The Commission's modelling indicates that there would be economy-wide benefits from further reductions in the relatively high tariffs on TCF imports. Assistance reductions would involve some further contraction of the TCF sector, but this would be outweighed by expansion of other industries resulting from cost reductions. Consumers and taxpayers would benefit from a reduction in the $1.5 billion burden they currently bear.

The modelling also suggests that the benefits would be larger under the legislated program of reductions in tariffs to 5 per cent by 2015, than options with lesser reductions. Modelling also confirms that gains accrue even with pessimistic assumptions about employment and price effects.

The Commission's modelling indicates that a significant further appreciation of the Australian dollar, associated with the mining boom, could have a greater impact on TCF activity than assistance reductions. But trying to offset such pressures on the TCF sector through higher assistance would impose costs elsewhere in the economy.

In undertaking its research, the Commission benefitted from early meetings with Professor Green and his Secretariat, and from the feedback of modelling referees and other experts who attended a workshop in May to examine the model and the Commission's preliminary results.

• Preliminaries
  Cover, Copyright, Foreword, Contents and Abbreviations
• Overview
• Chapter 1 Background and approach to the study
  1.1 Introduction
  1.2 The Green Review and the Commission's study
  1.3 Background to the current assistance regime
  1.4 The Commission's approach to this study
• Chapter 2 Current assistance to the TCF sector
  2.1 Tariff assistance
  2.2 Budgetary assistance
  2.3 Other programs and policies
  2.4 Adding up TCF assistance
• Chapter 3 The modelling framework
  3.1 Why use the MMRF model?
  3.2 Key features of the MMRF model
  3.3 Implementing the scenarios
  3.4 Reporting the economic impacts
• Chapter 4 Modelling results
  4.1 Main mechanisms at work
  4.2 Results for different scenarios
  4.3 Results for the sensitivity scenarios
• Chapter 5 The modelling in perspective
  5.1 High level messages from the simulations
  5.2 How robust are the model specifications and key parameters?
  5.3 Accounting for 'exogenous' considerations
  5.4 Summing up on the economy-wide effects
• Appendix A Study request
• Appendix B Summary of referee comments
• Appendix C Additional results
• Appendix D Modifying the database and incorporating assistance
• Appendix E Additional simulations
• Appendix F Analysis of pass through under monopoly
• Appendix G Estimating assistance to TCF
• Appendix H Import substitution elasticities
• References