Government Assistance to Industry

In 2007-08, Australian Government budgetary outlays, tax concessions and import tariffs provided Australian industry with $17.5 billion in gross assistance, according to the latest annual review by the Productivity Commission. After allowing for the cost impost of import tariffs on industries using goods as inputs, net assistance to industry was estimated at $9.4 billion.

Trade and Assistance Review 2007-08 sets out the Commission’s latest estimates of industry assistance provided by the Australian Government, and documents recent policy announcements and developments.

While tariff assistance has declined significantly, in recent years, budgetary assistance to industry has been increasing.

Measured assistance will increase further as a consequence of announcements during the year relating to R&D, the automotive sector and the rural sector. These amount to outlays of around $20 billion over coming years. Some elements of the infrastructure and global financial crisis response packages are also likely to have industry assistance implications.

A feature of this year’s Review is a stock-take of carbon emission reduction measures announced to date by the Australian, State and Territory governments. The Commission identifies some 240 budgetary and regulatory arrangements, totalling around $23 billion over the medium term. Many of these are inter-related, including with other policy areas such as energy efficiency and transport. The Commission, accordingly, sees a need for nationally coordinated reviews and evaluations of such measures.