FOR PRESS i' Dt4? d
j;-iPJ0PM. NO. 136/ 1967
GOVERNMENT MEASURES TO ASSIST INDUSTRY
Statement by the Prime Minister, Mr Harold Holt_
This week the Federal Government has met representatives
of the manufacturing and rural Industries of Australia to discuss the
immediate and long term effects of the British devaluation of the Pound
Sterling and the Australian decision to maintain the value of the Dollar.
General assessments by inustry were closely in line
with those made by the Government and detailed consideration began of
the special problems of certain industries.
I made it clear when the Government took its decision on
devaluation, and again this week, that when current surveys were complete,
the Governent would proceed to give appropriate assistance in areas of
industry which have suffered directly. Surveys are In progress and will
continue for some time, b ut firm decisions have now b een taken on some
aspects. There are matters of urgency to some industries,
particularly rural industrie s. They fall into two categories
Immediate problems as the result of the devaluation of
British and other currencies.
Long-term fundamental problems of rural Industries.
Cabinet therefore decided yesterday on certain measures
to help the rural industries likely to be affected immediately and also to
initiate a full examination of basic problems by the relevant Ministers and
by special high-level committees. The decisions are summarised below.
A Devaluation Reporting Committee of three senior
officials under the chairmanship of the Secretary of the Department of
Primary Industry ( Mr A. C. B. Maiden) will begin work at once. The other
members will Be Sir Alan Westerman and Mr M. W. O'Donnell.
This Committee will report direct to the Cabinet through
the Prime Minister. It will consider the immediate problems of devaluation
in the rural Industries by examining losses from devaluation considered
to be demonstrable and unavoidable, and make recommendations for action
regarding them. A special enquiry into the fundamental problems of rural
industries, Involving consideration of the reconstruction of certain
industries, will be made by the Minister for Primary Industry ( Mr Anthony).
Mr Anthony will consult with the appropriate State
Ministers and with the leaders of rural Industries. He will then bring
specific proposals before Cabinet. / 2
-2-
The Government has, for some time, had under consideration
a restructuring of the dairy Industry-and -proposals are now ready for
Cabinet. Consideration will be given to applying the principles on which these
proposals are based to certain other rural industries.
The Wheat Board has already suffered Identifiable losses
of something like $ 30 million on outstanding Sterling contracts as a direct
result of British devaluation. Insurance cover against devaluation was sought
by the Wheat Board but was not available.
The Government will reimburse the Wheat Board for this
loss less the amount of the premiums which would have been payable had
insurance cover been available.
. Other marketing authorities which were not able to take
out full cover against devaluation with the Reserve Bank, and which have
suffered loss as a result, will be eligible for assistance in the same way after
the facts have been established by the Devaluation Reporting Conmidttee.
There Is some urgency for the canned fruit industry because
of the imminent ripening of fruit In the forthcoming harvest. Some 65 per cent
of canned fruit exports go to Britain. Cabinet decided that the Government
would assist the canned fruit Industry and details of this assistance will be
announced by the Minister for Trade and Industry.
The assistance to be announced by the Minister will be
conditional on the industry working out urgently long-term arrangements to
put before the Government for the rationalisation of the marketing of canned
fruits and for the stabilisation of the industry on a more satisfactory longterm
basis. It will apply to the very exceptional circumstances of this
industry In relation to the 1968 pack.
The manufacturing industries In both their domestic and
export operations have also been the subject of special consideration. Four
measures have been approved by Cabinet
The Associated Chambers of Manufactures of Austmlia, by
agreement with the Government, has already begun to set
up industry panels. These panels will cover all industries
exposed to the risk of direct disability arising from devaluation
abroad. They will be associated with the Department of Trade
and Industry and will examine problems in individual
industries with a view to advising the Government through the
Minister for Trade and Industry.
( it) The existing Special Advisory Authority for manufacturing
Industries will be available to deal with emergency cases.
The Authority will, if found necessary, be streamlined and
strengthened. This Authority has power to act at once to
recommend additional protection to meet any abnormal
competition from imports which could Include that resulting
from the devaluation of other currencies. Action taken by the
Authority Is subject to review by the Tariff Board.
q ( iii) A committee-will be set up, consisting of Government
officials and representatives of -manufacturing
industry and commerce, to Investigate export
problems which individual firms and Industries
might bring to It as a result of devaluation.
Reports of this committee will, if necessary, be
brought before a committee of the Cabinet,
comprising the Minister for Trade and Industry,
the Treasurer and the Minister for Labour and
National Service.
( Iv) A new five-year Pay-roll Tax Export Incentive scheme
has also been approved. The Export Development
Council had offered advice on this matter. The new
scheme will replace the existing one when it expires
next year. The scheme will be more appropriate to
cu rrent and prospective circumstances In encouraging
exports of manufactures.
The Market Development Allowance income
tax rebate will be set at 42.5 cents in the dollar,
compared with 37.5 cents In the dollar under the
existing scheme. These new arrangements will begin on
1st July, 1968. Further details wiill. be
announced by the Minister for Trade and Industry.
CANBERRA, December, 1967