicles, parts and accessories . . . . . . . 17.9.74

Tomatoes, tom ato paste, etc. ( b y - l a w ) ...........................................................................................13.11.74

Polyester yarn for use in the manufacture of automotive seat belt webbing (by-law) . 19,11.74 M u s h r o o m s ................................................................................................................................... 10.12.74

Stress relieved strand wire cable ( b y - l a w ) ....................................................................... 10.1.75

Almonds ( b y - l a w ) .............................................................................................................................7.2.75

Heat transfer printing p a p e r ............................................................................................13.2.75

Second-hand railway locom otives............................................................................................20.2.75

Aluminium and articles thereof, etc. (draft released April 1975) . . . . —·

Fabricated asbestos, etc............................................................................................................................9.4 .7 5

Brucellosis and tuberculosis................................................................................. .......... . 10.4.75

Floor and wall t i l e s ...........................................................................................................................11.4.75

Tanned and finished leather: dressed f u r ..................................................................................24.4.75

New land farms . . . ............................................................................................21.5.75

Cosmetics and toilet p rep aratio n s...................................................................................................... 30.5.75

Gas fired instantaneous water heaters ( b y - l a w ) ............................................................. 2.6 .7 5

Production of g o l d ................................................................................................................6.6.75

Leather and leather substitute products . . . . . . . . . 10.6.75

Copper foil; and primary shapes produced by rolling, drawing, extruding of non-ferrous metal (draft released June 1 9 7 5 ) ................................................................................. —

Superphosphate (draft released June 1 9 7 5 ) ....................................................................... —

Dyeline base paper (by-law )..................................................................................................... 18.6.75

Filament, fluorescent and other discharge lamps (draft released June 1975) . . —

Rural income fluctuations—Certain taxation measures . . . . . . 30.6.75

Other papers by the Commission Implications of the Commission’s approach to the development of industries® . . June 1975

Reports by the Textiles Authority on inquiries Certain items of apparel . . . . . . . . . . . 5.7.74

Yarns, knitted fabrics, and t o w e l l i n g .......................................................................................... 10.11.74

Apparel—Section 1; Men’s shirts, woven pyjamas and other woven nightwear . . 24.12.74 Apparel—Section 2 . . . ..................................................................................29.1.75

Certain textile floor c o v e r i n g s ........................................................................................................ 7.2.75

Bags and sacks of man-made f i b r e ............................................................................................ 29.3.75

Knitwear and other items of a p p a r e l ............................................................................................22.4.75

Certain yarns and textile products . . . . . . . . . 30.4.75

Technical papers(c) The Australian market for passenger motor vehicles . . . . . . July 1974

The demand for nitrogen (An extract from the IAC report: Nitrogenous fertilizers) . July 1974 Clothing . . . . . . . . . . . . . . July 1974

Australian market for ADP e q u ip m e n t................................................................................. November 1974

The dairy industry . . . . . . . . . . . . January 1975

Statistical handbooks Steel pipes and tubes® . . . . . . . . . . . December 1974

Soaps and detergents, etc.® . . . . . . . . . . March 1975

Railways and tramway locomotives, rolling stock, etc.® . . . . . . April 1975

182

TABLE 4.2.4—continued

Title D ate®

Other statistical papers Recent trends in the Australian manufacturing sector( b ) ................................................... April 1975

Nitrogenous f e r t i l i z e r s ( c ) ......................................................................................................September 1974

F o o t w e a r ( c ) ........................................................................................... .......... March 1975

Rates of assistance for selected manufacturing industries in A ustralia® . . . April 1975

(a) D ate of signing for reports by the Commission and Textiles Authority. D ate of release for other papers. (b) Prepared for the Committee to Advise on Policies for Manufacturing Industry. (c) These publications are distributed to libraries and parties known to be interested in an inquiry on the subject of the publication. Publications are m ade available (free of charge) to persons or organisations,

from the office of the Commission in Canberra, Sydney or Melbourne.

183

t a b u : 4 2 5■ CHARACTERISTICS OF MANUFACTURING INDUSTRIES REPORTED ON B Y THE TARIFF BOARD OR INDUSTRIES ASSISTANCE COMMISSION DURING 1973-74 AND 1974-75 ( a ) ___________________________

Report

Date of reference

Date signed

Date

released

Value of output

1973-74: Earthmoving construction and materials handling equip-merit, etc. . . . . . . . . 20.5.71 6.8.73 12.2.74

Brandy . . . . . . . . . 13.10.71 17.8.73 6.12.73

Products of the printing industry . . . . . 28.5.69 21.9.73 4 .1 .7 4

Consumer electronic equipment and components . . 7.12.72 27.9.73 20.11.73

Domestic appliances, heating and cooling equipment, etc. 20.5.71 10.10.73 23.1.74 Fibreboard containers, paper and textile bags . . 6.11.72 23.11.73 17.2.74

Woven man-made fibre fabrics!/) . . . . 14.9.71 17.1.74 4.4.74

Steam, gas and water fittings . . . . . 15.6.72 24.5.74 3.8.74

Industrial tractors . . . . . . . 24.8.72 4.6 .7 4 13.8.74

Gloves, mittens or mitts . . . . . . 17.5.73 11.6.74 6.8.74

Food processing machinery, etc. . . . . . 20.5.71 12.6.74 30.8.74

Polyamide and polyester yarns . . . . .

18.5.721 8.11.72J 18.6.74 10.9.74

Tyre cord and tyre cord fabrics . . . . . 11.10.72 25.6.74 10.9.74

Foundation garm ents!/) . . . . . . 6.11.72 28.6.74 2.10.74

Wood working and metal working machinery, etc.; Gas welding, etc. equipment and electric welding, etc. equip­ ment; Industrial and laboratory furnaces and ovens, etc. 20.5.71 28.6.74 26.9.74 Othcr references/') . . . . . .

1974-75: Passenger motor vehicles, etc. . . . .

Nitrogenous fertilizers . . . . . .

Textile and apparel machinery, etc., and paper making am printing machinery, etc. . . . . .

Diesel engines exceeding 1500 kXV . . .

Mattresses, quilts, eiderdowns and cushions(/) . Commercial motor vehicles . . . . .

Mushrooms . . . . . . .

Second-hand railway locomotives!») . . .

Fabricated asbestos, etc. . . . . .

Floor and wall tiles . . . . . .

Tanned and finished leather: dressed fu r(/) . . Leather and leather substitute products(/) . . Cosmetics and toilet preparations!-/ ) . . .

28.8.73 10.7.74 11.7.74

6.3.72 16.7.74 28.11.74

20.5.71 23.7.74 12.11.74

11.2.74 5.8.74 25.10.74

13.12.73 23.8.74 12.11.74

7.11.72 17.9.74 31.10.74

8.3.74 10.12.74 20.1.75

8.10.74 20.2.75 22.4.75

1.3.74 9.4.75 15.5.75

23.7.73 11.4.75 15.5.75

6.11.72 24.4.75 20.6.75

6.11.72 10.6.75 6.8.75

13.12.73 30.5.75 10.7.75

$m

115 5

351 190 400 250

68 16 7 1

4

n.a.

13 46

46 170

1 148 (m)41

10 1

36

(k)149 8 17 n.a.

11 55 53 111

Total manufacturing sector!») 26 373

Value Employ- Funds Imports(c)

added ment(6) employed (f.o.b.)

$m ’000 $m $m

n.a. 10 79 52

4 n.a. 11 1

211 (rf)49 (0120 61

60 12 88 60

230 30 250 45

100 13 n.a. 1

29 4 40 n.a.

6 2 9 5

3 1 n.a. 24

(g) (§·) n.a. 2

3 1 n.a. 4

n.a. 3 45 26

5 1 10 n.a.

24 4 n.a. m

25 4 30 17

n.a. 14 n.a. 68

0)460 74 (0)778 (0325

n.a. 1 107 2

n.a. 1 6 63

ω (g) 4 n.a. 14 2 n.a. ω n.a. 11 (0)130 (03257 1 n.a. 3n.a. n.a. n.a. ω n.a. n.a. n.a. 39 1 11 1521 3 n.a. 725 4 n.a. 1661 5 1 710 746 1 248 1 303 3 684

n.a. Not available. (a) Most of the data shown in this table were derived from submissions to the Tariff Board or the Commission during the course of inquiries into the industries shown. The data were supplemented in some cases by information from the ABS. Note that some of the figures shown are approximate only, being based on data from only some of the firms in the industry. In addition, the data are not all for the same period: data for reports signed during 1974-75 mostly

relate to 1972-73. Some of the reports listed in the table appeared in a similar table in the Commission’s 1974 annual report. Some of the figures for these reports have been revised in the table above, as additional information became available. Reports by the Commission on by-laws, dumping and NZAFTA matters, and reports by the Textiles Authority, have not been included in the table. (b) Estimates of employment on production of goods under reference only; not necessarily total industry employment. (c) Imports of goods under reference. (d) Includes employment on the production of printed matter not under reference.

(e) Total understated: significant data unobtainable. ( / ) This reference corresponds closely to class(es) in the Australian Standard Industrial Classification (ASIC). The statistics of turnover, value added and employment have been derived from the 1972-73 Manufacturing Census conducted by the ABS and relate to the entire ASIC class(es). Funds employed and imports have been estimated by the Industries Assistance Commission for the goods under reference.

(g ) Less than Sim (or 1,000 persons). (Λ) Includes imports of partly completed brassieres. (/') Comprises data from reports on Cigarette Paper (signed 25.10.73), Propylene Oxide Derivatives (28.12.73), Paper (12.2.74), Calcium Carbide (18.4.74) and Glass and Glassware (23.5.74). Some of the information specified in the table is confidential for these reports individually.

(;') In LDF terms. (A) Applies only to manufacturers who submitted evidence. (!) Import figure for both passenger and commercial m otor vehicles. (m) Estimate for ‘basic’ nitrogenous fertilizers, excluding NP, and N PK mixtures and compounds.

(//) Data relates to local production of new railway locomotives. (o) ABS data for the whole manufacturing sector for 1972-73.

TABLE 4.2.5—continued

APPENDIX 4.3: PROFITABILITY AND CAPITAL STRUCTURE OF AUSTRALIAN MANUFACTURING INDUSTRY

1. An annual survey of the profitability and capital structure of the Australian manufactur­ ing sector was instituted by the Tariff Board in 1968, and continued by the Commission when it was established in 1974. The procedures followed this year were the same as in previous years. Certain qualifications regarding the use

of the survey results must be restated.

2. Accounting ratios based on aggregate results of the participating enterprises are historical indicators of industry performance and do not constitute standards for any one firm within an industry. The average ratios have a purpose only when examining broad

industry aggregates and their trends over time.

3. The response rate by manufacturers was again very good this year representing approxi­ mately 90 per cent of total sales of the manu­ facturing sector. However, the results for two industries are affected by lack of data from two large manufacturers: (i) a large manu­ facturer with diverse activities, was unable to provide separate data for the Raw and Refined Sugar industry and was therefore excluded from the survey, (ii) One large manufacturer in the Beverages and Malt industry did not co-operate. The trend from year to year will not be affected as both companies were also excluded in previous years.

4. The results of the Petroleum Refining, Petroleum and Coal Products industry are sub­ ject to an additional qualification. This arises because the operations of some companies in this industry do not allow data for the manu­

facturing process to be separated from other activities, and other companies manufacture on a commission basis.

RESULTS 5. The results of the survey are set out in Tables 4.3.1 to 4.3.5. The industry classifica­ tion used is the same as that used last year (Table 4.3.6.)

DEFINITIONS AND EXPLANATIONS Concentration estimates 6. Concentration estimates have been made in Table 4.3.1 of each of the forty-two indus­

tries comprising the manufacturing sector on the basis of both sales and funds employed. These measures are calculated on the basis of the same sample and for the same industry classification as the other measures of pro­

fitability and capital structure. The esti­ mates show the proportion of sales and

funds employed for the top five and top ten firms in each industry. Although the ABS has produced some concentration statistics for 1968-69, the Commission pre­

sents its own estimates on the same basis as in previous years for the sake of continuity. It should also be noted that ABS figures are based on turnover which is conceptually differ­

ent from sales; and the ABS figures are col­ lected by ‘establishment’, while the figures in this survey are collected by ‘firm’.

Profitability ratios 7. Operating profit: net profit before tax plus interest paid on borrowed money less income from outside investments and less profit derived from other than manufacturing activities (for example from the sale of fixed assets).

8. Net profits: net profit after tax, interest paid and including income from investments.

Capital structure ratios 9. Funds employed: net fixed assets plus working capital, being current trade assets less short term trade liabilities (not including

bank overdraft or other borrowed money used in the business). Sources of funds are paid-up capital, borrowed money and other sources such as undistributed profits and reserves. Hence, the following add to 100 per cent: paid-up capital to funds employed; borrowed money to funds employed; balance of funds to funds employed.

10. Funds are employed either as working capital or fixed assets. Consequently the ratio of each to total funds employed must together add to 100 per cent.

Sales ratios 11. · Total cost: sales less operating profit • Cash flow: net profit plus depreciation

186

• Stocks on hand: raw materials, work in progress and finished goods • Sales to funds employed: this is a

ratio and not a percentage. It indicates the number of times funds employed were turned over during the year

Quartile and median analysis 12. To determine the quartiles used in Table 4.3.4, the applicable ratio for example, operat­ ing profit to funds employed) was calculated for each manufacturer in the constant group

within a particular industry.1 The resulting ratios were then arranged in ascending order of magnitude. The quartile measures Q l, M and Q3 are the three ratios that divide the

distribution into four groups of equal numbers of firms.

International comparison 13. As in previous years a comparison of profitability, capital structure and sales ratios between the Australian and the United States

manufacturing sectors is given (Table 4.3.5).

14. -This year the United States data exclude the activities of branches and subsidiaries operating outside that country. This brings the United States definition of the manufacturing

sector much closer to the Australian definition. The source for the United States data is the Quarterly Financial Report by Manufactur­ ing Corporations (various editions) published

jointly by the United States Federal Trade Commission and the Securities and Exchange Commission. The Commission draws attention to reservations expressed in Tariff Board

annual reports about the usefulness of inter­ country comparisons. The main value of such comparisons lies in the analysis of trends.

