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Industry Assistance Commission - Temporary Assistance Authority - Reports - Motor vehicle tyres, 2 January 1975


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THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

1975— Parliamentary Paper No. 11

Industries Assistance Commission Report

Report by the Temporary Assistance

Authority on

MOTOR VEHICLE TYRES

2 JANUARY 1975

Presented pursuant to Statute 11 February 1975 Ordered to be printed 6 March 1975

THE GOVERNMENT PRINTER OF AUSTRALIA CANBERRA 1975

Printed by Ambassador Press, 51 Good Street, Granville, N.S.W.

INDUSTRIES ASSISTANCE COMMISSION REPORT

Motor Vehicle Tyres

The Honourable the Special Minister of State,

The following report is submitted in

accordance with Section 28 of the Industries Assistance Commission Act 1973 in response to the Prime Minister’s reference of 4 December 1974 asking whether it is necessary that urgent

action be taken to protect the Australian industry producing motor vehicle tyres in rela­ tion to the importation of motor vehicle tyres of a kind falling within sub-item 40.11.900 of Schedule 1 to the Customs Tariff 1966-1973.

It is considered that urgent action is necessary to protect the Australian industry producing motor vehicle tyres and that the protection can most appropriately be provided by means of a temporary duty on car and utility tyres and truck and omnibus tyres which fall within tariff sub-item 40.11.900 and statistical codes

112, 203, 214, 134 and 145. Urgent action is not considered necessary in respect to other tyres covered by the reference. The findings of the Authority are stated in

detail on page 6 of this report. The full text of the Prime Minister’s reference initiating this report is contained in Appendix A. The operative rates of duty applying to

imported motor vehicle tyres of a kind falling within tariff item 40.11.900 are shown in detail in Appendix B. In brief the General rate of duty for the tyres under reference is 15 per cent

or, if higher, $0.17 per kg, and the Preferential rate is 6 per cent or, if higher, $0.08 per kg. The public inquiry into the Australian tyre manufacturing industry was held at Canberra on 12 December 1974 and submissions were made by 30 witnesses and written statements were received from a number of interested parties. All six local manufacturers of tyres were represented by the Australian Tyre Manufac­ turers Association and each submitted additional supplementary evidence. Suppliers of raw

materials and The Federated Rubber and Allied Workers Union of Australia supported the tyre manufacturers’ case. Evidence was also received from importers and distributors of tyres. Infor­

mation was also obtained from the Department

of Manufacturing Industry, the Industries Assistance Commission, official publications and from direct contact with interested parties. The following abbreviations are used in this

report: Abbreviation Full Title

A.T.M.A. Australian Tyre Manufacturers

Dunlop

Association Dunlop Australia Limited, Port

Firestone

Melbourne, Victoria Firestone Australia Pty Limited,

Goodrich

Auburn, N.S.W. B. F. Goodrich Australia

Goodyear

Limited, Glen Iris, Victoria The Goodyear Tyre and Rubber

Olympic

Co. (Aust) Ltd, Sydney, N.S.W. The Olympic Tyre and Rubber

Uniroyal

Co. Pty Ltd, Melbourne, Victoria Uniroyal Pty Limited, Salisbury

car tyres

S.A. ' car and utility tyres — statistical

truck tyres codes 112, 203 and 214. truck and omnibus tyres — statistical codes 134 and 145.

Tariff assistance for production of tyres in Australia was last reviewed by the Tariff Board on 30 March 1962. The duties recommended in that report applied in principle until 19 July

1973 when all tariffs were reduced by one quarter. On 8 March 1968 the Tariff Board reported on Pneumatic Rubber Tyres under the Customs Tariff (Dumping and Subsidies) Act

1961-1965. The Board found that tyres had been dumped into Australia, but that the importations had not caused injury or the threat of injury to the Australian tyre industry.

Manufacturers’ requests were channelled through the A.T.M.A. Details of all requests are shown in Appendix D. The A.T.M.A. requested that imports of car tyres and truck tyres be restricted in a twelve

months period to a maximum of 1.66 million units from all sources split into car tyres at 1.53 million and truck tyres at 0.13 million. It also requested that the preferential rates of duty be cancelled and that imports from all sources be

1

dutiable at a rate of 20 per cent ad valorem or 22c per kg whichever is the higher and that tyres in excess of 1.66 million units be dutiable at a rate of 40 per cent ad valorem or 40c per kg whichever is the higher.

These requests were supported by the indi­ vidual tyre manufacturers and by suppliers of raw materials to the tyre industry. Importers and overseas manufacturers opposed the granting of temporary protection

and submitted that imports would fall from November onwards. Representatives of firms importing Michelin tyres requested that import restrictions, if any, should apply only to cross ply tyres because radial tyres, especially steel radials, are not fully supplied from local production. Pirelli Limited considered that no restriction should be placed on tyres having a c.i.f. value of more than $1.50 per kg.

