This media release and key points were issued with the annual report series, Trade and Assistance Review 2002-03, on 23 January 2004.

Import tariffs, budgetary grants and tax concessions provided Australian industry with the equivalent of more than $10 billion in gross assistance last financial year, according to a Productivity Commission report.

Trade and Assistance Review 2002-03 provides the Commission’s latest estimates of industry assistance provided by the Australian Government.

Most Australian industries have relatively low rates of assistance by historical standards, but pockets of high assistance remain. Significant new assistance measures have been announced recently for medical indemnity insurers, ethanol producers and farmers affected by the drought.

The report shows that the manufacturing sector was the major recipient of assistance. Textiles, clothing and footwear and the automotive industries remain the most highly assisted manufacturing industry groupings, although the Government has announced continuing transition programs designed to move both sectors to lower levels of assistance.

The report notes that particular forms of assistance, such as R&D subsidies, can deliver net community benefits if well designed. But it also indicates that industry assistance can entail significant costs to consumers, taxpayers and other industry — for example, tariffs on manufactured imports penalised businesses in the services sector by some $2.5 billion in 2002-03.