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Thursday, 28 September 1972
Page: 2187

Mr ANTHONY - The measures set out in the Tariff Proposal which I have just tabled reflect the Government's concern at the possible sociological and other consequences should there be any further reduction in the level of production of small pitch transmission chain by Renold Australia Pty Ltd at its plant at Benalla. The intent of the proposal is to impose tariff quotas on imports of small pitch transmission chain as a holding action for a period of up to 2 years. In recent years imports of chain have reduced the share of the Australian market held by Renold, and earlier this year the company informed the Government that further reductions in output were in prospect with consequential reductions in levels of employment.

Chain production at Benalla is of particular significance to that community. Renold's plant provides employment for a considerable proportion of the manufacturing work force in the area and the spending power of the employees makes an important contribution towards the economic wellbeing of the locality. The Government decided that the whole matter should be examined further and that, if necessary, special action should be taken to alleviate the sociological effects that would result from any further contraction of the chain production activity. Discussions were held in Australia and the United Kingdom with senior personnel of the Renold organisation. It was accepted by the company that its present operations at Benalla were uneconomic, an opinion expressed by the Tariff Board in its report of June 1970 on chain and parts therefor, of iron and steel. However the company has indicated that if additional short term assistance was accorded, it would explore the practicability of restructuring its activities into a viable, economic production unit with normal levels of tariff assistance.

With the possibility of long term viable production being sustained at the Benalla plant the Government decided to introduce tariff quotas to enable the necessary examination to take place. Alternatively, if it is not possible to restructure activities economically and closure is necessary, the holding action provided will permit consideration of alternative measures of assistance to alleviate the consequential sociological effects on the Benalla community.

Tariff quotas which will apply to both complete chain and to parts therefor will be established on the basis of the value of imports during 1971-72 and will provide for imports above quota levels to be subject to additional duties of $8 per kilogram. Quota levels will be set at 60 per cent of base year imports for complete chain which were subject to normal rates of duty. Separate provision will be made for quotas for component parts that are used in assembly production. Chain and component parts of a type eligible for entry under by-law will not be subject to quota limitations. It is proposed to keep under constant review the effect of the tariff quotas during their operation.

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