Alan E. Greenway Pty Ltd asked that current by-laws regarding certain racing tyres be maintained.

The Australian Tyre Industry

Motor vehicle tyres are produced in Australia by six manufacturers, Dunlop, Firestone, Good­ rich, Goodyear, Olympic and Uniroyal. One company, Olympic is wholly Australian owned:

Dunlop is predominantly Australian owned; and the remainder are wholly or predominantly overseas owned. With the exception of Uniroyal whose plant is located in South Australia local tyre produc­ tion is concentrated in Sydney and Melbourne The industry has funds invested to a value in excess of $150 million and annual sales exceed­ ing $170 million.

Dunlop, which has two plants in operation (Drummoyne, New South Wales and Monta­ gue, Victoria) indicated to the Authority that the Drummoyne plant was old, the original

advantages of its site have been lost, its pro­ duction levels are now uneconomic and that a decision had been made to concentrate produc­ tion at Montague. The timing for this decision had been complicated by the impact of recent import competition.

The A.T.M.A. said that a total of 16 000 persons are employed by the industry. Each manufacturer supplied details of employment in direct production of motor vehicle tyres. In July

1973 about 9608 were involved in direct pro­ duction and in July 1974 this number had risen to 9934. However, at the end of November 1974 production employment had been reduced by 934 to 9000 persons. This assessment does not

take into account any step down in production by Dunlop at Drummoyne, N.S.W. The production and sale of car and truck tyres accounts for the major activities of the tyre manufacturing companies.

Plant capacity to produce the tyres under reference was not given separately by manu facturers but the A.T.M.A. claimed the six companies could supply virtually the whole oi the domestic market. For obvious reasons, such as very low volume lines, some tyres are not produced locally. The A.T.M.A. further claimed that local producers keep abreast of the latest technical developments applicable to the industry. Textile radial ply tyres were first manufactured in Australia in 1963 and in 1971

Uniroyal commenced production of steel belted radial tyres. The industry claimed to have the capacity and technology to produce all types of textile radial ply tyres. Nearly all manufacturers now have equipment for the production of steel belied radial tyres for cars. The installation of capacity to produce steel belted radial tyres for trucks has been deferred pending further re­ search and development.

There was no evidence in criticism of the quality of locally produced tyres. The local production of car and truck tyres since 1970-71 is shown in Table 1.

T able 1

LOCAL PRODUCTION OF CAR AND TRUCK TYRES (Thousands)

Year Car

Tyres

Truck Tyres Total

1970-71 ........... 7377 564 7941

1971-72 ........... 7298 562 7860

1972-73 ........... 7434 575 8009

1973-74 ........... 7756 614 8370

July-Oct 1973 ........... — 3169

1974 ........... — — 3114

Source: Compiled from information supplied by the Aus­ tralian Bureau of Statistics.

Production remained relatively constant during the period until 1973-74 when an in­ crease from 8.0 million to 8.4 million occured or an increase of almost 5 per cent. However,

production for the period July-October 1974 was about 2 per cent below the figure for the corresponding period in 1973. The A.T.M.A. stated that its relatively stable level of production had only been maintained by manufacturing for stock. Table 2A shows total sales since 1970-71. Table 2B and Table 3 show sales and stock in 1974 compared with

1973.

2

T able 2a

SALES OF LOCALLY PRODUCED CAR AND TRUCK TYRES* (Thousands)

1970-71 1971-72 1972-73 1973-74 July-Nov 1974

7760 8730 8400 8650 3519

* Involves some estimations because of various accounting periods. Source: Compiled from evidence.

Not all manufacturers gave separate evidence for car tyres and truck tyres so that total sales only for these two groups are shown in Table 2A.

During the four complete years sales varied and did not indicate any clear pattern of decline or growth. Even the July to November 1974 period when expressed in annual terms does not

greatly change the picture. Table 2B sets out the monthly sales for July to November 1974 and compares sales for the same period in 1973.

T able 2b

SALES OF LOCALLY PRODUCED CAR AND TRUCK TYRES (Thousands)

Year July Aug Sept Oct Nov Total July-Nov 1973 732 824 757 869 768 3950

1974 752 670 752 670 675 3519

Source: Compiled from evidence.

Sales declined in all months shown in Table 2B during 1974 compared with 1973, except in July. The marketing of tyres falls into two well- defined groups: (a) original equipment sales to

motor vehicle builders; and (b) replacement sales. Almost all original equipment tyres are sourced with local tyre manufacturers and this accounts for more than 2 million car and truck

tyres. All tyre manufacturers submitted financial information covering the production and sale of all types of tyres. This showed that some com­ panies earned low profits or incurred losses,

during the period reviewed, while the remainder at best, achieved below average returns on funds.* The A.T.M.A. said that the ratio of

operating profit to funds employed in the manu­ facture of tyres in Australia during 1973-74 was 6 per cent. The table shows that stocks held in January

1974 were about 30 per cent below those for January 1973. However since the middle of 1974 the position has changed and by Novem­ ber the stocks of tyres exceeded the figure for

