Trade and Assistance Review 1999-2000
This media release was issued with the annual report series, Trade and Assistance Review 1999-2000, on 22 December 2000.
A report released today by the Productivity Commission provides the latest estimates of Commonwealth assistance to industry. It reveals that there has been a further slight reduction in assistance to manufacturing and agriculture, continuing the trend of the past decade. However, it also notes that there remain pockets of higher assistance, which can favour some firms and industries at the expense of taxpayers, consumers and other businesses.
The report - Trade and Assistance Review 1999-2000 - shows that:
- the 'effective rate of assistance' is low for most agricultural and manufacturing industries at around 5 per cent or less, and negative for mining; but
- the dairy industry, the textiles, clothing, footwear & leather industries, and the passenger motor vehicles industry remain relatively highly assisted, with effective rates of around 50 per cent, 25 per cent and 15 per cent respectively.
The report also contains the Commission's first detailed estimates of which industries receive Commonwealth budgetary assistance.
Of the $3.7 billion of budgetary assistance provided to industry in 1999-2000, $1.5 billion, or more than 40 per cent, was directed to manufacturers. Within the sector, the passenger motor vehicles industry and the petroleum, coal, chemical and associated products industry (which includes pharmaceuticals manufacturers) received the most assistance - $400 million and almost $300 million respectively. As a percentage of industry gross value added, the largest recipients were the passenger motor vehicles industry (7.1 per cent) and the textiles, clothing, footwear & leather industries (4.7 per cent).
By contrast, most other manufacturing industries received budgetary assistance equivalent to far less than 2 per cent of their gross value added, while the mining and services sectors both received budgetary assistance equivalent to less than 1 per cent of their gross value added.
On the other hand, budgetary assistance to primary producers in 1999-2000 was more than $750 million, equivalent to 4 per cent of the sector's gross value added.
Finally, the report presents recent estimates of trade restrictions in the services sector. Compared with other economies, Australia has liberal trading regimes for engineering, architecture, distribution, banking and telecommunications services; and moderately restrictive regimes in legal, accountancy and maritime services.
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