Interpretation of results 15. Table 4.3.2 shows trends in various com­ monly used financial ratios for the whole manufacturing sector over the past eleven years. The profitability ratios for 1973-74

showed a slight decline from the previous year. In 1973-74, the ratios of operating profit to funds employed for 28 industries were higher than the sector average.

lFor full details see Tariff Board Annual Report, 1972-73, p. 11.

16. A comparison of results by industry, shown in Table 4.3.3, with sector averages in Table 4.3.2 indicates that several of the larger industries had ratios of operating profit to funds employed below the sector average.

However, two of the largest industries (Basic Metal Products and Motor Vehicles, Bodies, Trailers and Caravans), while still having ratios below the sector average, showed significant

increases over the 1972-73 result.2

17. The Tobacco Products industry showed a significant rise in profitability to become the second most profitable industry for 1973-74, after the Soap and Other Detergents industry.

The Cosmetics and Toilet Preparations indus­ try, which was the leader in profitability last year, declined to third position in 1973-74.

18. Reflecting the downturn in meat markets, the operating profit to funds employed ratio of the Meat Products industry has shown a considerable decline. Other industries with

significant falls from the 1972-73 figures in operating profit to funds employed included Footwear, Wooden Products and Joinery, Furniture and Mattresses and Photographic, Professional and Scientific Equipment. As the

Meat Products industry as a whole showed a net loss, no dividends paid to net profit ratio is given.

19. The quartile and median analysis for the firms comprising the constant group are set out in Table 4.3.4. Three industries (Meat Pro­ ducts, Petroleum Refining, Petroleum and Coal

Products and Other Transport Equipment) showed a negative result for the ratio of operating profit to funds employed (implying a loss) at the first quartile. The negative result

of the first quartile together with a low median and third quartile results further reflects the general decline in profitability of the Meat Products industry. The highest third quartile

result achieved was 59.3 per cent by a manu­ facturer of Margarine, Oils and Fats nec. The Tobacco Products industry again contained too few participants to enable a median/quartile analysis to be undertaken.

T h e increase for Motor Vehicles, Bodies, Trailers and Caravans would be due in part to the exclusion of financial data for Leyland Motor Corporation in 1973-74.

187

TABLE 4 .3 .1 : CONCENTRATION, PROFITABILITY AN D SALES: MANUFACTURING SECTOR— 1973-74

Percentage of

Percentage of total industry funds Operating

to ta l industry sales em ployed profit as a

percentage o f funds em ployed

R atio o f sales to funds employed

Largest 5 firms

L argest 10 firm s

L argest 5 firm s

Largest 10 firms

F ood, Beverages and T obacco M eat p roducts . . . . 38 55 . 35 51 . 3. 0 2.97

M ilk p ro d u cts . . . . . 58 71 63 73 9. 8 3.24

F ru it a n d vegetable products , . 53 74 50 77 9 .4 1.69

M argarine, oils an d fats nec . . 86 97 94 99 19.2 2.39

F lo u r an d bread products . . 52 71 54 74 9 .0 2 .6 7

R aw an d refined sugar . . . 90 100 93 100 2 0 .3 1.76

Confectionery an d cocoa products . 83 94 86 97 11.5 1.61

F o o d p roducts nec . . . . 57 72 55 74 14.4 2.17

Beverages an d m alt . . . . 47 68 53 70 13.3 1.01

T obacco p ro d u cts . . . . 100 100 100 100 2 8 .3 1.33

T extiles Textiles, yarns a n d w oven fabrics . 43 58 49 64 10.2 1.74

R ope, cordage an d twine . . . 97 100 98 100 13.8 1.31

F lo o r coverings an d o ther textile

p ro d u cts . . . . . 39 55 47 62 14.9 1.81

C lothing and F ootwear K nitting m ills an d clothing . . 14 23 19 30 17.3 2.71

F ootw ear . . . „ , 47 64 54 70 16.8 3.15

W ood, W ood P roducts and F urniture T im ber m illing, veneers and boards . 29 42 36 50 22.1 1.84

W ooden p roducts and joinery . . 37 47 51 60 14.1 2.05

F u rn itu re an d m attresses . . . 24 31 41 50 16.9 2.71

P aper and P aper P roducts, P r in tin g Paper an d p a p e r products . . 66 8 4 76 89 13.7 1.32

P rinting an d publishing . . . 31 4 7 36 51 18.4 2.00

C hemical, P etroleum and C oal P roducts Basic chem icals . . . . 57 74 66 8 0 1 3 . 1 1 . 1 9

P aints . . . . . . 83 92 82 94 13.8 1.87

P harm aceutical an d veterinary products 31 49 42 60 17.6 1.73

Soap and o ther detergents . . 71 90 68 89 31.2 3.06

' Cosm etics an d toilet preparations . 70 87 75 90 26.7 1.94

O ther chem ical an d related products . 57 79 55 79 24.5 1.94

Petroleum refining, petroleum an d coal products . . . . . 80 94 86 98 8 .5 1.08

Ν ον-metallic M ineral Products G lass and glass products . . . 93 . 100 97 100 7 .8

Sfi

1 ,.01

Clay p r o d u c t s ............................................ 53 70 54 73 8 .7 0.98

Cem ent, concrete and o th er products . 55. 68 56 76 15.5 1.66

B asic M etal P roducts . . . 63 82 81 92 10.1 0.81

F abricated M etal P roducts . . 26 40 32 48 14.6 1.76

T ransport E quipm ent M o to r vehicles, bodies, trailers and caravans ............................................ 84 94 87 96 8 .9 2.29

M otor vehicle instrum ents, p arts and accessories . . . . . 61 72 67 78 15.8 1.65

O t h e r tran sp o rt equipm ent . . 58 77 67 82 9 .7 3.17

O ther M achinery and Equipment P hotographic, professional an d scien-tific equipm ent . . . . . 77 ' 86 81 88 15.2 1.70

A ppliances and electrical equipm ent . 27 40 35 48 11.6 2.04

Industrial m achinery and equipm ent . 11 16 13 18 14.5 1.70

M iscellaneous M anufacturing L eather a n d leather products . . 33 45 42 54 12.7 2.31

R ubber products . . . . 73 92 80 95 7. 0 1.51

Plastic and related products . . 45 57 53 65 16.5 1.59

O ther m anufacturing . . . 28 39 33 46 19.3 2.09

For explanations and definitions refer to paragraphs 6 to 12 of Appendix 4.3.

188

TABLE 4.3.2: PRO FITABILITY, CAPITAL STRU C TU RE A N D SA L E S R A TIO S: M ANU FACTU RING SECTO R— 1963-64 TO 1973-74

(Per cent)

Ratios 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed 11.7 Operating profit/Sales . . 7.8

N et profit/Sales . . . 4 .2

Net profit/Paid-up capital . 16.5

Net profit/Shareholders’ funds . 7.8

Dividends paid/Net profit . 55.1

Dividends paid/Paid-up capital . 9.1

C apital Structure Paid-up capital/Funds employed 38.4 Borrowed money/Funds em­ ployed . . . . 21.7

Balance of funds/Funds employed 39.9 Working capital/Funds employed 36.6 Fixed assets/Funds employed . 63.4

Sales Total costs/Sales . . . 92.2

Depreciation/Sales . . . 3.-3

Cash flow/Sales . . . 7 .6

Working capital/Sales . . 24.4

Stock on hand/Sales . . 20.2

Trade debtors/Sales . . . 13.2

Sales/Funds employed . . 1.50

11.5 10.2 10.6 11.4 12.6

7.6 7.1 7.3 7.8 8.4

4.0 3.8 4.0 4.2 4.7

16.4 15.1 16.1 18.8 21.6

7.5 6.6 7.0 7.7 9.5

55.1 56.5 55.3 53.1 49.3

9.0 8.5 8.9 10.0 10.6

36.8 36.3 35.8 32.7 32.9

23.0 22.4 23.3 24.1 30.3

40.2 41.3 40.9 43.2 36.8

37.3 37.1 36.3 36.1 35.4

62.7 62.9 63.7 63.9 64.6

92.4 92.9 92.7 92.2 91.6

3.5 3.4 3.4 3.6 3.4

7.5 7.2 7.3 7.8 8.1

24.9 25.6 25.0 24.5 23.4

21.0 21.0 20.5 19.7 20.1

13.0 13.8 13.6 13.8 14.9

1.50 1.45 1.45 1.47 1.51

13.0 12.1 11.5 13.0 12.6

8.4 7.8 7.5 8.0 8.0

4.5 4.3 4.2 4.7 4.1

22.2 22.7 21.9 27.4 24.7

9.6 9.6 9.0 11.1 9.5

53.1 51.9 53.5 49.1 48.7

11.8 11.8 11.7 13.5 12.0

31.7 29.4 29.3 27.7 26.1

30.7 33.9 35.3 35.8 36.5

37.6 36.7 35.4 36.5 37.4

36.9 38.2 36.4 38.0 40.7

63.1 61.8 63.6 62.0 59.3

91.6 92.2 92.5 92.0 92.0

3.4 3.2 3.4 3.3 3.0

7.9 7.5 7.7 8.0 7.1

23.9 24.5 23.9 23.4 25.7

20.8 20.9 20.4 19.0 23.0

16.4 17.0 17.7 18.6 18.9

1.54 1.56 1.52 1.62 1.58

For explanations and definitions refer to paragraphs 6 to 12 of Appendix 4.3.

TA BLE 4 .3 .3 : P RO F ITA BILITY, CAPITAL A N D S A L E S RATIO S: M ANU FACTU RING SECTO R— A V E R A G E S FOR E A C H IN D U S T R Y — 1971-72 TO 1973-74 (Per cent)

Meat products Milk products Fruit and vegetable products Margarine, oils and fats n.e.c.

Ratios 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability O perating profit/F unds em ployed O perating profit/Sales . .

N e t profit/Sales . . .

N e t profit/P aid-up capital .

N e t profit/S hareholders’ funds . D ividends p aid /N et profit .

D ividends p aid/P aid-up c a p ita l.

g Capital Structure Paid-up cap ital/F u n d s em ployed Borrow ed m oney/F unds em ployed . . . .

B alance o f funds/F unds em ployed . . . .

W orking capital/F unds em ployed Fixed assets/Funds em ployed .

Sales T otal costs/Sales . . .

D epreciation/Sales . . .

C ash flow/Sales . . .

W orking capital/Sales . .

Stock on hand/Sales . .

T rade d eb to rs/S ales. . .

Sales/Funds em ployed . .

13.9 14.1 3.0 14.3

3.8 4.4 1.0 4.9

2.1 2.3 - 0 .3 2.4

28.7 28.3 - 3 .8 21.4

15.1 15.3 - 2 .1 9.0

27.5 29.0 63.4

7.9 8.2 7.4 13.5

26.8 25.7 25.3 32.9

45.9 48.9 56.6 31.2

27.3 25.4 18.1 35.9

40.4 35.6 34.8 27.4

59.6 64.4 65.2 72.6

96.2 95.6 99.0 95.1

1.1 1.2 1.3 2.5

3.2 3.5 1.0 4.9

11.0 11.0 11.7 9.3

10.8 10.5 8.4 10.3

6.8 7.7 9.8 9.3

3.65 3.23 2.97 2.95

12.5 9.8 10.4 10.2

4.5 3.0 6.2 6.0

2.3 1.7 2.8 3.4

21.9 16.4 14.5 18.0

9.1 7.1 8.0 9.5

57.8 70.7 71.7 45.2

12.6 11.6 10.4 8.1

29.8 32.8 32.2 31.8

31.4 32.8 44.0 44.3

38.8 34.4 23.8 23.9

32.2 29.1 52.3 57.0

67.8 70.9 47.7 43.0

95.5 97.0 93.8 94.0

2.1 2.2 2.0 1.7

4.4 3.9 4.8 5.1

11.5 9.0 31.1 33.6

10.0 8.9 25.7 23.0

12.4 11.9 18.6 22.5

2.80 3.24 1.68 1.70

9.4 8.0 16.4 19.2

5.6 4.2 7.8 8.0

2.8 2.5 5.1 5.4

17.1 28.1 46.0 63.4

8.3 7.8 18.1 31.1

54.5 52.6 38.4 27.0

9.3 14.8 17.7 17.1

27.6 17.3 23.4 20.3

46.3 48.9 42.3 56.1

26.1 33.8 34.3 23.6

56.9 38.3 40.4 47.6

43.1 61.7 59.6 52.4

94.4 95.8 92.2 92.0

1.6 1.6 1.6 1.3

4.4 4.1 6.7 6.7

33.6 20.0 19.1 19.9

29.4 16.3 18.3 24.4

21.5 15.1 22.1 16.7

1.69 1.92 2.11 2.39

TABLE 4.3.3—continued

Flour and bread Raw and refined Confectionery and

products sugar cocoa products Food products n.e.c.

R atios 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed . . . 13.3 12.9

Operating profit/Sales . . 5.6 5.2

Net profit/Sales . . . 2.6 2.5

Net profit/Paid-up capital . 16.9 17.3

Net profit/Shareholders’ funds . 10.5 9.6

Dividends paid/Net profit . 47.9 39.5

Dividends paid/Paid-up capital 8.1 6.8

apital Structure

Paid-up capital/Funds employed Borrowed money/Funds 36.6 36.2

employed . . . .

Balance of funds/Funds

46.8 46.4

employed . . . .