November 1973 by more than 50 per cent. Stocks in November 1974 were about 78 per cent higher than at the beginning of the year. In supplementary evidence the A.T.M.A.

stated that stocks of car tyres in June 1974 were 1 185 099 and by the end of October the quantity had increased to 1 781 462 — an in­ crease of 50 per cent. In the same period, the Association stated that stocks of truck tyres in­ creased from 43 305 to 1 22 501 — an increase

of 180 per cent. Tyre manufacturers source most of their raw materials in Australia from manufacturers of synthetic rubber, carbon black, tyre cord fabric, lead wire and chemicals. The evidence suggested that about 1600 people were locally employed

in the manufacture and supply of these basic materials and that the total capital investment involved was about $76 million. While there have been retrenchments in individual com­

panies, in aggregate there had been a steady increase in employment in the manufacture of raw materials since 1971-72. It was expected that there would be a 1 5 per cent reduction in employment by the end of February 1975 based on current trends in the local tyre manu­ facturing industry.

Suppliers of raw materials also gave the Authority information showing that overtime earning had dropped 37 per cent since April 1974 and that the number of mandays com­

pulsory leave in 1974-75 was expected to increase by 250 per cent over 1973-74. Most of the suppliers of raw materials are so

* See Annual Reports of the Tariff Board or Industries Assistance Commission for returns on funds employed by Australian Industries.

T able 3

STOCKS OF LOCALLY MANUFACTURED TYRES· (Thousands)

Year Jan Mar June July Sept Oct Nov

1973 1533 1467 1285 1361 1351 1291 1233

1974 1059 1075 1274 1421 1828 1977 1888

t The quantities in the table include tyres other than car and truck tyres. Source: Compiled from evidence by A.T.M.A.

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heavily dependent on tyre manufacture as an outlet for their own products that any change in the production of tyres immediately flows on to these suppliers.

No information on aggregate production or sales of raw materials was available to the Authority but several companies gave their own details for 1972-73 and 1973-74. The period for July to November 1974, when compared with

1973, showed a marked reduction in orders and sales, particularly since September 1974. One company was faced with the cancellation during July-November of almost 30 per cent of orders

booked.

Imports

The Authority was informed of the trend in imports of tyres of a kind falling with tariff item 40.11.9 as well as the increase in tyres imported with complete motor vehicles. While the reference to the Authority covers only tyres im­ ported separately, it cannot be ignored that any significant change in the volume of complete motor vehicles produced locally will have a direct effect on the market for locally produced tyres.

Details of imports of car and truck tyres under tariff item 40.11.9 and the main countries of origin are set out in Appendix E. These im­ ports are summarised in Table 4.

The total volume of car and truck tyre imports has increased in each of the four com­ plete years shown. The percentage increase between 1972-73 and 1973-74 being 48 per cent. If the rate of imports for the 5 months July to November 1974 were to be maintained

for the whole of 1974-75, imports would total about 4.1 million tyres or about 48 per cent higher than in 1973-74. For the period covered by Table 4 the most

important sources of supply were Japan. Britain. Federal Republic of Germany and the United States of America. The greater percentage in­ crease occurred in imports from the latter

country: imports in 1971-72 were 7057 tyres and for the five months only of 1974-75 totalled more than 260 000 tyres. Imports under by-law have not been an important feature of the tyre market, except during the first five months of 1974-75 when a limited number of tyres were approved for duty free admission by the local vehicle builders. The A.T.M.A. was critical of this decision primarily because of the reduction in demand for tyres

as original equipment. As these imports have been ordered through several local tyre manu­ facturers and are not likely to be repeated in the immediate future, the concession is of little importance in the Authority’s considerations.

Importers at the inquiry submitted company details of tyres in transit to Australia and quantities remaining on orders. The aggregates from this information taken together with estimates for importers which did not give evidence, do not suggest a noticeable abatement

of imports in the immediate future. Importing interests have, however, maintain­ ed that the high level of imports for the first four months of 1974-75 were the result of exceptional circumstances and that imports for

the remainder of 1974-75 will be at a much lower level. It was claimed that a shortage of tyres earlier in 1974, when local manufacturers could not supply the full requirements of both original equipment and the replacement market, had resulted in large orders being placed over­ seas. It was further stated that these orders, some of which had been delayed by shipping problems, had been arriving during July to November 1974 in unplanned large volume, but this would soon slow down to a reduced quantity for the full year of 1974-75.

Local manufacturers strongly contended that there was not a shortage of supply of local tyres in 1974, and the statistics would support their claim. However, the belief was widespread that a shortage of tyres in Australia was imminent and this is evident from official files and the press, particularly in conjunction with serious

T able 4

IMPORTS OF TYRES CLEARED FOR HOME CONSUMPTION (Thousands)

Year Car Tyres Truck Tyres Total % Increase By-laws

1970-71 .................. 1214 138 1353 32

1971-72 .................. 1335 157 1492 10 —

1972-73 ................ 1756 152 1908 27 14

1973-74 ................. 2579 242 2821 48 61

July-Nov 1974* .......... 1500 240 1740 82

* Involves some estimations made from evidence. Source: Compiled from information supplied by the Australian Bureau of Statistics and from evidence.

