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Tuesday, 23 August 1983
Page: 73

Question No. 22

Mr Rocher asked the Minister for Primary Industry, upon notice, on 3 May 1983:

(1) What level of assistance is provided by the Government to the Australian tobacco growing industry.

(2)What is the annual cost of assistance to (a) taxpayers and (b) consumers of tobacco products.

(3) Is it intended to continue assistance to the industry; if so, why.

Mr Kerin —The answer to the honourable member's question is as follows:

(1) Tobacco growers benefit from general assistance measures available to all primary producers, and also from Government assistance to the joint industry/ Commonwealth tobacco research scheme which is similar to schemes applying to a number of other rural industries. In 1982-83 approximately $600,000 will be provided for this purpose.

The Industry is also assisted by a joint State/Commonwealth stabilisation scheme which is administered by the Australian Tobacco Board and under which quota tobacco leaf is sold at a pre-determined reserve price. These marketing arrangements are supported by tariffs and by-law concessions on imported tobacco leaf and products.

(2) (a) The cost to taxpayers in 1982-83 of the joint industry/Commonwealth tobacco research scheme will be about $600,000.

(2) (b) The IAC has estimated that in 1980-81 the cost penalty to manufacturers of using Australian tobacco leaf under existing marketing arrangements was $29. 6m. On this estimate, if existing marketing arrangements were dismantled and if manufacturers passed on the full amount of the reduced costs, consumers of tobacco products could save $29.6m. This amounts to approximately one cent per packet.

(3) Following careful and detailed consideration of the IAC report on the Australian tobacco industry, the Government has decided to implement a further 5 year stabilisation plan for the tobacco industry. While basic tariff and by-law provisions will be retained, the new stablisation scheme will include measures designed to rationalise the tobacco growing industry and ensure a narrowing of the margin between Australian and international leaf price over the period of the plan.

These measures will enable the gradual reduction of protection to the industry but without imposing unnecessary hardship upon growers.