Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Nitrogenous Fertilisers Subsidy Amendment Bill 1980
Download PDF ::) 0
80/132
PARLIAMENT
OF
AUSTRALIA
DEPARTMENT
OF
THE
PARLIAMENTARY
LIBRARY
NITROGENOUS
FERTILISERS
SUBSIDY
AMENDMENT
BILL
1980
Date
Introduced:
House: Presented
by:
Purpose
27
August
1980
House
of
Representatives
Hon.
R.V.
Garland,
M.P.,
Minister
for
Business
and
Consumer
Affairs.
Short
Digest
of
Bill
To
extend
the
Nitrogenous
Fertilisers
Subsidy
Scheme by a
further
year,
to
31
December 1981,
at
the
rate
of
$20
per
tonne
of
nitrogen
content.
Background
Under
the
Nitrogenous
Fertilisers
Subsidy Act 1966,
a
subsidy
equivalent
to
$78.74
per
tonne
of
nitrogen·
content
was
paid
on
nitrogenous
substances
used as
fertilisers
or
supplements
to
stock
feed
from August 1966.
The
subsidy
was
paid
not
only
to
domestic
producers
but
also
to
importers,
providing
that
the
products
imported could not
be
supplied
domest i ca
11 y
or
where domestic
prices
were
higher
than
the
prices
of
non-dumped
imports.
The
benefit
was
to
be
passed
on
in
full
to
users,
who
in
the
main
consisted
of
sugar,
rice,
cotton
and
fruit
and
vegetable
producers
and
livestock
industries
based
on
improved
pasture.
The
stated
aims
of
the
subsidy
were
to
reduce
costs
in
major
user
industries,
assist
users
to
compete
in
export
markets,
encourage
the
use
of
nitrogen
in
new
applications
and
encourage
local
production
of
nitrogenous
fertilisers.
The
Nitrogenous
Fertilisers
Subsidy
Scheme
was
the
subject
of
a Report
by
the
Industries
Assistance
Commission
in
September
1975.
The Commission
found
little
justification
for
the
subsidy
for
several
reasons.
It
argued
that
in
traditional
uses,
the
role
of
nitrogen
was
well
accepted
and
would not change
greatly
in
response
to
price
changes.
In
other
areas
of
use,
such as
wheat,
cereals
and
livestock
production,
the
use
of
nitrogen
was
not merely a
function
of
price
but
part
of
the
whole
question
of
the
risks
involved
in
gaining
a
return
on
farm
expenditures.
It
was
felt
that
the
subsidy
did
not
offset
these
risk
factors
as
efficiently
as
the
development
of
better
farm
insurance
schemes
and
taxation
measures
and
might even
hinder
such developments.
80/132
- 2 -
The
Comm.ission
further
argued
that
the
subsidy
also
did
not
appear
to
be
useful
as a form
of
income
support.
Even
in
1975
at
the
rate
of
$78.74
per
tonne,
the
subsidy
on
average accounted
for
only
2%
of
the
costs
of
farmers
using
large
amounts
of
nitrogen
and
1%
of
the
costs
of
the
majority
of
nitrogen
users.
To
the
extent
that
income
support
may
be
warranted
in
some
areas
of
agriculture,
the
Commission contended
that
the
consumption
of
nitrogenous
fertilisers
is
not synonymous with
this
need
for
assistance.
The
subsidy
has
virtually
no
effect
on
export
prices,
which
for
most
agricultural
commodities
tend
to
reflect
world
supply
and
demand.
The Commission
therefore
recommended a
grad
ua 1
---,
phasing
out
of
the
Scheme
over a
peri
ad
from 1975
to
1978.
·J
The
subsidy
could
be reduced
annually
to
$60,
$40
then
$20
per
tonne
before
being
terminated.
This phasing
out
was
designed
to
discourage
any
attempt
to
stockpile.
It
would
also
allow
farmers
to
organise
their
cash flows
to
allow
for
the
subsidy
reduction.
This would have posed problems
at
that
time
since
the
price/cost
ratios
faced by farmers were
not as high as in
recent
times
when, as indexes prepared by
the
B.A.E.
indicate,
high
export
prices
for
many
commodities
have given
some
relief
from
the
cost-price
squeeze.
The
Government announced
in
the
1976-77 Budget
its
adoption
in
principle
of
the
Commission's recommendations
and
the
subsidy
is
being phased
out,
although
over a
much
longer
period.
The
reduction
to
$60
per
tonne took
effect
from
January
1977
and
to
$40
per
tonne from
January
1979.
The
Nitrogenous
Fertilisers
Subsidy Act 1979
authorised
the
reduction
of
the
subsidy
to
its
present
level
of
$20
per
tonne
as from
January
1980.
The
present
proposed
extension
â¢\
of
the
subsidy
for
an
additional
year
is
expected
to
cost
·J
the
Government
$5.5
million.
Provisions
Clause 3 amends
the
Pri nci
pa 1 Act
to
extend
the
termination
of
the
Nitrogenous
Fertilisers
Subsidy
Scheme
from
31 .December
1980
to
31
December 1981.
9 September 1980
Finance,
Industries,
Trade
&
Development Group LEGISLATIVE
RESEARCH
SERVICE