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comment on the fuel crisis. The Authority has no doubt that this belief was sufficiently credible for some importers, at least, to place orders overseas to meet a possibly shortfall in supply.

Some of the tyres imported are types and sizes not made locally because of low demand. In addition, new types of tyres have first been introduced to the Australian market by imports and these have continued until local production has been established. Textile radial ply tyres and steel belted radials are examples.

Imported tyres have, in the past, been directed to the replacement market, but more recently imports have been used in increasing quantities as original equipment, in many instances at the customers request.

Five of the six local tyre manufacturers are also importers of tyres from their overseas associates. The A.T.M.A. estimated that imports by tyre manufacturers was about 5 per cent of

total car and truck tyre imports in 1972-73 and that this increased to about 10 per cent in 1973­ 74. The Authority has estimated that these imports increased to more than 20 per cent of total imports during July to November 1974 excluding imports under by-law.

Exports by the tyre industry commenced in volume in 1968 when about 3 per cent of pro­ duction went overseas. In 1970 exports exceed­ ed 1 1 per cent of total production but since then had declined to 3 per cent in 1973-74.

Apparent Market Supplies

During the review period the apparent market supplies for car and truck tyres rose from 9 million to 11.4 million in 1973-74. The first five months of 1974-75 indicate that supplies on an annual basis could exceed 12.6 million.

T able 5

APPARENT MARKET SUPPLIES OF CAR AND TRUCK TYRES (Thousands)

Year Local

Sales %

Im­ ports %

Total Supplies

1970-71 7700 85 1353 ,5 9053

1971-72 8700 85 1492 15 10192

1972-73 8400 81 1908 19 10308

1973-74 8600 75 2821 25 11421

July-Nov 1974 3519 67 1740 33 5259

Source: Compiled from information supplied by the Austra­ lian Bureau of Statistics and from evidence.

Sales of local tyres from 1971-72 to 1973-74 have been fairly stable at about 8.5 million per

annum. However, sales in July to November 1974 are about 11 per cent lower than in the same period in 1973. This is best observed in Table 2B.

This compares with the continuous increase in imports during the period from 1970-71. Imports have taken up ail of the increase in market supplies. At the same time the local industry's share of the market has fallen from

85 per cent in 1970-71 to 67 per cent during July-November 1974. Some importers maintained that imports would commence to decline early in 1975 and

that the market would quickly become normal again. On the other hand local manufacturers claimed that the major reason of excessive quantities of imports on the market was that tyres were readily available overseas and at attractive prices compared with local prices be­ cause of the serious downturn in demand for motor vehicles in Europe and North America. This position is not regarded as of short dura­ tion as there are no general signs of recovery in the overseas motor industries.

The A.T.M.A. claimed that the tyre industry's competitive position against imports had gradu­ ally deteriorated over many years but noticeably worsened following the tariff reductions at 19

July 1973. In addition it was claimed that variations in currency alignment during the past two years had also eroded the industry’s ability to compete with imports. It was stated that the devaluation of the Australian dollar on 25 September 1974 had had little or no benefit for

the tyre manufacturers at the time of the inquiry. While tyre manufacturers maintained sales at about 8.5 million tyres per annum for some years the profitability of producing has fallen

from moderate to unsatisfactory levels and, for some, losses have been experienced. The evidence covering stocks held by tyre

manufacturers and importers, makes it clear that the market at present is oversupplied. Information concerning tyres in transit and on order overseas indicates therd will be no early

return to a more normal supply situation. The A.T.M.A. estimated that, should there be a continuation of the present trend in imports during 1975, local tyre production would drop to less than 50 per cent of the industry’s

installed capacity and the present decline in employment would extend to as many as 6000 persons.

Conclusions

The evidence available to the Authority during the inquiry into motor vehicle tyres

5

showed two important matters in clear contrast. First, the consistent increase in the volume of imports of car and truck tyres during the four and a half years reviewed commencing 1970-71. Secondly, the general measure of stability in the local production and sales of car and truck tyres during the four years to 1973-74 followed by a fall in demand, a rise in stocks and an

increasing rate of retrenchment from tyre pro­ duction. Several reasons for the increase in imports are apparent. During 1974 there was consider­ able speculation and concern about an impend­ ing shortage of tyres. Rightly and wrongly this stimulated inquiries and orders overseas for tyres usually sourced in Australia. At least one witness suggested that orders were duplicated to ensure supply. Imports were also increased by dollar revaluations in 1973 and the reduction

in import duties on 19 July 1973. This later event was said to encourage a number of importers to import tyres for the first time. Some importers claimed that imports of tyres were declining and this would be more clearly seen from the statistics early in 1975. While these submissions were well based in respect to a group of imports, the evidence was not sufficiently representative of imports from all sources to be taken as a firm indicator.