Working capital/Funds

16.6 17.4

employed . . . . 27.3 29.6

Fixed assets/Funds employed . 72.7 70.4

XLES Total costs/Sales . . . 92.4 94.8

Depreciation/Sales . . . 2.4 2.5

Cash flow/Sales . . . 5.0 5.0

Working capital/Sales . . 11.4 11.9

Stock on hand/Sales . . 11.8 11.2

Trade debtors/Sales . . 13.4 13.5

Sales/Funds employed . . 2.39 2.49

9.0 25.6 19.6 20.3 15.3

3.4 14.2 14.1 11.6 9.8

1.4 8.0 8.4 6.5 4.7

9.8 36.3 36.7 32.9 25.1

5.6 12.3 11.7 11.5 11.5

80.9 42.1 47.1 56.2 55.7

7.9 15.3 17.3 18.5 14.0

37.4 39.8 31.8 34.4 29.4

48.5 15.8 9.1 . 9.2 31.4

14.1 44.4 59.1 56.4 39.2

33.1 15.4 12.2 13.0 39.1

66.9 84.6 87.8 87.0 60.9

96.6 85.8 85.9 88.4 90.2

1.9 3.3 3.3 2.7 2.7

3.3 11.3 11.7 9.2 7.4

12.4 8.6 8.7 7.4 25.0

15.7 2.3 3.6 2.9 23.6

16.0 24.7 17.0 14.3 17.6

2.67 1.80 1.39 1.76 1.56

14.7 11.5 9.2 9.9 14.4

9.5 7.2 3.4 4.3 6.6

4.3 2.2 1.2 2.6 3.3

19.5 11.2 7.3 30.1 41.9

9.7 5.4 3.9 11.2 14.2

57.9 66.4 149.4 84.5 61.9

11.3 7.4 10.8 25.4 26.0

34.3 31.1 43.3 19.9 16.9

29.2 36.6 27.2 52.1 48.5

36.5 32.3 29.5 28.0 33.6

36.6 63.4

48.1 51.9

40.5 59.5

46.9 53.1

47.7 52.3

90.5 92.8 96.7 95.7 93.4

2.5 2.3 2.4 1.8 1.3

6.8 4.5 3.6 4.4 4.6

23.6 29.9 14.9 20.5 22.0

22.5 29.4 13.8 15.0 18.0

17.9 14.5 15.3 17.2 18.7

1.55 1.16 2.72 2.29 2.17

TABLE 4.3.3—continued

Ratios

Profitability Operating profit/Funds employed . . . .

Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up capital . Net profit/Shareholders’ funds . Dividends paid/Net profit . Dividends paid/Paid-up capital

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed . . . .

Balance of funds/Funds employed . . . .

Working capital/Funds employed . . . .

Fixed assets/Funds employed .

Sales Total costs/Sales . .

Depreciation/Sales . . Cash flow/Sales . .

Working capital/Sales . Stock on hand/Sales . Trade debtors/Sales . Sales/Funds employed . .

Beverages and malt

1971-72 1972-73 1973-74

16.5 16.0 13.3

15.8 16.8 13.2

8.3 9.0 6.5

26.8 23.4 21.8

10.9 10.4 8.9

51.7 49.3 50.4

13.9 11.5 11.0

32.7 36.5 30.0

21.6 16.9 22.3

45.7 46.6 47.7

25.4 24.6 26.9

74.6 75.4 73.1

84.2 83.2 86.8

3.4 3.7 3.7

11.7 12.7 10.2

24.3 25.9 26.7

17.1 22.6 23.0

19.6 20.1 20.3

1.05 0.95 1.0C

Tobacco products

-72 1972-73 1973-74

30.6 23.4 28.3

20.0 16.6 21.2

10.4 9.1 10.6

66.2 55.9 58.3

17.4 17.6 17.9

32.3 50.5 31.1

21.4 28.3 18.2

24.0 23.0 24.3

21.5 25.9 23.1

54.5 51.1 52.6

77.5 72.7 73.4

22.5 27.3 26.6

80.0 83.4 78.8

1.6 1.8 2.0

12.0 10.9 12.6

50.8 51.8 55.2

40.9 38.0 45.6

19.2 22.2 21.2

1.53 1.41 1.33

Textiles, yarns and woven fabrics

1971-72 1972-73 1973-74

9.3 12.4 10.2

6.5 7.4 5.9

3.6 4.2 2.6

15.9 22.6 15.3

7.0 9.3 6.2

60.1 50.5 63.3

9.6 11.4 9.7

32.5 30.6 29.2

28.0 25.8 25.4

39.4 43.6 45.4

47.5 48.7 52.2

52.5 51.3 47.8

93.5 92.6 94.1

3.2 3.1 2.7

6.8 7.3 5.3

33.4 29.2 30.0

26.9 24.6 28.6

20.4 21.0 20.5

1.42 1.67 1.74

Rope, cordage and twine

1971-72 1972-73 1973-74

11.9 12.9 13.8

10.3 11.3 10.5

6.5 5.0 4.3

29.8 33.5 41.8

10.0 9.8 9.8

43.8 46.3 50.0

13.0 15.5 20.9

24.9 16.9 13.5

34.0 43.2 44.7

41.1 39.9 41.8

47.2 46.5 43.8

52.8 53.5 56.2

89.7 88.7 89.5

2.8 3.2 2.7

9.3 8.2 7.0

41.2 40.9 33.4

34.3 32.9 39.8

19.6 24.9 25.9

1.15 1.14 1.31

TABLE 4.3.3—continued

Ratios

Profitability Operating profit/Funds employed . . . .

Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up capital . Net profit/Shareholders' funds . Dividends paid/Net profit . Dividends paid/Paid-up capital

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed . . . .

Balance of funds/Funds employed . . . .

Working capital/Funds employed . . . .

Fixed assets/Funds employed .

Sales Total costs/Sales . . .

Depreciation/Sales . . .

Cash flow/Sales . . .

Working capital/Sales . .

Stock on hand/Sales . .

Trade debtors/Sales . .

Sales/Funds employed . .

Floor coverings and other textile products

1971-72 1972-73 1973-74

12.4 18.3 14.9

6.8 8.8 8,2

3.9 4.9 3.6

31.2 39.1 32.3

10.7 15.4 11.0

54.3 25.8 43.8

16.9 10.1 14.2

22.8 26.3 20.2

40.2 36.4 40.4

37.0 37.3 39.4

52.2 48.6 55.8

47.8 51.4 44.2

93.2 91.2 91.8

1.8 2.3 1.8

5.7 7.2 5.4

28.6 23.3 30.8

23.0 20.1 27.1

16.6 19.2 21.7

1.82 2.09 1.81

Knitting mills and clothing

1971-72 1972-73 1973-74

14.6 18.9 17.3

5.6 7.4 6.4

3.1 4.2 3.4

26.8 43.8 37.5

10.4 17.3 15.7

58.5 39.3 38.3

15.7 17.2 14.3

29.8 24.6 24.8

38.4 44.6 43.5

31.8 30.8 31.7

52.8 59.4 63.4

47.2 40.6 36.6

94.4 92.6 93.6

1.5 1.3 1.1

4.6 5.5 4.5

20.2 23.3 23.4

20.2 20.8 23.0

14.5 16.0 16.0

2.61 2.55 2.71

Footwear

1971-72 1972-73 1973-74

16.6 21.7 16.8

5.4 6.7 5.3

2.8 3.6 2.6

35.3 40.2 31.8

12.5 17.4 12.3

47.9 30.2 46.8

16.9 12.1 14.9

24.8 29.0 25.5

35.4 31.7 31.9

39.8 39.3 42.6

53.3 52.8 57.3

46.7 47.2 42.7

94.6 93.3 94.7

1.3 1.2 1.9

4.1 4.8 4.5

17.3 16.2 18.2

15.6 15.0 18.1

12.2 12.5 12.7

3.08 3.25 3.15

Timber milling, veneers and boards

1971-72 1972-73 1973-74

13.5 19.0 22.1

6.6 9.9 12.0

3.9 5.9 6.8

22.2 31.9 45.9

10.7 16.9 17.4

53.5 41.2 36.7

11.9 13.1 16.9

36.6 35.5 27.4

33.7 40.2 37.4

29.7 24.3 35.2

44.1 42.5 45.3

55.9 57.5 54.7

93.4 90.1 88.0

2.2 2.7 2.4

6.1 8.6 9.2

21.4 22.3 24.6

17.2 16.3 16.5

17.6 19.6 21.6

2.06 1.91 1.84

TABLE 4.3.3—continued

Wooden products Furniture and Paper and paper

and joinery mattresses products Printing and publishing

Ratios 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed . . . . 18.8 20.7 14.1 17.0 21.1 16.9 11.9 10.6

Operating profit/Sales . . 7.2 9.3 6.9 6.4 7.3 6.2 10.7 9.8

Net profit/Sales . . . 3.9 5.1 2.9 3.7 4.4 3.7 5.9 6.0

Net profit/Paid-up capital . 38.2 47.3 24.2 32.0 42.8 36.6 20.8 19.3

Net profit/Shareholders’ funds . 13.9 23.1 11.9 13.7 17.6 15.0 9.8 9.2

Divi dends paid/Net profit. . 61.3 33.8 46.9 51.5 41.0 46.2 53.6 70.2

Dividends paid/Paid-up capital . 23.4 16.0 11.4 16.5 17.5 16.9 11.1 13.6

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds 26.7 24.1 24.2 30.7 29.4 27.2 31.8 33.5

employed . . . .

Balance of funds/Funds

30.6 51.2 54.6 33.5 37.5 37.7 37.1 36.1

employed . . . .

Working capital/Funds

42.7 23.7 21.2 35.8 33.1 35.1 31.1 30.4

employed . . . . 48.4 48.5 45.0 38.2 42.3 42.2 23.4 20.5

Fixed assets/Funds employed . 51.6 51.5 55.0 61.8 57.7 57.8 76.6 79.5

Sales Total costs/Sales . . . 92.8 90.7 93.1 93.6 92.7 93.8 89.3 90.2

Depreciation/Sales . . . 1.6 1.3 1.4 1.2 1.3 1.0 4.7 5.2

Cash flow/Sales . . . 5.5 6.4 4.3 4.9 5.7 4.7 10.6 11.2

Working capital/Sales . . 18.7 21.8 22.0 14.4 14.7 15.6 21.0 19.1

Stock on hand/Sales . . 15.9 16.4 19.2 13.3 13.7 15.1 20.1 15.6

Trade debtors/Sales . . 18.1 20.5 20.0 12.9 13.5 13.9 17.2 17.0

Sales/Funds employed . . 2.59 2.22 2.05 2.65 2.87 2.71 1.11 1.08

13.7 17.1

10.4 9.1

6.0 6.1

18.4 30.6

9.3 11.0

54.9 45.4

10.1 13.9

43.0 37.8

33.7 36.8

23.3 25.4

27.7 72.3

31.4 68.6

89.6 90.9

4.5 3.0

10.5 9.1

20.9 16.7

18.1 11.5

17.9 23.6

1.32 1.88

17.2 18.4

8.3 9.2

4.8 4.5

27.9 35.7

11.5 11.0

54.0 45.9

15.1 16.4

35.9 25.7

36.2 35.3

27.9 39.0

31.8 37.8

68.2 62.2

91.7 90.8

3.4 2.3

8.2 6.8

15.4 18.9

11.4 15.4

23.5 22.8

2.07 2.00

TABLE 4.3.3—continued

Basic chemicals Paints

Pharmaceutical and veterinary products

Soap and other detergents

Ratios 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed . . . .

Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up cpaital . Net profit/Shareholders’ funds . Dividends paid/Net profit. . Dividends paid/Paid-up capital

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed . . . .

Balance of funds/Funds employed . . . .

Working capital/Funds employed . . . .

Fixed assets/Funds employed .

Sales Total costs/Sales . . .

Depreciation/Sales . . .

Cash flow/Sales . . .

Working capital/Sales . .

Stock on hand/Sales . .

Trade debtors/Sales . .

Sales/Funds employed . .

8.6 16.0 13.1

8.2 12.9 11.0

3.5 6.7 5.7

8.3 17.0 18.8

5.2 10.8 9.1

81.8 49.2 52.7

6.8 8.4 9.9

44.2 48.6 36.0

42.7 35.7 30.6

13.1 15.7 33.4

30.6 29.6 33.1

69.4 70.4 66.9

91.8 87.1 89.0

6.8 6.7 5.2

10.3 13.4 10.9

29.1 23.9 27.9

20.6 16.1 24.4

24.2 24.6 22.7

1.05 1.24 1.19

17.3 16.4 13.8

7.7 8.3 7.4

4.0 4.2 3.7

24.2 27.7 25.2

10.3 11.4 10.7

44.5 45.8 48.3

10.8 12.7 12.2

36.7 29.9 27.3

15.3 22.1 31.8

48.0 48.0 40.9

48.5 54.3 57.5

51.5 45.7 42.5

92.3 91.7 92.6

1.8 1.7 1.5

5.8 5.9 5.2

21.6 27.4 30.7

18.2 18.6 25.1

17.6 19.6 20.5

2.24 1.98 1.87

20.2 15.8 17.6

12.2 9.8 10.2

7.6 6.2 5.1

28.1 24.8 24.7

15.4 13.2 12.3

56.1 41.3 41.7

15.8 10.2 20.3

45.1 40.4 35.9

24.6 36.7 33.4

30.3 22.9 30.7

50.6 48.3 52.1

49.4 51.7 47.9

87.8 90.2 89.8

2.2 2.2 2.1

9.8 8.4 7.2

30.7 29.8 30.1

26.2 25.2 30.7

21.9 24.1 22.0

1.65 1.62 1.73

30.1 28.3 31.2

9.0 10.1 10.2

4.9 6.1 5.2

38.2 56.1 56.1

19.9 21.4 23.3

70.3 61.3 94.5

26.9 34.4 53.0

42.9 30.4 28.6

24.5 27.0 26.7

32.6 42.6 44.7

41.4 51.2 56.9

58.6 48.8 43.1

91.0 89.9 89.8

2.1 1.9 1.6

7.0 8.0 6.8

12.4 18.3 18.6

14.0 15.3 17.2

10.6 13.6 13.4

3.34 2.80 3.06

TABLE 4.3.3—continued

P etroleum refining,

C osm etics a n d toilet O ther chem icals a n d petroleum a n d coal G lass a n d glass

prep aratio n s related p roducts p ro d u cts p roducts

1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed 32.7 31.7 Operating profit/Sales . . 16.3 17.0

Net profit/Sales . . . 8.1 10.4

Net profit/Paid-up capital. . 108.5 105.1

Net profit/Shareholders’ funds . 20.5 27.2 Dividends paid/Net profit. . 64.0 41.8

Dividends paid/Paid-up capital . 69.5 43.9

C apital Structure

Paid-up capital/Funds employed Borrowed money/Funds 15.0 18.6

employed . . . .

