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Tobacco growing and manufacturing industries

Industry Commission inquiry report

This report was signed on 29 June 1994, and subsequently released by the Commonwealth Government. The report contains the findings of the Industry Commission public inquiry on the appropriate tariff level to apply after 30 September 1995 to imports of tobacco leaf and manufactured tobacco products having regard to the Government’s decision to terminate the Tobacco Industry Stabilisation Plan and the Local Leaf Content Scheme on that date.

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  • Contents

Cover, Copyright, Signing Page, Contents, Abbreviations, Glossary, Terms of Reference, Overview, Findings and Recommendations


1 The Inquiry
1.1 Scope of the inquiry
1.2 Conduct of the inquiry
1.3 The Commission's approach
1.4 Structure of the report
1.5 Recent and concurrent inquiries

2 Industry Background and Government Involvement in Tobacco
2.1 Industry background
2.2 Government involvement in tobacco since the mid-1930s

3 The Tobacco Industries and their Markets
3.1 Global production of leaf
3.2 International trade in tobacco leaf
3.3 Global production of tobacco products
3.4 Global markets for tobacco products
3.5 Tobacco leaf production in Australia
3.6 Exports and imports of tobacco leaf
3.7 The Australian tobacco manufacturing industry
3.8 Domestic consumption

4 Government Influence on Domestic Production of Tobacco Leaf and Products
4.1 Influence on the growing sector
4.2 Influence on the manufacturing sector

5 Competitiveness and Assistance to the Tobacco Industries
5.1 Introduction
5.2 Provision of assistance
5.3 Tariff equivalents to assistance to tobacco growing
5.4 Assistance to manufactured tobacco products
5.5 Export competitiveness
5.6 Regional implications of assistance to tobacco growing
5.7 Financial effects of changes in tobacco prices

6 Government Policies Affecting the Domestic Consumption of Tobacco Products
6.1 Introduction
6.2 Taxation
6.3 Regulations
6.4 Provision of information
6.5 Summary

7 Tobacco Growing Industry Adjustment
7.1 History of industry adjustment
7.2 Factors influencing adjustment
7.3 Impediments to adjustment
7.4 Dimensions of the current adjustment task

8 Adjustment Assistance and Regional Programs
8.1 Quota retirement schemes
8.2 Existing adjustment programs
8.3 Regional initiatives

9 Future Assistance Arrangements
9.1 Introduction
9.2 Future of the industry
9.3 Form of future assistance
9.4 Appropriate tariffs
9.5 Phasing arrangements

10 The Uruguay Round of Trade Negotiations
10.1 Reform of non-tariff trade barriers
10.2 The mechanism for local content schemes
10.3 The outcome
10.4 Tobacco leaf
10.5 Comparison with the Commission's recommendation
10.6 Manufactured tobacco products
10.7 Implications for future assistance to tobacco growing
10.8 International trade obligations


B1 Government Health Objectives and Policies
B1.1 Introduction
B1.2 Health objectives
B1.3 Conclusion

B2 The Economics of Smoking Regulation
B2.1 Introduction
B2.2 Optimum levels of smoking
B2.3 Individual decision-making and market failure
B2.4 Government measures to modify smoking behaviour
B2.5 Summary

B3 Measuring the Costs and Benefits of Smoking
B3.1 Introduction
B3.2 Assessing the costs of smoking
B3.3 Assessing the benefits of smoking
B3.4 Studies of the costs and benefits of smoking in Australia


A Customs tariff and excise tariff provisions

B Exchange of correspondence

C Inquiry participants and visits

D The changing nature of government involvement in tobacco

E Tobacco Industry Stabilisation Plan 1989-1995

F Impact of the Queensland $10 million tobacco fund

G The decline in national selling entitlements

H ATMAC Grade and Minimum Price Schedules

I Draft International Classification System

J The Tobacco Research and Development Council

K Tobacco leaf production and price disadvantages

L Conceptual framework for assistance evaluation

M Effects of world parity pricing on farm revenues

N Commonwealth excise on tobacco products

O Studies of the demand for tobacco products

P Selected Commonwealth and State Government assistance and development programs



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