This media release and key points were issued with the annual report series, Trade & Assistance Review 2004-05, on 7 April 2006.

Budgetary grants and tax concessions provided Australian industry with $4.6 billion in assistance last financial year, according to a Productivity Commission report.

Trade & Assistance Review 2004-05 provides the Commission's latest estimates of budgetary assistance to industry provided by the Australian Government.

The report shows that the manufacturing sector was the major recipient of budgetary assistance. Textiles, clothing and footwear and the automotive industries remain the most highly assisted areas of manufacturing. The Government has announced continuing transition programs designed to move both sectors to lower levels of assistance, with tariffs in both sectors falling again last year.

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.

The report also focuses on the recent worldwide surge in preferential trade agreements, in which Australia has participated.

Background Information: Tom Nankivell, Research Manager 02 6240 3235

Other: Clair Angel, Media and Publications 02 6240 3239 / 0417 665 443