Balance of funds/Funds

19.2 24.6

employed . . . .

Working capital/Funds

65.8 56.8

employed . . . . 51.1 50.5

Fixed assets/Funds employed . 49.9 49.5

Sales

Total costs/Sales . . . 83.7 83.0

Depreciation/Sales . . . 1.6 1.8

Cash flow/Sales . . . 9.7 12.2

Working capital/Sales . . 25.6 2 7 .0

Stock on hand/Sales . . 2 1 .8 21.1

Trade debtors/Sales . . 17.0 17.8

Sales/Funds employed . . 2 .0 0 1.87

26.7 14.3 29.9 24.5 9.2

13.7 8.3 12.9 12.6 10.6

7.8 5.2 7.9 8.0 5.0

75.7 13.5 45.7 52.7 16.3

18.7 6.8 16.9 14.5 5.5

20.2 68.0 45.2 48.6 66.1

15.3 9.2 20.7 25.6 10.8

20.1 66.3 36.3 29.3 26.5

21.1 21.1 24.6 33.8 28.1

58.8 12.6 39.1 36.9 45.4

51.8 51.5 50.6 55.0 21.9

48.2 48.5 49.4 45.0 78.1

86.3 91.6 87.1 87.4 89.4

1.4 2.0 1.6 1.4 9.6

9.2 7.2 9.5 9.4 14.6

26.7 30.1 24.2 28.3 25.3

28.3 25.2 18.4 22.6 11.9

19.4 21.6 20.0 21.9 30.8

1.94 1.71 2.09 1.94 0.87

10.3 8.5 10.7 11.1 7.8

12.0 7.9 9.2 8.9 7.7

6.0 3.3 5.2 3.4 3.7

20.9 14.3 21.1 23.3 28.3

7.4 5.0 7.3 9.6 9.3

34.5 81.1 49.0 61.0 35.7

7.2 11.6 10.3 14.2 10.1

24.6 24.6 24.6 18.3 13.1

28.0 28.2 16.1 50.4 44.0

47.4 47.2 55.0 31.3 42.9

30.6 69.4

31.6 68.4

32.6 67.4

30.7 69.3

24.3 75.7

88.0 92.1 90.8 91.1 92.3

8.4 6.6 5.0 4.5 4.1

14.4 9.9 10.2 7.9 7.8

35.6 29.3 28.0 24.4 24.1

12.8 12.6 25.4 21.6 21.4

35.7 31.3 17.2 16.5 19.1

0.86 1.08 1.16 1.26 1.01

TABLE 4.3.3—continued

Ratios

Profitability Operating profit/Funds employed Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up capital . Net profit/Shareholders’ funds . Dividends paid/Net profit . Dividends paid/Paid-up capital.

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed . . . .

Balance of funds/Funds employed . . . .

Working capital/Funds employed . . . .

Fixed assets/Funds employed .

Sales Total costs/Sales . . .

Depreciation/Sales . . .

Cash flow/Sales . . .

Working capital/Sales . .

Stock on hand/Sales . .

Trade debtors/Sales,· . .

Sales/Funds employed . .

Clay products

1971-72 1972-73 1973-74

12.5 12.1 8.7

11.5 11.1 8.9

6.6 6.7 4.8

21.4 26.0 19.4

8.8 9.5 6.4

62.3 46.0 49.8

13.4 11.9 9.7

33.5 27.9 24.2

25.1 30.7 34.2

41.4 41.4 41.6

19.0 22.4 24.0

81.0 77.6 76.0

88.5 88.9 91.1

4.0 4.2 4.0

10.6 10.9 8.8

17.4 20.6 24.6

17.4 13.8 18.4

16.9 20.3 19.7

1.09 1.09 0.98

Cement, concrete and other products

1971-72 1972-73 1973-74

15.5 17.2 15.5

10.0 10.2 9.4

5.4 5.6 4.8

27.1 31.3 24.5

10.8 12.5 10.6

62.3 64.2 59.8

16.9 20.1 14.6

31.0 30.2 32.5

24.7 30.5 28.2

44.3 39.3 39.3

29.2 33.4 27.2

70.8 66.6 72.8

90.0 89.8 90.6

4.5 4.3 3.8

9.9 9.9 8.6

18.9 19.8 16.4

11.8 9.8 10.3

20.8 25.8 21.8

1.54 1.69 1.66

Basic metal products

1971-72 1972-73 1973-74

5.9 6.9 10.1

8.1 9.2 12.4

6.7 7.3 7.5

21.1 35.7 26.8

7.4 9.0 8.6

63.1 56.9 48.6

13.3 20.3 13.0

22.9 15.5 22.7

45.5 44.5 41.6

31.6 40.0 35.7

21.0 21.8 23.1

79.0 78.2 76.9

91.9 90.8 87.6

8.5 8.9 7.4

15.2 16.2 14.9

29.0 28.8 28.6

25.1 24.2 23.6

17.7 18.1 17.0

0.72 0.76 0.81

Fabricated metal products

1971-72 1972-73 1973-74

12.6 15.0 14.6

7.6 7.6 8.3

3.9 4.1 4.3

23.7 31.4 29.5

10.7 13.6 12.2

46.2 42.3 40.1

11.0 13.3 11.8

27.0 26.2 25.8

38.8 38.9 38.7

34.2 35.0 35.5

45.3 47.2 49.1

54.7 52.8 50.9

92.4 92.4 91.7

2.2 1.9 2.2

6.1 6.0 6.5

27.4 23.8 27.8

20.8 17.5 22.5

17.6 18.7 20.4

1.66 1.99 1.76

TABLE 4.3.3—continued

Motor vehicles, bodies, Motor vehicle instruments, trailers and caravans parts and accessories Other transport equipment

Photographic, professional and scientific equipment

Ratios 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73

Profitability Operating profit/Funds employed 7.8 6.5 8.9 14.6 16.5 15.8 10.1 8.3

Operating profit/Sales . . 3.5 2.7 3.9 9.7 10.5 9.6 4.2 3.0

Net profit/Sales . . . 1.6 1.9 1.5 4.9 5.2 4.4 1.7 0.6

Net profit/Paid-up capital . 16.1 19.4 20.5 31.2 30.5 31.4 10.3 5.2

Net profit/Shareholders’ funds . 4.1 5.3 4.9 11.6 12.7 11.7 5.8 2.3

Dividends paid/Net profit . 22.9 122.0 34.9 45.0 39.7 40.3 46.8 146.2

Dividends paid/Paid-up capital 3.7 23.7 7.1 14.0 12.1 12.6 4.8 7.6

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds 22.0 24.1 16.3 23.6 27.1 22.9 38.7 32.5

employed . . . .

Balance of funds/Funds

19.7 18.3 34.5 32.2 29.8 33.0 40.3 46.4

employed . . . .

Working capital/Funds

58.3 57.6 49.2 44.2 43.1 44.1 21.0 21.1

employed . . . . 42.4 49.3 60.4 49.2 48.0 50.5 34.7 24.0

Fixed assets/Funds employed . 57.6 50.7 39.6 . 50.8 52.0 49.5 65.3 76.0

Sales Total costs/Sales . . . 96.5 97.3 96.1 90.3 89.5 90.4 95.8 97.0

Depreciation/Sales . . . 3.2 2.7 1.7 3.0 3.0 3.3 1.6 1.6

Cash flow/Sales . . . 4.8 4.6 3.2 7.9 8.2 7.7 3.3 2.2

Working capital/Sales . . 18.9 20.5 26.3 32.7 30.4 30.6 14.4 8.6

Stock on hand/Sales . . 24.8 25.2 32.6 26.4 25.0 28.4 20.3 13.1

Trade debtors/Sales . . 9.9 11.0 12.1 18.1 20.0 19.1 19.5 14.1

Sales/Funds employed . . 2.24 2.40 2.29 1.51 1.58 1.65 2.41 2.79

1973-74 1971-72 1972-73 1973-74

9.7 18.9 26.8 15.2

3.1 9.7 14.0 8.9

0.6 5.3 8.6 5.9

6.5 44.2 79.3 61.3

2.6 9.8 14.5 11.5

122.5 65.0 37.7 21.6

7.9 28.7 29.9 13.2

30.2 23.2 20.9 16.2

42.1 23.0 9.5 10.2

27.7 53.8 69.6 73.6

32.8 67.2

36.4 63.6

35.7 64.3

50.3 49.7

96.9 90.3 86.0 91.1

1.3 2.7 3.0 2.6

1.9 8.0 11.6 8.5

10.3 18.7 18.7 29.6

14.3 18.7 24.1 30.2

16.2 23.3 19.0 21.2

3.17 1.95 1.91 1.70

TABLE 4.3.3—continued

Ratios

Appliances and electrical Industrial machinery equipment and equipment

Leather and leather products

1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

Profitability Operating profit/Funds employed Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up capital . Net profit/Shareholders’ funds Dividends paid/Net profit . Dividends paid/Paid-up capital

9.8 5.2 2.7 18.9

7.8 49.0 9.3

13.9 6.9 4.0

28.3 11.3 38.4 10.9

11.6 5.7 2.7

22.9 8.9 46.7 10.7

12.4 6.9 3.4 20.5

9.2 41.6 8.5

13.6 14.5 10.1 15.3 12.7

7.6 8.5 5.3 5.9 5.5

4.4 4.1 3.5 3.1 2.5

24.2 31.1 30.5 48.6 28.5

11.1 10.9 12.1 18.7 8.3

42.3 45.0 69.2 32.0 62.6

10.2 14.0 21.1 15.5 17.8

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed Balance of funds/Funds employed

Working capital/Funds employed Fixed assets/Funds employed .

26.4 39.8 33.8 59.4 40.6

28.2 33.3 38.5 55.9

44.1

23.6 40.1 36.3 60.6

39.4

29.8 32.3 37.9 56.2

43.8

32.7 29.5 37.8 58.4 41.6

22.6 32.0 45.4 59.5 40.5

21.8 46.8 31.4 54.9 45.1

16.4 53.5 30.1 56.2 43.8

20.2 35.4 44.4 52.4 47.6

Sales Total costs/Sales . . . . . , . . . . 94.8 93.1 94.3 93.1 92.4

Depreciation/Sales . . . . . . . . . 2. 1 2. 1 1. 6 1. 7 2. 0

Cash flow/Sales . . . . . . . . . 4. 8 6. 1 4. 3 5.1 6. 4

Working capital/Sales . . . . . . . . 31.8 27.8 29.8 31.2 32.6

Stock on hand/Sales . . . . . . . . 27.2 24.6 27.8 29.8 27.6

Trade debtors/Sales . . . . . . . . 22.6 21.6 21.6 21.6 22.9

Sales/Funds employed . . . . . . . . 1.87 2.01 2.04 1.80 1.79

91.5 94.7

1.7 1.4

5.8 4.9

35.0 29.0

33.3 22.3

24.0 18.0

1.70 1.89

94.1 94.5

1.3 1.1

4.4 3.6

21.7 22.7

18.0 17.9

14.2 18.0

2.59 2.31

200

TABLE 4.3.3—continued

Ratios

Plastic and related

Rubber products products Other manufacturing

1971-72 1972-73 1973-74 1971-72 1972-73 1973-74 1971-72 1972-73 1973-74

P rofitability Operating profit/Funds employed Operating profit/Sales . .

Net profit/Sales . . .

Net profit/Paid-up capital . Net profit/Shareholders’ funds Dividends paid/Net profit . Dividends paid/Paid-up capital

....................................... 6.3

....................................... 4.7

...................................... 3.3

...................................... 10.8

...................................... 6.6

...................................................64.6

...................................... 7.0

10.1 7.0 13.0 15.6

7.4 4.6 8.6 9.8

4.5 5.3 4.5 5.8

13.8 19.0 23.0 29.2

8.5 10.3 10.8 13.4

51.4 43.6 43.0 36.8

7.1 8.3 9.9 10.8

16.5 18.2 17.5 19.3

10.4 9.3 8.5 9.2

4.8 5.6 5.3 4.8

30.8 38.3 43.7 46.0

11.8 14.9 16.2 15.6

41.5 44.5 33.0 39.5

12.8 17.0 14.4 18.1

Capital Structure Paid-up capital/Funds employed Borrowed money/Funds employed Balance of funds/Funds employed

Working capital/Funds employed Fixed assets/Funds employed .

.................................................. 41.5

.................................................. 33.9

.................................................. 24.6

...................................................57.5

.................................................. 42.5

44.9 42.1 29.7 31.4

32.5 31.2 37.2 39.2

22.6 26.7 33.1 29.4

53.1 56.2 42.0 46.1

46.9 43.8 50.8 53.9

24.6 28.5 24.8 21.7

41.7 38.2 37.5 36.3

33.7 33.3 37.7 42.0

47.1 56.8 56.9 60.4

52.9 43.2 43.1 39.6

Sales Total c o s ts /S a le s ...................................... . . . . 95.3 92.6 95.4 91.4 90.2

Depreciation/Sales...................................... . . . . 3.7 3.5 2.5 3.4 3.5

Cash flow/Sales . . . . . . . . . 7. 0 8. 0 7. 8 7. 9 9. 3

Working capital/Sales . . . . . . . . 42.8 38.8 37.1 27.9 29.1

Stock on hand/Sales . . . . . . . . 23.4 19.7 25.0 21.3 19.5

Trade debtors/Sales . . . . - . . . 30.2 29.9 25.0 23.1 26.3

Sales/Funds employed . . . . . . . . 1.34 1.37 1.51 1.51 1.58

89.6 3.9 8.7 29.7

25.3 21.5 1.59

90.7 1.7 7.3 29.2 24.3

16.7 1.95

91.5 1.7 7.0 27.6

21.9 18.2 2.06

90.8 1.4 6.2 28.9 23.5

19.4 2.09

For explanations and definitions refer to paragraphs 6 to 12 of Appendix 4.3.