During the period reviewed the tyre manu­ facturers have become less profitable and less competitive with lower priced imports and con­ sequently less able to meet increasing imports with widespread price reduction to maintain their traditional market shares.

It is not realistic to claim that imports are the sole cause of the tyre manufacturers prob­ lems or that temporary assistance is the sole cure. The facts which have weighed heavily in

the Authority’s decision are (a) the evidence that the market for tyres is oversupplied; (b) the level of imports during the next six months

is unpredictable; (c) the present level of imports, or even a moderate reduction, would continue to replace local production, sale and

employment, which has become evident since July 1974 and (d) the involvement of suppliers, of the basic raw materials, in the continuation of local tyre production at economic levels.

The Authority will recommend that assist­ ance be afforded the production of car and truck tyres in Australia by a temporary duty on imports of 10 per cent or, if higher, $0.10 per kg. On the basis of import price information $0.10 per kg will represent an ad valorem duty of more than 13 per cent in some cases.

It is not intended that this recommendation

apply to car and passenger tyres the origin of New Zealand. No changes in the existing by-law arrange­ ments are proposed.

The Authority considers that this temporary duty in conjunction with the existing nominal rates of duty and the effects of the devaluation of the Australian dollar, on 25 September 1974, will assist manufacturers to maintain their present level of production and employment

until the Industries Assistance Commission has reviewed the industry. It is not intended that the temporary duty will ensure manufacturers their present share of the market.

The A.T.M.A. drew attention to the ratings required of local tyres for original equipment by Design Rule 24, and claimed that many imported tyres did not come up to these ratings. The Authority has not taken this into account in making its recommendations, but considers that such standards should apply equally to locally

produced and imported goods. The A.T.M.A. requested that the preferential rates of duty be cancelled and imports from all sources be dutiable at the same rate. The Authority considers that no evidence was pro­ duced to warrant the application of especially high temporary duties on British tyres. Cancella­ tion of the preferential rate is more rightly a matter for recommendation following a review by the Industries Assistance Commission.

In reply to the questions contained in the Prime Minister's reference the Authority advises as follows: (a) (i) it is necessary that urgent action be

taken to protect the Australian in­ dustry producing motor vehicle tyres in relation to the importation of tyres of a kind falling within sub-item 40.11.900 of Schedule 1 to the Customs Tariff 1966-1973 and statis­ tical codes 112, 203, 214, 134 and

145 being tyres for cars, utilities, trucks and omnibuses; (ii) it is not necessary that urgent action be taken to protect the industry in

relation to the importation of other tyres covered by the reference; (b) the protection can appropriately he provided by means of a temporary

additional duty of 10 per cent or, if higher $0.10 per kg.

N. V. WATSON, Member Temporary Assistance Authority Canberra, A.C.T. 2 January 1975

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APPENDIXES

APPENDIX A — The Reference APPENDIX B — Operative Rates of Duty APPENDIX C — List of Witnesses and Interested Persons

APPENDIX D — Requests APPENDIX E — Imports of Motor Vehicle Tyres Cleared for Home Consumption

APPENDIX A

THE REFERENCE

Whereas it appears to me, EDWARD GOUGH WHITLAM, Prime Minister, that urgent action may be necessary to protect the Australian industry produc­ ing motor vehicle tyres, I, EDWARD GOUGH

WHITLAM, in pursuance of the powers conferred upon me by Section 26 of the Industries Assistance Commission Act 1973, do hereby request the Temporary Assistance Authority:

1. to undertake an inquiry under Section 27 of the aforesaid Act, on the following questions:

(a) whether it is necessary that urgent action be taken to protect that industry in relation to the importation of tyres of a kind falling within sub-item 40.11.900 of Schedule I to the Customs Tariff 1966-1973; and (b) if such urgent action is necessary: whether,

having regard to the public interest, the pro­ tection can appropriately be provided by means of a temporary duty, or if it cannot be so

provided whether it can appropriately be provided: (i) by means of the temporary prohibition or restriction of the importation of those

goods: or (ii) by means of a combination of both a temporary duty and the temporary pro­ hibition or restriction of the importation

of those goods; and

2. to report, in accordance with Section 28 of the aforesaid Act, on these questions.

