Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Howard goes half way on ship bounty: fails to match labor.

Download WordDownload Word





The Hon Simon Crean MP

Shadow Industry and Regional Development Minister

Manager of Opposition Business


8 September 1998






The Prime Minister’s announcement today on the Ship Boun ty is yet another catch-up on Labor policy.


But it also betrays the Coalition’s lack of commitment to the Australian shipbuilding industry by:


* Cutting the Bounty rate from 5 to 3 per cent; and


* Only extending it by another 18 months.


Labor’s Industry Policy, released last week by Kim Beazley, includes an $86m commitment to extend the Shipbuilding Bounty at 5 per cent indefinitely, until the OECD Shipbuilding Agreement, or a similar agreement, is ratified.


Howard’s ‘patchwork under pressure’ response recognises that Labor has the right policy mix. But he hasn't had the vision to go the full distance.


This is hardly surprising.


It was the Coalition that axed the Bounty in August 1996. Only after it became clear that the Senate would reject this measure did the Coalition grudgingly extend the Bounty to June 1999.


Today’s response is just as half-hearted.


It is neatly summed up by the response of the Australian Shipbuilders Association, which makes it clear that Labor’s plan delivers what the industry needs.


“The shipbuilding bounty allocation as proposed by the coalition, does not amount to that proposed by the Labor party , nor has it been proposed that the shipbuilding bounty would continue indefinitely as promised by the Labor party, however it is commendable that the Coalition acknowledges the significant economic impact of Australian shipbuilding exports by incorporating the shipbuilding bounty into the projected budget.”


(Press Statement by Liz Hay, Executive Director, Australian Shipbuilders Association, 8.9.98)


Labor’s initiative shows our strong support for this regionally-based manufacturing industry which has a strong track record and good prospects for job and export growth.


In Tasmania, for example, shipbuilder Incat has grown from nothing to become Tasmania’s largest private sector employer and a major export earner.


However until an international agreement is reached, the industry is being forced to compete against highly subsidised overseas shipbuilders. Overseas measures currently range from subsidies between 9 and 25 per cent to outright import prohibition and loan guarantees.


Labor believes that removal or reduction of bounty assistance should not occur until some agreement on international assistance is struck to end all bounties and similar assistance.


Until then, it is unreasonable to expect Australian shipbuilders to compete with no form of assistance in a highly protected international market.


With a 5 per cent bounty, Australian shipbuilders can compete with these higher sub sidies, but they will find it very hard if the bounty is set at a lower rate.


Labor looks forward to the Prime Minister’s next poll-driven backflip, which will probably involve extending the Book Bounty for the seat of Bendigo. Hopefully this time he will go more than half way.


Further information: Phillip Tardif (02) 6277 4803(w), (0419) 491 166