201

TABLE 4.3.4: PROFITABILITY, CAPITAL STRUCTURE AND SALES RATIOS: MANUFACTURING SECTOR— M ED IAN AND QUARTILE ANALYSIS OF LARGE FIRMS IN EACH INDUSTRY— 1971-72 TO 1973-74 (Per cent)

Ratios

Fruit and vegetable

Meat products (19) Milk products (19) products (11)

Margarine, oils and fats, n.e.c. (9)

Q1 M Q3 Q1 M Q3 Q1 M Q3 Q1 M Q3

Profitability g Operating profit/Funds employed

Operating profiVSales . .

Capital Structure Paid-up capital/Funds employed .

Borrowed money/Funds employed

Balance offunds/Funds employed

Working capital/Funds employed

Fixed usscts/Funds employed ,

Sales Depreciation/Sales . . .

Stock on hand/Sales . . ,

Trade debtors/Sales . . .

Sales/Funds employed . .

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 7.4

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73

1973- 74

1971- 72

1972- 73 1973- 74 1971- 72

1972- 73

1973- 74

10.1 15.7

8.2 13.1

- 1 .9 4.3

2.8 3.3

3.0 4.7

- 0 .6 1.0

19.3 29.2

21.8 24.9

17.0 24.6

25.9 37.0

24.8 32.9

29.2 40.8

23.8 27.7

10.1 35.9

- 3 .5 20.4

13.8 33.0

18.8 33.1

16.2 28.7

60.2 67.0

54.9 66.9

59.2 71.3

0.7 1.1

0.8 1.1

0.9 1.3

6.2 7.1

4.8 6.0

3.6 7.1

4.3 6.4

4.5 7.7

5.0 8.4

3.47 4.09

2.78 3.88

2.47 3.20

22.3 7.1

25.9 5.9

7.6 3.5

4.6 1.8

6.5 1.5

2.6 1.0

37.6 24.8

36.9 26.5

45.5 25.9

52.1 3.0

49.3 10.2

54.3 4.1

47.5 11.7

51.8 24.9

48.9 19.5

39.8 - 0 .3

45.1 10.2

40.8 - 4 . 6

86.2 63.5

81.2 66.9

83.8 70.3

1.3 1.8

1.8 1.3

1.9 1.3

10.1 2.9

10.7 3.0

9.6 2.4

8.3 7.1

9.4 8.4

11.4 5.5

4.99 2.77

5.29 2.32

5.17 2.79

8.3 23.2 1.7

10.8 13.5 - 0 . 5

7.2 9.1 4.4

2.5 5.7 1.0

2.5 5.8 - 0 . 4

1.8 3.0 3.4

43.9 56.4 11.6

35.4 42.5 11.1

34.8 45.7 10.3

26.8 44.4 24.9

25.8 32.9 39.4

31.0 37.0 39.0

24.3 46.8 1.5

35.6 55.0 0.7

32.1 56.8 3.1

21.3 36.5 47.8

20.9 33.1 56.3

18.4 29.7 49.4

78.7 100.3 39.2

79.1 89.8 38.9

81.6 104.6 36.2

2.2 2.7 1.6

1.8 2.3 1.4

1.8 2.2 1.7

6.3 8.8 13.8

7.5 9.1 24.6

6.3 8.8 20.0

9.7 13.8 15.9

9.4 12.7 14.0

10.3 12.2 16.7

3.49 4.83 0.96

3.87 4.72 1.19

4.30 4.97 0.97

4.5 5.1 7.2 3.9 4.2 6.9

15.9 14.9 11.3 53.1 56.0 47.6

18.2 17.6 13.5 51.5 60.1 56.2 48.5 39.9 43.8

2.1 1.7 2.1 34.7 28.9 40.6 21.9

25.8 20.4 1.41 1.29

1.21

7.8 9.3

6.3 9.1

13.7 11.1

6.6 4.3

5.7 4.5

9.3 6.1

30.2 2.6

24.5 —

26.2 4.7

82.7 —

81.5 —

79.3 20.7

45.9 4.6

44.1 15.8

46.5 - 5 .7

60.8 35.6

61.1 - 2 6 .4

63.8 41.1

52.2 32.3

43.7 48.4

50.6 30.1

3.3 0.6

2.1 0.4

2.3 0.5

49.7 4.7

31.4 5.8

46.7 5.4

32.5 8.0

37.7 8.6

28.8 12.9

1.67 1.63

2.06 1.92

1.66 1.81

19.6 59.3

26.6 47.3

21.0 59.3

7.0 8.2

8.2 12.5

8.8 13.5

19.2 58.5

19.9 47.1

19.1 36.4

50.5 77.2

37.1 47.2

34.9 86.6

22.8 45.5

38.6 74.0

40.0 65.7

53.2 67.7

49.0 51.6

49.7 69.9

46.8 64.4

51.0 126.4

50.3 58.9

1.6 3.1

1.1 2.1

1.2 2.4

12.8 32.0

16.0 21.5

16.8 36.1

15.0 18.3

16.5 31.0

15.1 44.4

2.11 6.71

2.26 6.52

2.38 6.97

TABLE 4.3.4—continued

Flour and bread Raw and refined

products (19) sugar (7)

Confectionery and cocoa products (11)

Food products, n.e.c. (11)

Ratios Ql M Q3 Ql M Q3 Ql M

PPOFITABILIΓΥ Operating profit/Funds employed 1971-72 6.2 15.8 22.3 16.8 23.1 30.3 19.2 21.6

1972-73 5.3 11.0 17.6 15.0 19.6 28.5 15.7 18.8

1973-74 1.0 9.3 14.4 20.0 24.5 34.0 8.2 18.9

Operating profit/Sales . . 1971-72 2.1 6.1 7.5 8.6 10.0 13.2 8.8 13.2

1972-73 2.0 4.1 7.1 7.7 12.6 16.6 9.8 13.7

1973-74 0.4 13.3 5.5 5.1 12.5 16.9 4.6 12.0

Capital Structure Paid-up capital/Funds employed . 1971-72 12.5 24.7 42.9 34.9 41.9 54.6 0.7 23.5

1972-73 6.0 23.6 55.3 27.8 37.7 38.9 0.7 20.8

1973-74 5.3 27.6 56.1 22.6 36.1 57.7 0.6 17.5

Borrowed money/Funds employed 1971-72 20.0 41.1 49.0 — 6.5 11.6 0.6 5.0

1972-73 38.6 50.8 77.5 0.6 2.6 15.8 — 3.7

1973-74 33.9 61.7 99.8 1.7 4.0 15.8 — 8.4

Balance of funds/Funds employed 1971-72 13.0 32.7 49.9 43.3 46.5 58.6 46.0 74.7

1972-73 0.3 20.6 39.6 48.1 61.0 63.1 44.4 55.3

1973-74 - 4 4 .4 14.5 36.2 39.9 59.6 62.5 38.8 50.9

Working capital/Funds employed 1971-72 11.0 24.2 45.4 5.2 11.1 25.8 33.4 34.8

1972-73 2.4 18.3 43.0 5.2 9.7 12.5 29.3 36.2

1973-74 3.2 28.4 49.9 12.2 15.1 20.2 36.2 44.4

Fixed assets/Funds employed . 1971-72 54.6 75.8 89.0 74.2 88.9 94.8 56.7 65.2

1972-73 57.0 81.7 97.6 87.5 90.3 94.8 57.7 63.8

1973-74 50.1 71.6 96.8 79.8 84.9 87.8 50.7 55.6

Sales Depreciation/Sales . . . 1971-72 1.0 2.0 2.7 2.8 3.5 4.8 1.6 2.0

1972-73 1.2 2.2 3.1 2.7 3.3 3.8 1.8 2.0

1973-74 1.0 1.7 2.5 1.7 3.0 4.1 1.5 2.0

Stock on hand/Sales . . . 1971-72 2.7 7.8 13.0 2.1 2.2 3.0 12.1 15.7

1972-73 2.0 3.2 9.2 1.9 2.2 4.1 10.9 17.1

1973-74 2.2 3.6 12.4 1.0 1.6 5.2 15.8 18.1

Trade debtors/Sales . . . 1971-72 10.4 14.9 19.4 0.6 27.9 38.5 8.1 12.4

1972-73 5.5 13.5 18.6 0.6 18.6 29.2 7.4 12.5

1973-74 6.3 16.2 23.8 4.3 10.2 25.2 10.0 12.2

Sales/Funds employed . . 1971-72 1.88 2.69 3.95 1.35 1.68 2.88 1.56 1.87

1972-73 1.81 2.44 3.40 1.56 1.69 1.99 1.32 1.81

1973-74 1.80 2.38 4.17 1.34 2.01 4.40 1.42 1.79

Q3 Q l

27.2 8.2

29.2 5.4

39.9 3.0

14.3 1.9

16.4 3.3

12.5 1.8

28.2 13.0

49.6 1.6

45.1 12.7

28.9 5.6

23.8 4.2

16.1 11.1

93.5 - 1 9 .4

75.5 —

99.4 -1 3 .1

43.3 21.0

42.3 31.9

49.3 40.4

66.6 48.7

70.7 37.4

63.8 38.2

2.5 0.7

2.6 0.8

2.7 0.7

19.9 8.1

20.2 12.8

28.6 19.8

16.4 13.4

15.3 8.3

13.7 7.7

2.19 0.85

2.89 1.25

2.32 1.19

M

12.5 15.2 15.9 3.9

8.0 5.2

23.4 17.4 23.6 23.1

37.8 43.9 29.7 32.9

30.6 45.8 54.1 50.6

54.2 45.9 49.4

1.9 1.5 2.0 20.1 17.3 24.7 15.2 14.7 11.4

1.18 2.00 1.68

Q3

19.6 25.3 20.1 8.3

12.7 11.3

63.6 62.9 58.2 66.9

74.4 56.0 50.3 43.2

44.8 51.3 62.6 61.8

79.0 68.1 59.6

5.5 3.9 3.7 29.2 28.3 33.9 23.0 23.8 25.8

3.93 3.55 2.86

TABLE 4.3.4—continued

Beverages and Textiles, yams and Rope, cordage

malt (19) woven fabrics (19) and twine (17)

Ratios Q1 M Q3 Q1 M Q3 Q1 h

Floor coverings and other textile products (19)

Q1 Q1 M Q3

Profitability Operating profit/Funds employed 1971-72 9 .7 14.7 2 1 .2 3 .7 7 .2 11.2 5 .9

1972-73 8 .7 15.3 2 3 .8 7 .2 10.1 2 0 .3 11.2

1973-74 5 .7 10.8 17.8 6 .3 9 .4 1 5 .0 1 1 .4

Operating profit/Sales . . 1971-72 7 .4 11.0 26.3 3 .0 6 .2 8 .9 2 .5

1972-73 9 .7 14.4 19.5 4 .3 8 .2 10.5 6 .9

1973-74 6 .0 14.7 2 1 .4 2 .9 6 .5 9 .0 8 .3

Capital Structure Paid-up capital/Funds employed . 1971-72 8.1 2 8 .2 4 1 .2 22.1 2 7 .7 54.3 0 .1

1972-73 8 .4 32.8 56.3 19.1 2 8 .8 3 7 .8 —

1973-74 7 .3 2 6 .0 3 6 .7 17.6 2 6 .8 33.7 —

Borrowed money/Funds employed 1971-72 2 .6 2 0 .6 4 3 .0 12.6 2 9 .2 4 1 .7 2 .4

1972-73 9 .7 2 1 .8 30.9 15.9 2 6 .8 4 5 .9 11.7

1973-74 13.1 2 5 .7 3 8 .2 15.8 2 7 .0 30.8 18.3

Balance of funds/Funds employed 1971-72 26.8 55.6 63.3 32.3 38.3 4 7 .4 4 2 .8

1972-73 3 2 .7 4 9 .7 6 6 .7 2 9 .3 4 0 .9 4 8 .9 3 7 .8

1973-74 34.2 5 6 .4 66.8 36.1 4 3 .2 5 9 .6 3 2 .5

Working capital/Funds employed 1971-72 8 .5 36.7 5 9 .0 4 0 .5 4 7 .9 6 1 .6 52.3

1972-73 10.2 35.1 5 8 .4 3 8 .4 5 1 .5 6 1 .4 5 1 .6

1973-74 2 1 .8 39.6 6 4 .0 4 3 .6 5 5 .4 6 4 .6 5 5 .4

Fixed assets/Funds employed . 1971-72 4 1 .0 63.3 9 1 .5 3 8 .4 52.1 5 9 .5 1 9 .2

1972-73 4 1 .6 64.9 89.8 3 8 .6 4 8 .5 6 1 .6 1 6 .8

1973-74 3 6 .0 6 0 .4 7 8 .2 3 5 .4 4 4 .6 5 6 .4 11.9

Sales Depreciation/Sales . . . 1971-72 2 .4 3 .8 4 .7 1 .7 3 .4 3 .7 1 .0

1972-73 2 .2 3.1 4 .3 1.6 3.1 3 .8 0 .7

1973-74 1 .9 2 .7 4 .7 1.6 2 .6 3.1 0 .7

Stock on hand/Sales . . . 1971-72 8 .8 2 6 .9 64.1 2 1 .5 27.1 3 1 .7 17.6

1972-73 5 .6 12.1 7 3 .9 1 8 .4 2 4 .3 3 3 .4 1 7 .5

1973-74 7.1 16.2 6 8 .6 2 4 .4 2 9 .9 3 5 .4 1 8 .4

Trade debtors/Sales . . . 1971-72 12.0 15.2 2 1 .3 1 7 .4 2 0 .3 2 8 .7 16.7

1972-73 13.4 17.8 2 6 .4 14.1 19.8 2 6 .8 1 4 .0

1973-74 15.3 18.5 2 5 .2 15.4 2 2 .0 2 5 .9 1 9 .2

Sales/Funds employed . . 1971-72 0 .5 8 0 .9 2 1.85 1.09 1.27 2 .1 8 1.42

1972-73 0.61 0.81 1.80 1.12 1.66 2 .2 3 1.03

1973-74 0 .7 2 0 .8 3 1.28 1.19 1.54 2 .1 8 1.29

1 2 .4 12.8 16.8 10.2 11.1

9 .6

19.8 1 8 .0 15.4 2 4 .4 16.0 2 4 .5 55.9 55.3 4 6 .8 5 7 .4 75.1 6 3 .3 4 2 .6 2 4 .9 3 6 .7

