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Wednesday, 30 April 1980
Page: 2006

Senator WALSH (Western Australia) - I do not propose to speak to either of the two Bills at great length. They are both supported by the Opposition. The Bounty (Refined Tin) Bill provides for the payment of a bounty of $50 per tonne of refined tin and the phasing out of the pre-existing export controls between now and 1981. At present, the refiners of tin effectively have a captive supply. Producers of tin concentrate may not export the product unless the Australian demand has first been satisfied. The Bill proposes to phase out those export controls and replace them with a bounty of $50 per tonne by 1982. The estimated cost, when the scheme is fully operative, is about a quarter of a million dollars. The Government claims that the new arrangements by way of payment of a bounty ought to be more efficient than the export controls. This seems to me to be a highly credible claim. Although there is only one smelter there are a number of producers. It seems to me to be a matter of common sense that considerable problems would have been associated with exerting export discipline when a number of suppliers was involved.

I want to make only one other comment. I do not know whether the Minister for Special Trade Representations (Senator Scott) will care to respond. I am not pressing him hard for a response. One would expect that in the metal processing industries which have a fairly high energy component Australia would be competitive with most countries. If the situation that applies to metal processing in general also applies to tin, one wonders why the Australian tin industry requires any protection at all.

The second Bill, the Bounty (Penicillin) Bill, provides for the payment of a bounty of $38 and $29 per kilogram on the two grades of penicillin which are produced in Australia and imposes quantitative limits on the amount of bounty which may be paid. In the case of penicillin G the amount is $250,000; and in the case of penicillin V the amount is $650,000. The total cost over five years is expected to be $4.5m. The quantitative limits exceed the amount of bounty which would be payable on the current level of production and therefore they may not be operative; but, if production was to expand, unlikely though that seems, the limits provide a ceiling on the public commitment.

The Industries Assistance Commission report on this industry, which was produced a few years ago, recommended that there be no assistance to the Australian industry. Because it was small it was said it lacked economies of scale and was considered to be inefficient. The Government has decided to maintain a production capacity in Australia. The Opposition supports it on that matter. The final comment I make- perhaps the Minister will care to respond- relates to the provision in the legislation to pay the bounty only to penicillin produced on registered premises. Since it is not a section 96 agreement administered through the State, one wonders whether the Commonwealth has the constitutional power to pay production bounties on that sort of selective basis. If the Government has any comment to make on that question, I would appreciate it if the Minister mentioned it in his reply.

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