E. G. WHITLAM

4 December 1974

APPENDIX B

CUSTOMS TARIFF PROVISIONS

Item Goods

Rates of Duty

General Preferential

40.11 RUBBER TYRES, TYRE CASES,

INTERCHANGEABLE TYRE TREADS, INNER TUBES AND TYRE FLAPS, FOR WHEELS OF ALL KINDS:

Definition ‘rubber’ — CN 1

Goods deemed to be ‘rubber’ — CN 8 (3)

40.11.1 —Solid tyres; solid substitute inner tubes,

suitable for use with pneumatic tyres NOT UNDER REFERENCE

40.11.9 —Other 15% or, if higher,

$0.17 per kg

6% or, if higher, $0.08 per kg

DEVELOPING COUNTRIES (except Taiwan and Israel): As prescribed by by-law (By-law quota for 1975 is $A1 000 000)

DC: 5%, or, if

higher, $0.10 per kg

CAN: 15% or, if higher, $0.17 per kg

Other DC: 15% or, if

higher, $0.17 per kg

NEW ZEALAND Goods having a value not exceeding $1.10 per kg

$0.06 per kg; or, if lower, $0.17 per kg, less 15% of

Value

Remainder Free

7

CONSOLIDATED BY-LAW REFERENCES

Tariff Reference

40.11

40.11

40.11

40.11

40.11

Description of Goods

By-law Provision

Tyres: Bicycle tyres (known as racing singles) not incorporating wire beads, weighing 250g or less, of a kind used in track racing

Pneumatic tyres, for use in the manufacture or repair of aircraft, under security, as follows With chine, other than tyres having a rim size of 14 in or 15 in. Without chine and having a rim size exceeding 22 in.

Pneumatic tyres having: (a) a ply rating not exceeding 10; and (b) a section width not less than the rim diameter,

not being tyres of a kind used for motor racing or on aircraft

Pneumatic tyres, of a kind used on earthmoving equipment, having: (a) a rim size of 25 in.; (b) a ply rating of not less than 16; and (c) a nominal section width of 26.5 in. or greater,

and tubes and tyre flaps imported with and for use therewith

Pneumatic tyres, but not including sizes 29.50 x 29 or 18.00 x 33, of a kind used on earthmoving equipment having (a) a rim size exceeding 25 in.; and (b) a ply rating of not less than 16,

and tubes and tyre flaps imported with and for use therewith.

19

19

NOTE: By-law item 19 provides for entry of goods free of duty.

CUSTOMS TARIFF NOTES

Chapter 40 makes the following notes in respect of goods under reference: 1. In this Schedule, unless the contrary intention appears, ‘rubber’ means any of the following sub­

stances, whether or not vulcanised or hardened: (a) natural rubber; (b) balata; (c) gutta-percha and similar natural gums; (d) synthetic rubber; (e) factice derived from oils; (f) any substance referred to in CN 1 (a) to (c)

when reclaimed

8. (1) Not applicable. (2) For the purposes of 40.07, 40.08, 40.09, 40.10, 40.12, 40.13 and 40.14 the following substances (whether or not they have been vulcanised)

shall be deemed to be vulcanised rubber: (a) balata, gutta-percha and similar natural gums; (b) factice derived from oils; (c) any substance referred to in either of the

preceding paragraphs of this note, when reclaimed. (3) For the purposes of 40.11, goods referred to in CN 8(2) shall be deemed to be rubber.

APPENDIX C

LIST OF WITNESSES

The following witnesses submitted evidence during the course of the public inquiry on this subject: Mr K. J. Cremen, Executive Director, Australian Tyre Manufacturers' Association, 21-23 London Circuit,

Canberra City, A.C.T. Mr K. A. Hebblewhite, Chairman, Australian Tyre Manufacturers’ Association, 21-23 London Circuit, Canberra City, A.C.T. and also as Director, Firestone

Australia Ply Limited, 265 Parramatta Road, Auburn, New South Wales. Mr T. H. McConnell, Manager of Government Affairs, Goodyear Tyre and Rubber Company (Australia)

Limited, 4 Yurong Street, Sydney, New South Wales. Mr R. M. Copeland, Chairman and Managing Director, Firestone Australia Pty Limited, 265 Parramatta Road, Auburn, New South Wales. Mr J. A. Gayler, Marketing Manager, Uni Royal Pty

Ltd, 3 Frost Road, Salisbury, South Australia. Mr W. R. Beischer, General Manager, Automotive and Industrial Group, Dunlop Australia Limited, 108 Flinders Street, Melbourne, Victoria. Mr J. Quealy, Marketing Manager, Automotive and

Industrial Group, Dunlop Australia Limited, 108 Flinders Street, Melbourne, Victoria.

8

Mr L. Watson, Assistant General Manager, The Olympic Tyre and Rubber Co. Pty Ltd, 393 Swanston Street, Melbourne, Victoria. Mr C. B. Rhinehart, Managing Director, B. F. Good­

rich Australia Limited, 1396 Malvern Road, Glen Iris, Victoria. Mr R. F. Brown, General Sales Manager, B. F. Good­ rich Australia Limited, 1396 Malvern Road, Glen

Iris, Victoria. Mr A. W. Grazebrook, Marketing Manager, Australian Synthetic Rubber Co. Ltd, Maidstone Street, Altona West, Victoria and also on behalf of The Raw

Materials Suppliers to the Tyre Industry. Mr L. W. Rowe, Managing Director, Continental Carbon Australia Pty Ltd, Sir Joseph Banks Drive, Kurnell, New South Wales. Mr H. J. Warren, Managing Director, Australian

Carbon Black Pty Ltd, Millers Road, Altona, Victoria. Mr P. Osborne, Assistant to Managing Director, Phillips Australia Chemicals Pty Ltd, 69 Macquarie

Street, Sydney, New South Wales. Mr R. Coyle, Technical Manager, Industrial Fibre Department, Fibremakers Limited, Canterbury Road, Bayswater, Victoria. Mr J. H. McQueen, Manager, Industrial Fibre Depart­

ment, Fibremakers Limited, Canterbury Road, Bays­ water, Victoria.