1 .4 1.6 1.1 3 0 .0 2 7 .0 3 6 .0 1 7 .0 20.6 2 1 .9

1.47 1.85 2.02

3 1 .9 3 8 .2 3 0 .2 11.3

13.7 12.6

3 7 .4 3 6 .2 22.8 34.1 4 4 .7

6 6 .7 8 5 .0 7 2 .5 6 9 .7 8 0 .8 8 3 .2 88.1 4 7 .7 4 8 .4 4 4 .6

2.6 2 .3 1 .7 3 6 .2 4 4 .5 41.1 21.2 2 7 .0 2 6 .8 2 .3 7 2.61

2 .6 2

6.8 7 .0 7 .0 3 .8 3 .5 5 .6

0.2 0.2 0.2 17.5

5 .6 6.1 2 0 .5 2 4 .8 3 7 .7 4 6 .0 4 4 .9 5 0 .0 21.8 3 1 .4 2 3 .3

0 .5 0 .5 0 .5 12.1 1 3 .4 12.4 13.1 12.9 15.3

1.68 1.59 1 .4 4

15.9 2 0 .4 19.3 4 .7

6 .3 9 .1

7 .5 18.1 12.5 5 1 .5

13.8 2 0 .4 3 2 .2 57.1 6 0 .0 5 4 .2 55.1

58.9 4 5 .8 4 4 .9 4 1 .1

1.0 1.0 1.0 2 1 .9 1 9 .0 21.6 1 6 .2 14.8 17.3 2.41 2 .2 9 2 .2 8

2 9 .3 3 0 .7 2 8 .9 11.0

13.9 12.7

2 8 .4 2 6 .8 2 5 .6 7 3 .3

6 4 .0 4 1 .3 5 6 .2 8 4 .7 9 0 .4

7 8 .2 68.6 7 6 .7

5 4 .0 55.1 5 0 .0

2 .4 1.6 2 .0 3 0 .6

2 3 .6 2 6 .9 1 8 .6 19.5

1 9 .0 3 .8 2 3 .4 4 2 .9 7

TABLE 4.3.4—continued

Ratios

Knitting mills Timber milling, Wooden products

and clothing (19) Footwear (13) veneers and boards (19) and joinery (13)

Q1 M Q3 Q1 M Q3 Q1 M Q3 Q1 M Q3

Profitability Operating profit/Funds employed 1971-72 1.8 10.7 18.8 - 3 .3 20.1 34.5 7.3 9.7

1972-73 11.4 16.2 27.2 5.5 17.0 35.0 13.3 18.2

1973-74 5.4 14.4 20.8 8.1 21.1 30.3 15.7 21.4

Operating profit/Sales . . 1971-72 1.1 6.3 8.9 - 0 . 9 4.3 11.1 4.1 5.3

1972-73 6.3 7.8 9.8 1.2 5.8 13.0 6.1 9.2

1973-74 2.7 7.0 8.6 2.1 4.3 10.6 7.3 12.2

Capital Structure Paid-up capital/Funds employed . 1971-72 14.8 32.2 41.4 4.3 11.7 31.1 17.8 34.0

1972-73 12.1 27.4 36.8 3.2 14.9 30.4 21.3 35.2

1973-74 12.9 26.7 33.3 4.2 7.5 26.3 21.8 35.8

Borrowed money/Funds employed 1971-72 27.8 29.9 52.1 16.0 27.1 61.7 9.7 26.9

1972-73 22.8 33.1 48.2 2.9 27.3 57.7 15.6 34.2

1973-74 24.4 37.0 46.9 13.2 29.8 69.6 16.8 23.1

Balance of funds/Funds employed 1971-72 21.2 33.2 52.9 - 1 5 .0 48.7 62.9 7.6 24.3

1972-73 27.5 35.1 54.6 20.1 48.9 69.5 15.5 24.0

1973-74 24.3 40.6 51.0 19.0 43.1 70.3 25.9 31.8

Working capital/Funds employed 1971-72 42.7 52.5 63.9 47.2 55.2 81.4 37.6 52.7

1972-73 50.6 57.5 66.4 48.1 55.0 62.8 34.5 42.0

1973-74 50.0 59.2 66.6 28.4 56.3 67.4 32.5 37.7

Fixed assets/Funds employed . 1971-72 36.1 47.5 57.3 18.6 44.8 52.8 37.5 47.3

1972-73 33.6 42.5 49.4 37.2 45.0 51.9 42.5 58.0

1973-74 33.4 40.8 . 50.0 32.6 43.7 71.6 33.4 62.3

Sales Depreciation/Sales . . . 1971-72 0.9 1.7 2.8 0.6 1.3 2.0 1.0 2.2

1972-73 0.7 1.2 2.1 0.7 1.1 1.8 0.9 2.3

1973-74 0.7 1.2 1.9 0.5 1.4 2.2 1.2 2.2

Stock on hand/Sales . . . 1971-72 22.1 26.5 33.0 14.7 17.2 27.1 15.4 18.8

1972-73 20.6 25.3 32.7 10.7 12.3 23.3 12.0 17.5

1973-74 26.4 33.7 39.3 13.6 16.5 27.8 15.4 19.2

Trade debtors/Sales . . . 1971-72 10.8 13.0 16.4 8.7 11.9 18.3 12.2 16.0

1972-73 12.7 15.2 20.7 7.5 13.1 15.0 14.7 19.6

1973-74 11.9 15.9 19.9 5.6 12.7 16.7 14.0 17.6

Sales/Funds employed . . 1971-72 1.59 1.90 2.90 1.80 2.93 4.13 1.32 1.84

1972-73 1.63 2.05 2.43 2.27 2.95 3.37 1.27 1.78

1973-74 1.59 1.94 2.43 2.19 2.83 5.27 1.36 1.77

13.7 26.3 27.5 11.0

17.5 20.2

55.1 56.5 51.0 43.0 53.5 40.9

54.6 47.4 53.0 62.5

57.5 66.6 62.4 65.5 67.5

3.2 4.5 3.8 22.6 22.3 21.8 21.5

22.3 23.8 2.38 2.71

2.42

1.7 4.6 6.8 0.5

1.0 2 . 0

2.9 0.3 1.1 3.5

12.1 9.2 32.9 36.3 25.6 46.8

44.1 46.6 19.8 24.0

0. 6 0.7 0. 6 6.9

6.5 10.7 14.8 10.7

13.7 2.03 1.65 1.54

11.1 32.5

12.1 64.6

18.0 40.9

5.0 11.2

4.0 12.6

10.1 19.4

19.5 31.2

2.9 31.5

7.0 25.6

22.1 54.7

30.1 42.4

33.3 61.4

58.8 74.0

54.4 99.6

55.9 69.6

46.0 53.4

53.7 80.2

68.2 76.0

54.0 74.4

46.3 53.2

31.8 55.9

1.0 2.1

0.9 1.2

1.0 1.5

16.0 23.4

14.2 19.0

18.8 24.7

17.6 28.5

17.0 25.0

19.8 31.1

3.07 7.03

4.07 5.48

1.97 5.90

TABLE 4.3.4—continued

Furniture and Paper and paper Printing and

mattresses (19) products (13) publishing (19) Basic chemicals (13)

Profitability Operating profit/Funds employed

Operating profit/Sales . .

Capital Structure Paid-up capital/Funds employed .

Borrowed money/Funds employed

Balance of funds/Funds employed

Working capital/Funds employed

Fixed assets/Funds employed .

Sales Depreciation/Sales . . .

Stock on hand/Sales . . .

Trade debtors/Sales . . .

Sales/Funds employed . ·

1971-72 4.5 14.1 24.8

1972-73 5.8 15.7 30.3

1973-74 8.1 14.8 25.2

1971-72 2.4 5.1 7.7

1972-73 3.9 5.8 9.7

1973-74 3.9 6.2 11.5

1971-72 2.2 13.9 33.0

1972-73 2.9 12.8 35.8

1973-74 2.3 9.5 28.1

1971-72 12.7 31.8 46.1

1972-73 19.3 33.2 40.7

1973-74 20.1 43.6 48.2

1971-72 26.3 51.7 77.4

1972-73 26.9 46.5 74.4

1973-74 23.7 44.4 66.2

1971-72 26.8 37.4 61.9

1972-73 33.6 45.4 56.6

1973-74 33.2 53.8 68.2

1971-72 38.1 62.6 73.2

1972-73 43.4 54.6 66.4

1973-74 31.8 46.2 66.8

1971-72 0.5 1.1 1.7

1972-73 0.6 1.0 1.7

1973-74 0.5 1.1 1.3

1971-72 11.1 17.2 21.0

1972-73 10.2 14.4 22.4

1973-74 14.0 17.3 22.6

1971-72 6.9 9.5 14.6

1972-73 7.8 11.3 16.4

1973-74 9.4 12.6 18.5

1971-72 1.86 2.53 3.59

1972-73 1.89 2.59 3.85

1973-74 1.68 2.72 3.76

9.1 14.8 18.9 9.1

3.9 11.4 26.6 8.3

9.8 17.2 25.6 10.4

7.4 9.4 14.6 7.0

3.1 9.6 11.3 5.9

9.5 10.9 13.7 7.6

4.2 21.1 41.4 20.9

5.7 36.7 51.4 17.9

21.8 39.9 58.1 6.1

18.7 37.4 42.1 0.3

3.2 25.3 42.4 1.9

3.8 23.1 46.7 3.8

25.0 41.4 57.8 7.9

21.4 30.1 61.8 16.0

3.1 33.3 65.4 31.8

18.6 27.4 33.3 22.0

6.6 19.9 33.9 30.8

14.4 35.7 45.0 27.4

66.7 72.6 81.4 56.3

66.1 80.1 93.4 51.8

55.0 64.3 85.6 48.7

2.2 3.0 5.5 2.2

2.4 3.1 5.2 2.1

2.2 3.0 5.5 1.8

12.0 19.8 23.0 8.2

9.3 13.3 17.7 6.3

10.8 16.6 20.8 7.0

9.2 14.7 18.7 14.5

9.3 17.6 21.1 15.9

12.6 18.2 23.6 16.9

0.94 1.31 2.03 1.27

0.98 1.41 3.62 1.31

1.04 1.42 1.96 1.29

18.8 14.3 19.0 10.3

7.6 11.0

30.9 27.0 22.1

23.0 32.4 26.0 36.3 36.7 53.5 30.5 40.6 40.5

69.5 59.4 59.5

2.6 2.5 2.1 11.3 13.2 15.1 18.1 18.8 18.9

1.50 1.76 1.63

29.4 28.8 30.2 13.6

13.5 12.7

49.6 34.9 31.8 53.1

45.2 31.6 53.0 51.4 70.0 43.7

48.2 51.3 78.0 69.2

72.6

3.1 3.4 2.5 15.3 18.0 28.4 25.4

23.5 26.0 2.49 2.49

2.63

2.0 13.0 8.0 1.5

6.5 7.2

30.8 31.5 21.7 13.2

7.2 8.8

- 1 . 8

12.9 6.8 15.5 8.4 17.1 49.3 47.2 42.1

3.7 3.7 3.1 17.6 13.4 15.7 16.0

13.9 11.9 0.83 0.95

1.01

10.8 16.5 15.8 7.7 11.7

8.8

46.4 48.4 39.2 24.9 20.7

12.2 22.1 31.3 39.6 37.2 28.6 25.8

62.8 71.4 74.2

7.1 6.3 5.2 18.7 16.2 23.5 20.0 20.2 22.3

1.20 1.65 1.58

18.2 30.3 20.4

12.1 15.9 13.6

55.0 66.0 68.0 48.4 28.6

30.2 44.2 46.7 55.0 50.7

52.8 57.9 84.5 91.6 82.9

11.4 8.3 8.4 24.5 23.3 36.1 26.8 24.2 25.3

1.63 2.22 2.19

TABLE 4.3.4—continued

Paints (9)

Pharmaceutical and Soap and other

veterinary products (13) detergents (11) Cosmetics and toilet preparations (11)

Ratios

Profitability Operating profit/Funds employed

Operating profit/Sales . .

Capital Structure Paid-up capital/Funds employed .

Borrowed money/Funds employed

Balance of funds/Funds employed

Working capital/Funds employed

Fixed assets/Funds employed .

Sales Depreciation/Sales . . .

Stock on hand/Sales . . .

Trade debtors/Sales . . .

Sales/Funds employed . .

