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Tuesday, 18 March 1980
Page: 726


Senator Dame MARGARET GUILFOYLE (Victoria) (Minister for Social Security) (5. 1 1 )- I move:

That the Bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

Bounty (Polyester-Cotton Yarn) Amendment Bill 1980

The purpose of the Bill now before the Senate is to give effect to the Government's decision to extend the operation of the Bounty (PolyesterCotton Yarn) Act 1978 until 31 August 1981. The Bounty (Polyester-Cotton Yarn) Act 1978 provides assistance to the manufacture in Australia of polyester-cotton yarn by means of a bounty scheme, providing for the payment to eligible manufacturers of a bounty of $1.15 per kilogram on yarn consisting of a mixture of polyester and cotton fibres, in which the polyester fibres are not less than 50 per cent by weight, being single-fold combed yarn not coarser than 20 tex with at least one ply of 10 tex or coarser. The extension of the operation of this scheme is being made as an interim measure pending consideration by the Government of the final report by the Industries Assistance Commission on the longer-term assistance needs for the textiles, clothing and footwear industries. That report is expected to be received by the Government in March 1980.

In deciding to extend the operation of this scheme the Government was conscious of the need to give at least 12 months advance notice of the policy of assistance that is to apply to these industries so as to assist future planning of operations by importers, retailers and manufacturers. During the extended period of the scheme the amount available for payment of bounty will continue to remain at $600,000.I commend the Bill to honourable senators.

Bounty (Rotary Cultivators) Amendment Bill 1980

The purpose of the Bill now before the Senate is to amend the Bounty (Rotary Cultivators) Act 1 979 to continue the bounty scheme under that Act for a year from the date of royal assent, but at a reduced rate of $20 per kilowatt of the power output of the engine incorporated in the prime mover of a rotary cultivator, hoe or tiller. The limit on the amount available for payment during that period is also to be removed. The Bounty (Rotary Cultivators) Act 1979 presently provides assistance to the manufacture and sale for use in Australia of self-propelled pedestrianoperated rotary cultivators, hoes and tillers. This bounty is payable at the rate of $40 per kilowatt of output of the engine incorporated in the prime mover of the above implements having an Australian content of not less than 60 per cent and the amount currently available for payment of bounty is limited to $60,000 in each 12-month period.

The Bill reflects acceptance by the Government of a recommendation of the Industries Assistance Commission, contained in report No. 227 of 4 October 1979 entitled Certain Engines not exceeding 7.64 kW; Rotary Cultivators; and Tractors having a power of less than 15 kW, that bounty continue to be payable for a further period of 12 months at a reduced rate of $20 per kilowatt of engine power. In its report the Industries Assistance Commission concluded that the bounty should be regarded as short-term assistance only so as to avoid its being seen as a permanent means of assistance and, as such, influencing production and investment decisions.

The Government has accepted the recommendation of the Commission that the rate of bounty be reduced to $20 per kilowatt of engine power because import duties on the major component, that is, the engine, have been reduced with effect from 24 November 1979 from 45 per cent to 40 per cent. This rate will be further reduced to 35 per cent with effect from 24 November 1 980. Additionally, increased tariff protection has been provided to this industry because import duties on pedestrian-operated cultivators have been increased from 22 lh per cent to 25 per cent with effect from 16 January 1980. Provision of the short-term assistance is considered by the Industries Assistance Commission to provide local manufacturers with the opportunity to make any adjustments to production considered necessary in the light of changing market patterns. Additionally, no significant effects are expected to arise from adoption of the proposed assistance levels in respect of rotary cultivators. It is expected that the cost of the revised scheme in a 12 month period will be approximately $20,000. I commend the Bill to honourable senators.

Bounty (Drilling Bits) Bill 1980

The purpose of the Bill now before the Senate is to implement the Government's decision to provide additional short-term assistance to Australian manufacturers of cemented carbide drilling bits with diameters greater than 105 mm which are produced and sold for use with percussion rock drills in Australia. Current assistance is by import duties of 6 per cent general, 2 per cent preferential. Following advice and recommendations by the Industries Assistance Commission in its report No. 224 of 19 September 1979 entitled 'Short Term Assistance to Certain Bits of Cemented Carbides', the Government decided to accord assistance by way of a scheme providing for payment of bounty scaled on the basis of bit size, ranging from $40 for bits exceeding 105 mm but less than 127 mm in diameter, to $160 for bits of 203 mm diameter and above, providing that the Australian content of the bits exceeds 50 per cent.

The bounty, which is payable from 1 October 1979, is intended by the Government to provide short term assistance to Australian manufacturers pending an examination by the Industries Assistance Commission of the long-term assistance requirements of the industry to be included in its report on cutlery, industrial knives and hand tools. That report is expected to be received by 30 June 1981. Because of the short term nature of the proposal, the Bill includes provision for the scheme to terminate on a date to be fixed by the Minister and published in the Gazette, and for the amount available for payment of bounty not to exceed $ 1 50,000 annually. Based on 1979 values, the amount of bounty claimed in a 12 month period would be approximately $30,000. However this is likely to rise as the market expands.

Honourable senators will be interested to note that when the reference was first sent to the Industries Assistance Commission the Australian industry producing these bits was experiencing depressed sales and a declining share of the market. This had resulted from the historical market situation, where local producers did not manufacture larger size bits because of a limited demand. However, between 1976-77 and 1978-79 the Australian market for these bits expanded by about 30 per cent. There was also a shift in demand from the smaller to larger sizes with over 90 per cent exceeding 105 millimetres in diameter. Local manufacture of the larger bits has developed with negative effective tariff protection and consequently imports have supplied about 85 per cent of the Australian market.

The short term assistance will allow the Australian product to be more price competitive with imports which, combined with product development, should enable the Australian industry to increase its output and market share. This will provide an opportunity for this recently established industry to realise its potential, presenting Australia with an opportunity to develop an area of high technological and industrial competence, with export possibilities and the possibility of expansion from hard rock drill bits into exploration bits. I commend the Bill to honourable senators.

Debate (on motion by Senator Grimes) adjourned.







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