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Wednesday, 5 October 1983
Page: 1371

Mr JOHN BROWN (Minister for Sport, Recreation and Tourism, Minister for Administrative Services and Minister Assisting the Minister for Industry and Commerce)(4.08) —I move:

That the Bill be now read a second time.

The Bounty (Injection-moulding Equipment) Amendment Bill 1983 proposes the provision of temporary assistance, in the form of an additional bounty, for the Australian industry producing injection-moulding equipment, pending completion of an inquiry by the Industries Assistance Commission. The goods eligible for temporary assistance are injection-moulding machines for the production of moulded plastic goods, and parts for such machines. Since 23 May 1979, local production of these goods has been assisted by a 15 per cent duty and a bounty which has been phasing down progressively and is currently 5 per cent of value added.

The Temporary Assistance Authority report No. 58 of 3 March 1983 recommended that no additional assistance be provided to the industry. The TAA considered that injury to the industry was confined to only one of the two local manufacturers, Johns Consolidated, and was largely attributable to matters internal to that company. Johns went into receivership in November 1982 and has now closed.

The TAA report, however, indicates that both increased import competition and reduced demand have occurred in recent times. Competitive imports in 1981-82 were valued at $16.3m, an increase of 123 per cent over the level of $7.3m in the previous year. About one-quarter of the increased imports were by local manufacturers. In the half year ended December 1982, imports remained at a high level, $8.3m, and accounted for 74 per cent of the total market compared with only 33 per cent in 1979-80. At the same time the estimated market in the December 1982 half year declined to $11.1m compared with $27.5m in 1981-82.

In relation to Battenfeld (Australia) Pty Ltd, the only remaining local producer, the TAA reported that the company experienced stable market share and employment between 1979-80 and 1981-82, but profitability during the period was at a comparatively low level. In the six months ended December 1982, Battenfeld' s sales dropped significantly and its stocks increased. This was accompanied by a worsening of profitability. The company stated that unless temporary assistance were granted its continued presence as a local manufacturer would be in doubt. Because of the performance of the local industry in recent years, the Government has decided that a review of the long term assistance arrangements is necessary. The relevant IAC reference, sent on 30 June 1983, seeks a report on or before 29 February 1984 as to whether assistance should be accorded this industry, and, if so, the nature and level of that assistance. The Department of Defence, in its submission to the TAA said that it would view with concern a situation where all injection-moulding machine manufacturing capacity in Australia were to disappear. The Commission has therefore been asked to provide additional advice on the form of assistance required if the Government wishes to maintain the industry on defence strategic grounds.

As I indicated earlier, the Government decided that short term assistance is required pending an IAC inquiry. The assistance as proposed by this Bill will be an additional bounty of 20 per cent of value added to be paid on injection- moulding equipment manufactured after 23 May 1983 and sold for use in Australia. The temporary assistance will be paid until the Government takes a decision on the IAC report and will be payable to manufacturers who continue to be engaged in the manufacture of injection-moulding machines between 10 June 1983 and the date of the IAC report, and who maintain at least the level of employment existing at 10 June 1983 of persons directly involved in the manufacture of the equipment. Depending on the actual levels of production and sales it is estimated that for a full year the additional bounty will cost about $100,000.

Clause 4 of the Bill amends the provisions in the Act relating to the powers to require persons to answer questions and produce documents, specifically to exclude persons, including members of the public, who purchase equipment for their own use, from being required to attend and answer questions. This is being done as a consequence of the comments by the Senate Standing Committee for the Scrutiny of Bills in its second report, on similar provisions contained in the bounty legislation which came before the Parliament in the previous sittings. I commend the Bill to the House.

Debate (on motion by Mr Braithwaite) adjourned.