Q i M Q3 Q l M Q3 Q1

1971-72 5.1 9.3 23.9 6.1 24.5 46.8 12.7

1972-73 14.0 16.5 23.4 7.6 23.3 40.0 4 .7

1973-74 9.9 13.6 19.8 10.2 16.8 26.6 7.1

1971-72 2.3 6.3 9.5 5.7 13.9 22.8 4 .5

1972-73 2.9 9.0 11.9 4.1 14.2 18.9 1.5

1973-74 5.9 7.3 10.8 5.2 10.7 18.3 1.8

1971-72 18.8 31.3 60.4 20.1 31.5 89.2 18.9

1972-73 16.4 29.5 53.6 18.1 50.1 67.7 12.3

1973-74 16.9 25.9 39.1 20.3 40.9 58.7 10.9

1971-72 — 16.8 33.2 — 11.4 71.6 2 .9

1972-73 0.9 16.5 67.3 — 8.7 66.8 3.7

1973-74 15.9 32.1 74.0 — 19.1 34.7 10.0

1971-72 1.4 44.8 67.8 - 1 7 .7 37.4 78.9 - 9 . 4

1972-73 8.5 45.4 69.4 - 2 2 . 2 39.7 73.6 16.7

1973-74 9.1 41.9 68.2 10.6 50.0 62.8 25.4

1971-72 16.5 51.9 55.3 36.3 44.9 61.3 30.9

1972-73 40.4 51.6 65.8 32.0 43.9 57.6 16.6

1973-74 44.5 54.7 64.4 41.8 47.5 58.6 28.6

1971-72 44.7 48.1 83.5 38.7 55.1 63.7 31.6

1972-73 34.2 48.4 49.6 42.4 56.1 68.0 32.5

1973-74 35.6 45.3 55.5 41.4 52.5 58.2 28.7

1971-72 1.3 1.9 - 2 .2 0.8 2 .0 3.4 1.1

1972-73 1.2 1.7 2 .2 1.5 2 .5 3 .2 1.1

1973-74 1.2 1.5 1.8 1.3 2 .7 4.2 0 .8

1971-72 15.5 18.4 20.7 14.1 25.8 39.8 11.9

1972-73 15.2 19.3 23.2 12.9 23.0 31.0 10.9

1973-74 18.3 26.1 29.1 24.0 33.1 44.9 13.9

1971-72 14.3 18.1 20.5 12.9 20.7 29.7 10.0

1972-73 15.9 18.7 22.4 16.9 21.0 22.9 11.3

1973-74 15.1 18.0 28.6 20.5 21.6 29.9 14.5

1971-72 1.33 2.03 3.63 1.21 1.63 2.29 2.04

1972-73 1.39 2.14 2.62 1.35 1.65 2.14 2.03

1973-74 1.23 2.01 2.29 1.13 1.57 1.98 2.15

M Q3 Q1 M Q3

19.4 20.3 20.1 6.8

8.6 5 .4

30.5 25.3 24.2 19.1

32.7 22.3 42.5 50.9

53.5 50.4 55.2

58.9 49.6 44.8 41.1

1.2 1.4 1.1 16.7

16.4 18.3 16.6 17.1

19.6 2.68 3.16 3.22

25.2 25.6 25.2 10.6

12.6 12.7

64.1 35.7 40.3 39.9

41.1 40.4 57.8 63.8

70.9 68.4 67.5 71.3

69.1 83.4 71.4

1.7 2.1 1.8 19.8 22.7 23.9 22.3 24.0 24.2

3.31 3.38 3.76

19.8 10.9 11.3 7.5

7 .2 7 .2

2.0 7 .6 6.4

46.0 8.7 38.1 47.9 45.6

45.1 27.3 26.1 16.5

0.9 0 .7 0. 6 19.3

18.3 25.2 15.1 13.1

15.9 1.90 1.57 1.17

33.4 28.1 27.6 14.2

12.8 13.5

10.3 15.5 16.1 19.2 27.9

10.2 63.0 60.0 69.2

67.4 64.6 68.8 32.6

35.4 31.2

1.1 1.5 0.8 24.8 20.8

29.4 18.0 19.5 25.9

2.21 2.04 2.26

39.6 46.4 43.8 18.2

19.7 15.8

17.2 32.6 27.2

49.0 48.4 58.1 82.8

83.3 82.5 72.7 73.9

83.5 52.1 54.4 54.9

1.8 2.2 1.7 31.1

33.3 40.9 20.5 29.9

32.8 2.6 2.70 2.93

TABLE 4.3.4—continued

Petroleum refining,

Other chemicals and petroleum and coal Glass and glass

related products (.9) products (9) products (9) Clay products (19)

M Q3 Q1 M Q3

P rofitability Operating profit/Funds employed 1971-72 7.8 16.7 28.6 5.1 11.0 26.0 6.3

1972-73 10.1 15.4 21.5 3.9 10.5 30.8 7.0

1973-74 8.5 11.5 26.0 - 0 . 2 9.4 27.8 4.7

Operating profit/Sales . . 1971-72 4.0 11.7 14.4 7.5 10.9 19.8 3.9

1972-73 4.4 11.9 14.5 8.3 11.0 20.6 4.4

1973-74 5.5 6.7 13.0 - 0 .3 7.2 22.8 0.7

Capital Structure Paid-up capital/Funds employed . 1971-72 2.7 38.7 132.7 16.9 33.6 44.4 14.3

1972-73 2.6 29.4 130.0 14.6 25.4 42.7 1.7

1973-74 1.9 21.4 115.0 14.6 21.5 44.3 1.0

Borrowed money/Funds employed 1971-72 — 27.0 61.8 2.7 29.4 47.9 —

1972-73 1.3 42.5 74.6 ___ 20.4 49.0 9.3

1973-74 23.4 37.4 75.1 — 6.7 46.9 12.1

Balance of funds/Funds employed 1971-72 -4 6 .9 -1 2 .0 83.4 7.7 35.6 75.0 8.2

1972-73 - 5 4 .4 - 5 .5 88.9 8.3 46.7 73.2 30.1

1973-74 -4 6 .3 15.0 64.0 8.8 45.3 78.5 0.5

Working capital/Funds employed 1971-72 26.0 56.9 73.6 4.7 17.2 29.5 21.5

1972-73 31.3 56.7 71.7 3.3 33.5 41.0 21.4

1973-74 42.8 58.3 76.3 6.6 33.8 44.7 14.9

Fixed assets/Funds employed . 1971-72 26.4 43.1 74.0 70.5 82.8 95.3 41.5

1972-73 28.3 43.3 68.7 59.0 66.5 96.7 33.8

1973-74 23.7 41.7 57.2 55.3 66.2 93.4 32.7

Sales Depreciation/Sales . . . 1971-72 1.1 1.9 2.4 5.6 7.2 25.9 0.7

1972-73 1.3 2.0 2.9 5.0 6.5 22.9 1.0

1973-74 1.1 1.6 2.6 4.0 5.5 20.2 1.1

Stock on hand/Sales . . . 1971-72 22.3 23.7 27.8 6.5 12.4 15.1 8.6

1972-73 14.2 23.9 39.0 7.1 12.7 13.8 7.5

1973-74 19.3 24.8 29.6 9.4 10.4 16.8 16.2

Trade debtors/Sales . . 1971-72 15.2 23.4 25.3 7.5 22.7 58.6 7.5

1972-73 15.1 22.6 32.7 1.7 21.7 90.0 9.3

1973-74 17.8 23.0 27.6 2.4 22.2 86.8 12.9

Sales/Funds employed . . 1971-72 1.27 1.73 4.57 0.41 1.13 1.50 1.19

1972-73 1.15 1.79 1.99 0.42 1.10 1.60 1.25

1973-74 1.38 1.54 2.40 0.37 1.39 1.91 0.84

9.3 43.9

10.4 57.4

7.7 15.2

5.9 19.2

8.0 16.9

7.9 11.6

26.0 60.9

18.1 44.6

26.2 63.3

17.5 65.8

32.8 55.0

35.7 67.3

39.1 60.2

34.2 69.1

31 7 54.9

36.5 58.5

41.8 66.2

29.5 67.3

63.5 78.5

58.2 78.6

70.5 85.1

3.1 8.6

2.6 5.9

2.9 6.5

17.1 26.4

20.1 33.9

27.8 34.5

17.0 22.7

18.1 26.5

16.3 25.3

1.59 1.99

1.41 3.40

1.40 3.20

8.3 11.0 19.7

5.2 15.4 18.2

2.6 10.5 16.3

8.7 9.8 15.8

7.3 13.0 15.9

3.4 10.4 13.9

13.3 26.6 50.5

10.6 32.4 49.6

14.4 21.8 41.0

4.5 20.1 34.9

8.4 18.3 67.6

14.5 24.5 56.7

6.4 44.4 62.8

5.1 28.2 65.7

13.6 32.7 53.3

13.1 22.5 39.2

14.3 27.2 38.8

17.7 25.9 35.0

60.8 77.5 86.9

61.2 72.8 85.7

65.0 74.1 82.3

4.3 5.1 6.7

3.2 4.6 5.7

3.2 3.8 5.6

13.6 19.5 26.9

11.0 14.8 22.0

10.5 16.5 25.5

12.5 14.1 24.9

15.3 17.4 25.0

13.3 20.3 22.6

0.66 0.97 1.40

0.66 0.98 1.62

0.82 1.06 1.54

TABLE 4.3.4—continued

Ratios

Cement, concrete and Basic metal Fabricated metal Motor vehicles, bodies,

other products (19) products (19) products (19) trailers and caravans (9)

Q1 M Q3 Q1 M Q3 Q1 M Q3 Q1 M Q3

P rofitability Operating profit/Funds employed 1971-72 7.9 14.3 19.2 6.2 10.8 16.4 7.2 11.4

1972-73 9.7 13.3 17.2 6.9 10.3 16.1 10.5 13.1

1973-74 2.2 11.5 16.1 7.7 12.4 17.0 10.3 13.7

Operating profit/Sales . . 1971-72 3.6 8.7 15.9 3.8 7.9 11.6 4.7 7.4

1972-73 3.5 9.0 13.0 3.5 7.5 14.5 5.8 8.1

1973-74 0.7 7.7 9.8 5.6 9.7 14.4 6.5 7.8

Capital Structure Paid-up capital/Funds employed . 1971-72 21.0 32.2 44.6 15.5 31.2 58.7 23.7 30.3

1972-73 20.7 29.5 40.6 14.6 28.1 56.7 22.8 30.7

1973-74 19.1 30.9 40.1 22.3 35.7 55.7 18.7 23.7

Borrowed money/Funds employed 1971-72 4.1 27.4 33.6 13.7 28.8 56.9 28.4 34.5

1972-73 20.5 31.1 47.9 10.5 30.0 52.3 21.1 31.4

1973-74 6.0 26.3 42.7 10.8 30.3 54.9 21.7 33.7

Balance of funds/Funds employed 1971-72 26.3 46.3 58.4 3.9 33.6 46.6 21.7 36.4

1972-73 11.5 33.4 58.8 11.0 26.7 47.7 22.3 40.1

1973-74 23.3 42.1 60.9 4.4 22.8 42.3 33.4 43.8

Working capital/Funds employed 1971-72 17.7 31.2 41.5 17.5 37.4 54.6 41.6 53.0

1972-73 25.8 37.5 47.6 17.9 33.7 54.7 42.5 50.1

1973- 74 20.4 27.3 56.2 21.6 35.6 55.1 40.4 50.0

Fixed assets/Funds employed . 1971-72 58.5 68.8 82.3 45.4 62.6 82.5 42.8 47.0

1972-73 52.4 62.5 74.2 45.3 66.3 82.1 45.0 49.9

1973-74 43.8 72.7 79.6 44.9 64.4 78.4 41.9 50.0

Sales Depreciation/Sales . . . 1971-72 2.8 3.9 ' 8.0 2.3 2.8 6.0 1.3 1.7

1972-73 1.5 3.6 4.9 2.4 3.7 5.6 1.2 1.7

1973-74 2.4 3.4 5.4 1.8 3.6 7.3 1.0 1.4

Stock on hand/Sales . . . 1971-72 4.5 15.3 21.0 17.0 24.1 28.1 18.0 23.1

1972-73 3.6 12.3 15.6 14.5 19.6 26.7 19.8 22.0

1973-74 3.4 13.1 18.8 15.2 18.7 25.7 22.5 24.3

Trade debtors/Sales . . . 1971-72 14.3 19.6 22.4 11.6 14.1 19.0 14.8 18.7

1972-73 18.6 22.8 28.9 11.9 14.6 28.3 14.9 20.0

1973-74 19.4 22.1 26.9 11.7 14.1 23.8 15.7 20.0

Sales/Funds employed . . 1971-72 0.94 1.36 2.36 0.85 1.63 2.08 1.26 1.63

1972-73 1.09 1.48 2.56 0.90 1.38 2.13 1.30 1.67

1973-74 1.05 1.34 2.06 0.99 1.67 2.53 1.46 1.78

14.5 - 2 0 .6

17.9 - 5 . 3

18.5 3.5

10.3 - 3 .3

10.1 - 2 .1

9.6 1.3

32.7 15.1

39.9 15.9

36.1 10.7

38.7 1.6

41.6 6.2

42.1 9.5

42.5 - 2 2 .2

46.2 14.3

49.2 0.0

57.2 11.7

55.0 25.2

58.1 40.9

58.4 32.6

57.5 30.7

59.6 26.2

3.1 0.9

2.8 0.5

3.4 0.6

27.5 19.4

27.5 22.0

26.2 24.1

23.5 2.7

23.2 4.6

23.4 8.1

2.24 1.56

2.17 1.74

1.98 1.70

1.2 13.1

5.0 14.7

8.8 11.1

0.6 6.1

2.3 4.7

3.8 5.2

22.2 101.6

25.6 70.6

18.9 46.0

24.8 29.8

15.1 39.8

37.7 94.8

46.5 59.1

49.8 62.0

42.4 58.6

42.2 67.4

43.8 69.3

64.9 73.8

57.8 88.3

56.2 75.8

35.1 59.1

2.0 4.3

2.0 3.1

1.3 2.1

31.0 41.3

26.9 33.9

36.9 43.9

10.1 12,4

9.0 17.1

11.7 18.9

2.43 5.25

2.61 4.64

2.39 3.05

TABLE 4.3.4—continued

Motor vehicle instruments Other transport Photographic, professional and

parts and accessories (19) equipment (9) scientific equipment (9)

Ratios Q1 M Q3 Q1 M Q3 Q1 M Q3

Profitability Operating profit/Funds employed 1971-72 9 .5 13.6 2 1 .6 - 1 4 . 4 2 .6 10.7

1972-73 15.6 2 0 .0 2 8 .2 - 3 6 . 5 0 .8 9 .0

1973-74 11.2 15.1 2 4 .5 - 8 5 . 7 - 9 . 3 14.2

Operating profit/Sales . . 1971-72 4 .8 9 .8 11.4 - 7 . 7 1 .0 4 .5

1972-73 6 .9 10.8 12.7 - 4 . 1 0 .8 6 .9

1973-74 5 .0 8 .9 11.3 - 8 . 1 - 3 . 8 2 .1

C apital Structure Paid-up capital/Funds employed . 1971-72 12.9 2 4 .0 28.1 3 .8 2 8 .2 46.1

