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Thursday, 17 October 1985
Page: 1489

(Question No. 390)


Senator Chaney asked the Minister for Industry, Technology and Commerce, upon notice, on 6 June 1985:

(1) What will be the effective rate of assistance for advanced metal working machine tools in 1985-86 and 1986-91 as a result of the Government's decision of 30 May 1985.

(2) What will be the effective rate of assistance for standard machine tools for 1985-86 and 1986-91 as a result of the Government's decision of 30 May 1985.


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

Detailed estimates of effective assistance afforded metal-working machine tools over the period of the new bounty arrangements introduced by the Government from 1 July 1985, are not available. The Industries Assistance Commission has however provided as a guide only, the following provisional estimates of effective assistance for metal-working machine tools resulting from the new bounty arrangements:

(1) for advanced metal-working machine tools, the average effective rate in 1985-86 corresponding to the bounty rate of 40 per cent is some 55 per cent. From 1 July 1986 until 30 June 1991, the bounty rate of 35 per cent implies an average effective rate of the order of 45 per cent.

(2) for standard metal-working machine tools, the average effective rate for 1985-86 will be around 35 per cent (corresponding to the initial bounty rate of 30 per cent), falling to an average of some 25 per cent thereafter when the bounty rate is 25 per cent.

The above estimates have been made on the assumption that all other factors, apart from the bounty, remain unchanged from the time the new bounty arrangements were implemented.

The estimates are average rates only, and as such effective rates will, of course, vary between manufacturers of machine tools. The effective rate of assistance afforded the production of a particular machine tool will be affected by a number of factors, including the amount of value added in-house by the manufacturer (the bounty now being paid on the basis of factory cost in-house value-added), the tariff rates applicable to imports of components and other materials used in machine tool manufacture.