Mr L. M. Jeffreys, Director, Courtaulds (Australia) Limited, Tomago, New South Wales.

Mr G. Wulff, Director, Cramb Tariff Services Pty Limited, 83 Goulburn Street, Sydney, New South Wales on behalf of the following Japanese Tyre Manufacturers and Importers:

• The Yokohama Rubber Co. Ltd • Bridgestone Tyre Co. Ltd • The Toyo Rubber Industry Co. Ltd • Nitto Tyre Co. Ltd

• Ohtsu Tyre and Rubber Manufacturing Co. Ltd • Kanematsu-Gosho (Australia) Pty Ltd • Marubeni Australia Pty Ltd • Mitsubishi Australia Ltd

• Chatani Australia Pty Ltd • Toyomenka (Australia) Pty Ltd Mr J. Noble, Sales Manager, Tyre Division, Kanematsu- Gosho (Australia) Pty Ltd, 39-41 York Street,

Sydney, New South Wales.

Mr K. Suzuki, Manager, Liaison Representative Office, The Yokohama Rubber Co. Ltd, 333-339 George Street, Sydney, New South Wales.

Mr R. C. Fisher, Director, Ronald C. Fisher Trade Consultants Pty Limited, B.M.I. Building, Alinga Street, Canberra, A.C.T. on behalf of Bob Jane Corporation Limited, 139 Chetwynd Street, North

Melbourne, Victoria.

Mr R. F. Jane, Director, Bob Jane Corporation Limited, 139 Chetwynd Street, North Melbourne, Victoria. Mr M. W. Palmer, Manager, Australian Representative Office of Pirelli Ltd., Britain and Director, Osborne

Tyre Service Pty Ltd, 146 Lake Street, Perth, Western Australia.

Mr G. P. Grant, General Manager, Grant, Matich & Company Pty Ltd, 2 Ocean Grove Road, Cronulla, New South Wales.

Mr R. M. Jenkins, Chairman and Managing Director, Fnsign Tyre Group, 740 Elizabeth Street, Melbourne, Victoria incorporating Hi-Mile Tyre Wholesalers Pty

Ltd of Victoria, Western Australia, South Australia and Queensland. Mr K. L. Bartlett, Manager for New South Wales and the A.C.T., M. S. McLeod Limited, 276 Parramatta

Road, Auburn, New South Wales. Mr R. W. Balstrode, Representative, Michelin Tyre Division, M. S. McLeod Limited, Fariola Street,

Silverwater, New South Wales and also on behalf of M. S. McLeod Limited 176-180 Pulteney Street, Adelaide, South Australia. Mr E. Sutherland, Manager, Sutherlands Tyres Pty Ltd,

175 Stuart Street, South Melbourne, Victoria. Mr P. Hardcastle, Non Executive Director, Bell Bros. Tyres Pty Ltd, Kalamunda Road, South Guildford, Western Australia.

Mr A. E. Greenway, Director, Alan E. Greenway Pty Ltd, 100 Botany Road, Mascot, New South Wales on behalf of Frank Matich Pty Ltd, 257-259 Military Road, Cremorne, New South Wales and Carneeds Pty Ltd, 152-156 Parramatta Road, Stanmore, New South Wales. Written submissions were received from the following: The Federated Rubber and Allied Workers’ Union of

Australia, Trades Hall, Carlton, Victoria. Minster Carpets Pty Ltd, Princes Highway, Dandenong, Victoria.

APPENDIX D

REQUESTS

The Australian Tyre Manufacturers Association re­ quested that: (i) Imports of tyres, which on importation are admissible under sub-item 40.11.900 in the First

Schedule to the Customs Tariff Statistical Key Codes 112, 203, 214, 134 and 145 be restricted in the twelve month period commencing 1 January 1975 (and in subsequent 12 month periods) to a maximum of 1.66 million units

from all sources, split up in two categories, as follows: Type of Tyres St at Key Codes Units Motor Car and Utility 1 12,203,214 1.53 M

Truck and Omnibus 134, 145 0.13 M

(ii) Preferential duty rates on tyre imports be can­ celled and that imports as in sub-paragraph (1) from all sources be dutiable at the rate of 20% ad valorem or 22c per kg whichever is the higher. (iii) Imports of tyres in any twelve month period in

excess of 1.66 million units be dutiable at the rate of 40% ad valorem or 44c per kg which­ ever is the higher. These requests were supported by the industrial tyre manufacturers and by firms supplying raw materials to the tyre industry.