1972-73 18.4 2 5 .0 2 6 .9 1 .2 14.9 30.8

1973-74 11.2 2 1 .0 2 6 .4 1 .5 2 7 .4 8 2 .6

Borrowed money/Funds employed 1971-72 11.9 2 7 .8 37.3 10.0 2 8 .4 8 0 .7

1972-73 13.9 2 1 .3 2 8 .9 7 .9 50.1 8 7 .8

1973-74 16.6 23.1 3 4 .2 9 .4 17.9 109.9

Balance of funds/Funds employed 1971-72 3 9 .7 47.1 6 0 .0 0 .2 4 8 .4 61.1

1972-73 4 0 .4 4 8 .6 5 8 .6 4 .4 27.1 6 6 .4

1973-74 42.3 51.5 6 2 .4 - 4 4 . 1 2 5 .0 57.1

Working capital/Funds employed 1971-72 4 3 .3 5 1 .0 55.1 0 .8 3 0 .8 80.5

1972-73 3 7 .6 4 6 .0 53.9 - 5 . 5 2 3 .3 9 6 .5

1973-74 3 9 .0 5 0 .7 62.3 - 8 0 . 6 2 4 .9 8 9 .4

Fixed assets/Funds employed . 1971-72 4 4 .9 4 9 .0 5 6 .6 19.5 6 9 .2 9 9 .2

1972-73 46.1 5 4 .0 6 2 .4 3 .5 7 6 .7 105.5

1973-74 37.7 4 9 .3 6 1 .0 10.6 75.1 180.6

Sales Depreciation/Sales . . . 1971-72, 1.7 2 .5 3 .0 1 .0 1 .6 2 .4

1972-73 1 .6 2 .3 3 .0 0.1 2 .1 2 .7

1973-74 1 .5 2 .4 3 .4 0 .7 1 .4 2 .4

Stock on hand/Sales . . . 1971-72 19.8 2 6 .0 2 9 .5 7 .2 9 .4 74.1

1972-73 16.0 21.1 2 6 .8 1 .5 6 .0 3 1 .0

1973-74 2 0 .2 2 6 .5 31.3 2 .1 14.1 2 9 .8

Trade debtors/Sales . . . 1971-72 13.0 18.2 20.1 4 .7 12.6 2 1 .6

1972-73 15.2 18.2 2 1 .0 5 .7 16.7 2 3 .5

1973-74 15.8 18.6 2 0 .5 9 .3 12.8 2 0 .8

Sales/Funds employed . 1971-72 1.39 1.77 2 .2 5 1.09 2 .3 8 8.13

1972-73 1.52 2.18 2 .5 9 1.02 2 .3 2 4 .6 4

1973-74 1.45 1.82 2 .2 4 2.49 3.39 10.21

13.3 1.9 6 .9

1.8 0 .9 6.2

2 .5 9 .7 2 .7

0. 0

0. 0 3 .6

6 .4 14.2 2 8 .0 3 2 .0

6 1 .6 4 9 .8 2 5 .0 2 3 .3

18.2

0 .5 0 .5 0 . 6

8 .9 8 .7 2 4 .6 14.4 17.4 18.4

1.47 1.77 1.44

16.2 2 6 .5

2 4 .5 38.1

14.8 2 7 .2

7 .3 13.9

8 .7 16.8

8 .2 11.2

18.6 3 5 .0

2 7 .6 3 2 .7

14.5 4 0 .7

2 1 .0 5 2 .9

41.1 53.1

15.5 69.3

5 2 .5 8 8 .2

4 9 .2 8 1 .9

5 8 .9 8 6 .0

64.1 7 5 .0

71.3 7 6 .7

7 3 .6 8 1 .8

3 5 .9 6 8 .0

2 8 .7 3 8 .4

2 6 .4 5 0 .2

1.3 2 .5

1.3 2 .0

1 .4 1 .9

2 8 .5 3 1 .8

2 5 .7 3 9 .0

31.8 6 0 .7

2 1 .0 3 3 .3

2 0 .0 2 4 .2

2 0 .3 26.1

2 .0 0 5 .5 2

1.99 5 .1 8

1.68 2 .2 5

TABLE 4.3.4—continued

Appliances and electrical Industrial machinery and Leather and leather

equipment (19) equipment (19) products (13)

Ratios Q1 M Q3 Q1 M Q3 Q1 M Q3

P rofitability Operating profit/Funds employed 1971-72 8.9 11.7 14.4 8.9 11.7 18.6

1972-73 9.8 13.2 20.6 10.0 13.1 25.4

1973-74 6.4 12.6 15.0 9.6 12.6 20.2

Operating profit/Sales . . 1971 72 4.2 5.9 8.4 5.3 7.1 10.9

1972-73 5.1 6.3 9.7 4.9 8.1 10.4

1973-74 4.3 5.9 8.4 6.3 8.2 11.3

Capital Structure Paid-up capital/Funds employed . 1971-72 16.6 23.6 32.8 16.8 23.6 40.9

1972-73 16.2 29.5 43.0 12.8 24.2 38.1

1973-74 16.6 21.6 36.2 12.9 20.6 27.2

Borrowed money/Funds employed 1971-72 16.0 32.2 57.1 16.4 26.0 32.2

1972-73 9.5 25.7 43.5 14.1 35.5 38.4

1973-74 18.5 28.7 56.8 8.3 28.9 33.0

Balance of funds/Funds employed 1971-72 19.6 43.2 55.4 26.7 48.9 61.8

1972-73 24.3 32.5 48.6 28.0 43.6 63.2

1973-74 26.9 48.8 55.4 36.3 53.7 64.5

Working capital/Funds employed 1971-72 51.7 61.2 74.6 48.7 63.9 71.6

1972-73 43.8 58.3 65.1 50.0 58.3 73.2

1973-74 50.4 60.7 73.5 52.5 66.2 79.0

Fixed assets/Funds employed . 1971-72 25.4 38.8 48.3 28.4 36.1 51.3

1972-73 34.9 41.7 56.2 26.8 41.7 50.0

1973-74 26.5 39.3 49.6 21.0 33.8 47.5

Sales Depreciation/Sales . . . 1971-72 1.6 1.8 2.9 1.0 1.5 2.0

1972-73 1.6 1.9* 2.8 1.2 1.5 1.8

1973-74 1.2 1.8 2.5 0.8 1.3 2.0

Stock on hand/Sales . . . 1971-72 21.0 25.1 30.6 18.2 31.9 36.2

1972-73 18.5 21.4 28.8 17.2 28.7 33.1

1973-74 24.5 29.4 37.2 25.0 35.0 45.8

Trade debtors/Sales . . . 1971-72 15.5 19.7 28.3 17.6 21.9 27.5

1972-73 15.4 19.1 28.4 17.3 22.6 28.3

1973-74 14.1 21.5 26.7 17.9 25.0 34.3

Sales/Funds employed . . 1971-72 1.49 1.89 2.97 1.42 1.69 2.03

1972-73 1.79 2.07 3.06 1.58 1.74 2.33

1973-74 1.50 1.98 2.17 1.31 1.50 2.13

6.4 4.8 5.1 3.3

2.5 1.8

6.7 9.7 6.7 16.5

8.7 7.6 25.8 9.4

31.0 31.8 9.2 30.5

31.4 45.5 29.6

1.0 0.9 0.8 9.1

8.7 5.7 11.2 5.9 11.4

1.25 1.40 1.37

10.3 8.5 10.4 6.6

4.7 4.7

14.5 14.3 22.4 38.0 40.2

28.5 35.2 41.3 47.9 49.4

44.3 44.3 50.6 55.7

55.7

1.5 1.3 1.1 20.4 14.9 18.4 18.6 15.1 16.1

2.09 2.12 3.13

23.2 29.1 18.2 9.8

9.5 10.5

35.3 34.1 33.4 66.7

80.9 47.3 59.5 58.8

64.9 68.6 54.5

70.4 68.2 90.8 69.5

1.8 1.7 1.5 25.2 26.3 26.5 22.8 25.6 46.6

4.83 4.93 5.61

TABLE 4.3.4—continued

Profitability Operating profit/Funds employed

Operating profit/Sales . .

Capital Structure Paid-up capital/Funds employed .

Borrowed money/Funds employed

Balance of funds/Funds employed

Working capital/Funds employed

Fixed assets/Funds employed .

S ales Depreciation/Sales . . .

Stock on hand/Sales"1. . .

Trade debtors/Sales . . .

Sales/Funds employed . .

1971-72 3.3 8.2

1972-73 1.1 11.3

1973-74 4.0 14.4

1971-72 2.4 6.6

1972-73 0.8 7.7

1973-74 2.7 5.9

1971-72 13.7 33.6

1972-73 10.7 36.6

1973-74 11.1 36.6

1971-72 14.0 25.6

1972-73 7.0 24.9

1973-74 19.0 30.5

1971-72 1.1 26.9

1972-73 - 1 . 4 42.1

1973-74 - 3 . 4 33.0

1971-72 40.8 52.3

1972-73 46.7 56.9

1973-74 41.6 51.3

1971-72 38.7 47.7

1972-73 37.1 43.1

1973-74 38.6 48.7

1971-72 1.0 3.0

1972-73 1.5 3.0

1973-74 1.2 2.3

1971-72 18.3 25.5

1972-73 16.2 18.6

1973-74 16.3 19.6

1971-72 17.9 20.9

1972-73 19.1 22.1

1973-74 15.8 18.2

1971-72 1.25 1.44

1972-73 1.25 1.51

1973-74 1.39 1.82

21.0 9.4 15.8

20.4 11.9 16.5

22.1 10.5 17.1

15.7 7.4 9.2

14.6 6.2 9.0

12.5 7.2 10.0

54.9 23.0 33.3

44.0 18.3 32.9

50.2 13.1 25.6

58.5 9.6 30.4

50.8 13.7 30.2

53.2 16.3 33.1

55.0 23.9 41.1

59.2 23.7 39.1

57.1 20.3 49.0

61.3 30.1 41.9

62.9 33.0 43.5

61.4 35.2 44.2

59.2 43.1 58.1

53.3 42.0 56.5

58.4 36.8 55.8

3.8 2.7 3.1

3.8 2.3 3.1

3.0 1.8 2.4

27.0 18.4 22.9

27.8 14.5 18.3

29.6 14.7 25.7

28.8 18.3 20.8

30.3 20.2 22.2

23.8 17.9 21.1

1.94 1.31 1.54

1.97 1.33 1.77

3.25 1.35 1.73

22.4 7.4

22.0 8.6

28.9 11.1

12.4 5.4

12.0 4.8

12.8 7.8

44.3 5.0

43.3 11.1

39.1 9.9

32.8 1.3

42.4 2.6

39.8 8.2

54.2 6.1

56.7 25.6

54.4 25.7

56.9 47.9

58.0 48.5

63.2 52.9

69.9 27.2

67.0 20.6

64.8 14.6

4.2 1.1

4.2 0.7

4.0 0.5

27.0 20.9

23.1 18.0

31.0 24.1

24.2 10.4

24.8 12.8

23.0 14.5

2.00 1.48

2.04 1.42

2.00 1.43

13.9 27.6

15.0 19.2

15.3 26.3

8.1 11.2

7.0 11.1

8.5 11.9

17.0 39.9

22.7 46.6

17.1 31.9

19.7 51.8

19.4 42.4

36.9 50.2

57.1 73.0

51.0 72.1

53.6 67.0

60.4 72.8

60.1 79.4

66.7 85.4

39.6 52.1

39.9 51.5

33.3 47.1

1.4 2.1

1.4 2.1

1.3 1.8

25.0 33.3

25.9 34.2

28.6 37.3

13.9 21.3

18.3 25.0

18.0 27.6

1.91 2.50

1.81 2.95

1.80 2.41

For explanations and definitions refer to paragraphs 6 to 12 of Appendix 4.3.

TABLE 4.3.6: IN D U STR Y CLASSIFICATION: RELATIONSHIP TO ASIC

ASIC

Industry classification

Food, Beverages and Tobacco . . Meat products . . . .

Milk products . . . . .

Fruit and vegetable products . .

Margarine, oils and fats, n.e.c. . .

Flour and bread products . . .

Raw and refined sugar . . .

Confectionery and cocoa products . Food products, n.e.c. . . .

Beverages and m alt . . . .

Tobacco products . . . .

Te x t i l e s .......................................................

Textiles, yarns and woven fabrics . Rope, cordage and twine . . .

Floor coverings and other textile products

Clothing and F ootwear . . . .

Knitting mills and clothing . . .

Footw ear . . . . . .

Wood, W ood P roducts and F urniture . Timber milling, veneers and boards . .

Wooden products and joinery . . .

Furniture and mattresses . . . .

Paper and Paper P roducts, P rinting . Paper and paper products . . .

Printing and publishing . . . .

Chemical, Petroleum and Coal P roducts Basic chemicals . . . . .

Paints . . . . . . .

Pharmaceutical and veterinary products . Soap and other detergents . . .

Cosmetics and toilet preparations . .

Other chemical and related products . .

Petroleum refining, petroleum and coal products

Ν ον-metallic M ineral Products . . Glass and glass products . . . .

Clay products . . . . . .

Cement, concrete and other products . .

Basic M etal Products . . . .

F abricated M etal P roducts . . .

T ransport Equipment . . . .

M otor vehicles, bodies, trailers and caravans M otor vehicle instruments, parts and accessories Other transport equipment . . .

Sub-division Group Class

21-22

211 All classes

212 All classes

213 All classes

214 All classes

215, 216 All classes

217 All classes

218 2181

218 2182-2184

219 All classes

221 All classes

23

231, 232 All classes

233 2334

233 2331, 2332

2333, 2335

24

241, 242 All classes

243 All classes

25

251 2511-2513

251 2514-2516

252 All classes

26

261 All classes

262 All classes

27

271 All classes

272 2722

272 2723

272 2725

272 2726

272 2721, 2724

2727, 2728

273, 274 All classes

28

281 All classes

282 All classes

283, 284 All classes

29 291-293 All classes

31 311-313 All classes

32

321 3211, 3212

321 3213, 3214

322 All classes

213

TABLE 4 .3 .6 —continued

Industry classification

ASIC

Sub­ division Group Class

O t h e r M a c h i n e r y a n d E q u i p m e n t . . . .

Photographic, professional and scientific equipment . . 33

331 All classes

Appliances and electrical equipment . . . . 332 All classes

Industrial machinery and equipment . . . . 333 All classes

M i s c e l l a n e o u s M a n u f a c t u r i n g . . . .

Leather and leather p r o d u c ts ...................................

. 34

341 All classes

Rubber p r o d u c t s .................................................... 342 All classes

Plastic and related p r o d u c t s ................................... 343 All classes

Other m a n u fa c tu rin g ............................................ 344 All classes

214

R74/2685