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Friday, 11 October 1985
Page: 1116

(Question No. 253)

Senator Chaney asked the Minister for Industry, Technology and Commerce, upon notice, on 8 May 1985:

What is the effective rate of protection for the shipbuilding industry as a result of the Government's policy decision in 1984.

Senator Button —The answer to the honourable senator's question is as follows:

The most recent estimates of effective rates of protection published by the Industries Assistance Commission for manufacturing (including shipbuilding-Australian Standard Industrial Classification number 3241) are for 1981/82.stimates for 1982/83 are currently being finalised and should be available shortly.

The IAC has advised that the impact on the average effective rate of assistance afforded the shipbuilding industry (ASIC number 3241) of the Government's policy decision announced on 11 October 1984, is expected to be relatively small. As a guide only, if the effect of extending the bounty to exports was to increase expenditure in 1985/86 by the full $10m allowed by the legislation, then the level of effective assistance would increase from around 20 per cent to about 25 per cent in 1985/86.

If the assistance level was estimated for only those shipbuilding activities eligible for bounty payments, the rate of assistance for eligible vessels would obviously be unchanged, but a greater proportion of the overall industry output will receive the bounty.

The bounty rate in 1985/86 of 22.5 per cent of the construction costs of vessels (to be reduced to 20 per cent in 1986/87) corresponds to a nominal rate of assistance approximately 29 per cent. This yields an effective rate for bountiable vessels of around 40 per cent.

The effect of the removal of the 2 per cent duty on components used in the construction of ships eligible for bounty on the effective rate, for all practical purposes, is minimal.