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Thursday, 20 November 1986
Page: 2569

Senator GRIMES (Minister for Community Services)(10.06) —I move:

That the Bill be now read a second time.

I table the explanatory memorandum and I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

This Bill proposes a continuation of the bounty assistance on Australian book production for the next three years until 30 June 1989. It replaces the current bounty legislation which is due to terminate on 31 December 1986.

Bounties have been paid on certain Australian book production since 1969 in order to assist the Australian printing industry compete with overseas book printers.

This particular industry is assisted by means of a bounty because, although not a signatory, the Government adheres to the spirit of the Florence agreement which precludes the imposition of tariffs on books containing educational, scientific or cultural material.

The assistance arrangements for the next three years follow the Government's consideration of the Industries Assistance Commission recommendations contained in its report No. 377 of 20 December 1985 on book production.

In its report the IAC concluded that the sector of book production activity which is assisted receives a level of assistance comparable with that available to other assisted printing activity, but at a high level by comparison with assistance generally afforded other manufacturing activities. The Commission was of the view that assistance to book production should be provided in a manner which, as far as possible, allows the structure of the industry to respond to changes in market conditions, technology, and other factors, unencumbered by government direction. It said that the high level of assistance applying to most categories should be reduced.

The main recommendations contained in the Commission's report were that:

(1) bounty on eligible books be reduced from 25 to 20 per cent of net selling price, that is the selling price less the bounty;

(2) bounty on paper supplied free of charge by publishers to printers for the production of bountiable books be reduced from 20 to 16 2/3 per cent;

(3) bounty eligibility be extended to Australian directories, guides, street directories, road guides and the like and customs duties for those books to which bounty is extended be at minimum rates;

(4) customs duties on other books dutiable at 25 per cent be reduced to 20 per cent.

The Government has accepted the basic thrust of the recommendations of the Commission. However, it has decided to defer the reduction in bounty rates until it has had time to consider the current wide ranging inquiry on the pulp, paper, paper products and printing industries being conducted by the IAC. The Commission's final report is due in February 1987. Book production is included within this inquiry as it is an integral part of the printing industry.

It has however been decided to vary the bounty rate in accordance with the decision announced in the 1986-87 Budget to reduce bounties generally by 20 per cent.

Clause 11 of the Bill therefore provides that under the new scheme eligible books are to be paid a bounty of 20 per cent of the printer's net selling price, that is the selling price less the bounty. Further, in circumstances where publishers supply paper free of charge to printers for the production of bountiable books the bounty rate is to be 16 2/3 per cent of the publishers material costs.

The Government has also decided that bounty eligibility is to be extended to include Australian guides and directories. The exclusion of these goods from the previous bounty scheme has caused considerable administrative problems for the Australian Customs Service and confusion within the industry.

Books published by the Australian Government Publishing Service and books required to be published or printed by State or Territory government printers after 1 January 1987 will no longer be eligible for bounty. This is for the reason that Government publications are usually printed in Australia and are not subject to competition from overseas printers.

In order to simplify the administration of the scheme clause 14 of the Bill provides that only one bounty claim per production run will be allowed. The claim can be lodged by either the publisher or the printer but a minimum value of $200 per title per production run will apply.

It is worth mentioning that imported typesetting in any pre-printed plate form will not disqualify an otherwise eligible publication from bounty. Likewise, books using imported colour separations will continue to be eligible for bounty.

The cost of any process carried out overseas is however to be excluded from bounty calculations.

Clause 4 of the Bill provides that books which, if imported, would be classifiable to a tariff item on which customs duty is payable will not be eligible for bounty. This is proposed to avoid the possibility of a locally produced book being assisted by both a bounty and a tariff.

The Government has also decided that import duties on books currently dutiable at a general rate of 25 per cent will remain unchanged.

Part 4 of the Bill contains provisions which update the previous legislation to improve administrative effectiveness, in line with similar provisions recently introduced in other subsidy and bounty legislation.

The Government is committed to maintaining a healthy and viable book industry in Australia. We believe that the Bill provides the necessary ingredients upon which the industry can build, and provides the industry with an appropriate level of assistance pending the outcome of the Government's decision on its wide ranging review of assistance for the whole paper and printing industries.

Financial Impact Statement

Bounty payments to the book printing industry totalled $18.8 million in 1985-86. Bounty payments for the 6 months to June 1987 are expected to be $7.9m and in 1987-88 $12.7m.

I commend the Bill to the Senate.

Debate (on motion by Senator Kilgariff) adjourned.