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Wednesday, 27 September 1972
Page: 1297

Senator McAULIFFE asked the Minister representing the Minister for Shipping and Transport, upon notice:

(1)   Does the new subsidy to shipbuilders represent no actual improvement on the previous subsidy because it is now based on a world price for building a ship and not on the 10 per cent to 15 per cent higher quote received from a British yard.

(2)   Why was the Tariff Board's recommendation that subsidy should be applied to ships built for export if free import of new ships was permitted, rejected.

Senator COTTON The Minister for Shipping and Transport has provided the following answer to the honourable senator's question:

(1)   Under the subsidy scheme operating before 1 June 1972 the maximum subsidy level was 334 per cent of the Australian construction cost. The actual rate for a particular ship was based on the cost of a similar ship built in the United Kingdom, including delivery to Australia. Under the new scheme, the subsidy level ranges from 25 per cent to 45 per cent of the Australian construction cost, according to the gross tonnage of the vessel. Vessels over 4,000 gross tons, therefore, will now attract a higher subsidy than under the old scheme. Some vessels below this size, which did not require subsidy at the previous maximum level would now also attract a higher subsidy. Moreover, subsidy now applies to modification and escalation costs.

(2)   The Tariff Board in its report, did not indicate thatits recommendations in relation to:

(a)   freeimport of new and secondhand ships and

(b)   expansion of subsidy to ship exports were in any way interdependent. On the contrary, the Board made it clear that it considered the abolition of the import prohibition on both classes of ships to be fundamental to its proposals.

(3)   While the Government did not adopt the Tariff Board's recommendation to subsidise ships for export, neither was the Board's recommendation for unrestricted imports of new and secondhand ships accepted.It is not the practice of the Government to provide subsidy on manufactured goods for export. If the Government was to agree to subsidise the construction of ships for export, no doubt there would be many other industries which would seek similar assistance. Moreover the Government took into account the implications for our international trade relations arising from any decision to subsidise exports of manufactured products.

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