Soundly-based and well implemented business programs are an important part of Australia's industry policy. Such programs help to facilitate economic growth and higher living standards, according to Mr Bill Scales, Chairman of the Industry Commission.

Mr Scales was speaking on the release of the Commission's submission to the review of Commonwealth business programs. These programs provide support worth more than $3 billion a year to Australian industry. The Commission has argued in its submission that some programs have assisted economic growth and increased community welfare. But the justification for, and effectiveness of, a number of programs is questionable. “By assessing which programs are effective, which need to change to more effectively meet their objectives, and which should be terminated, the Review can make a positive contribution to industry policy. Indeed, one significant and worthwhile outcome of the Review would be a plan for rationalising the current plethora of programs”.

Mr Scales also stressed that business programs are only one component of an effective industry policy. “Sound macroeconomic management and broad-ranging microeconomic reform are crucial to efficient industry development and the higher living standards this will support.”

The Commission's submission sets out a range of requirements that business programs should meet, including that they:

• Promote the interests of the community rather than just particular firms or sectors.
• Are the best way of addressing significant market failures or policy impediments.
• Are well targeted and maintain incentives for firms to operate efficiently.
• Provide transparent assistance, and embody requirements for effective monitoring, public reporting and periodic review by independent agencies.
• Avoid unnecessary compliance costs.

For media comment: Bill Scales, (03) 9653 2291.

For background information: Ian Gibbs, (06) 240 3316

Forming the Productivity Commission

The Industry Commission, the former Bureau of Industry Economics and the Economic Planning Advisory Commission have amalgamated on an administrative basis to prepare for the formation of the Productivity Commission. Legislation formally establishing the new Commission is before Parliament.