Cramb Tariff Services Pty Limited on behalf of Japanese Tyre manufacturers and the importing agents in Australia contended that no emergency situation existed at present or would exist in the foreseeable

future for the Australian tyre industry and requested that the Temporary Assistance Authority recommend to this effect. Pirelli Limited and Osborne Tyre Service Pty Ltd,

requested that: If the Temporary Assistance Authority feels that quantitative protection is needed in addition to the current production afforded by customs duty that:

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(i) No restriction be placed on tyres which have a CIF value greater than $1.50 per kilogram (ii) No restriction be placed on imports of tyres of types, sizes and constructions not made in

Australia.

M. 5. McLeod Limited requested that the importation of Michelin Steel Radial tyres be permitted to continue without any change in present tariff arrangements. Sutherlands Tyres Pty Ltd suggested that if restric­ tions were to be placed on the importation of tyres such

restrictions should not apply to radial tyres, especially steel cord radial truck tyres. It felt that the prohibition of Textile cross ply imports would prove to be the remedy needed by the Australian tyre manufacturers who could then fully utilize the local manufacturing capacities.

Alan E. Greenway Pty Ltd on behalf of Frank Mattel·. Pty Ltd, requested that Hi-Speed Closed Circuit Racing Car Tyres including Go-Kart tyres be excluded from any temporary duties or quantity restrictions and be allowed entry under current By-law criteria.

APPENDIX E

IMPORTS CLEARED FOR HOME CONSUMPTION MOTOR CARS AND UTILITY TYRES

Description and Country of Origin

Number (000’s) Value ($000 f.o.b.)

1971-72 1972-73 1973-74 4 Mths to Oct. 1974 1971-72 1972-73 1973-74 4 Mths tc Oct. 1974

Radial Ply Normal Entry France .................. 63 57 103 55 871 894 1523 970

Germany F.R......... 46 120 301 166 870 2016 5613 3609

Israel .................. 41 51 36 20 337 437 315 245

Japan ..................

Taiwan ..................

220 443 653 142 2142 4511 7329 2026

7 10 32 15 37 43 170 96

United Kingdom .... 310 305 322 180 4743 4696 4323 2804

U.S.A.................... 1 6 59 27 26 154 902 507

Other .................. 164 255 313 196 1890 2823 3866 2597

By-Law .................. — 7 41 30 2 142 871 641

Total .......................... 852 1254 1860 831 10918 15716 24912 13495

Other Normal Entry France .................. 5 1 9 3 59 14 111 50

Germany F.R......... 7 9 23 7 117 92 296 142

Israel .................. 55 50 103 52 351 286 544 322

Japan .................. 224 225 204 76 1676 1837 1817 871

T aiw an................. 127 149 100 26 738 825 541 198

United Kingdom .... 27 16 132 40 409 192 1605 464

U.S.A.................... 6 14 71 132 155 157 1048 1758

Other .................. 32 31 57 44 237 268 315 423

By-Law .................. (a) 7 20 52 1 54 302 681

Total .......................... 483 502 719 432 3743 3725 6579 4909

Total Motor car and Utility .................. 1335 1756 2579 1263 14661 19441 31491 18404

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TRUCK AND OMNIBUS TYRES

Description and Country of Origin

Number (000‘s) Value ($000 f.o.b.)

1971-72 1972-73 1973-74 4 Mths to Oct. 1974 1971-72 1972-73 1973-74 4 Mths to Oct. 1974

Radial Ply Normal Entry France .................. 8 4 12 11 407 351 821 739

Italy ................... 3 1 10 1 216 46 742 100

Japan .................. 3 2 8 9 86 65 451 546

Korea Rep.............. — — ( a ) - 12 — — 12 760

Spain .................. 8 3 16 5 257 177 639 263

United Kingdom .... 50 51 74 27 3878 3781 3875 2034

Others .................. 5 4 7 6 149 130 326 463

By-Law .................. (a) (a) — — 6 28 — —

T otal .......................... 77 65 127 71 4999 4578 6866 4905

Other Normal Entry France ................... (a) (a) (a) (a) 5 3 15 22

Italy ................... (a) — (a) — 1 — 8 —

Japan ................... 66 74 80 71 2003 2249 2730 2958

Korea Rep.............. (a) (a) 3 2 1 2 117 79

Spain .................. (a) 1 1 — 2 61 70 —

United Kingdom .... 8 6 6 4 267 157 209 188

Others .................. 6 6 25 38 304 191 888 1497

By-Law .................. (a) (a) — (a) 43 2 — 1

Total .......................... 80 87 115 115 2626 2665 4037 4745

Total Truck and Omnibus ................... 157 152 242 186 7625 7243 10903 9650

(a) Less than 1000 Source: Compiled from information supplied by the Australian Bureau of Statistics.

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