11 INDUSTRY, SCIENCE AND TOURISM
11.1.1 AusIndustry
11.1.2 Industry Liaison
11.1.6 Science and Technology
11.4-7 NSC, AIMS, ANSTO, CSIRO
11.9 Australian Customs Service
General
The stated objective of the AusIndustry sub-program is to 'enhance the international competitiveness of Australian business by working with firms to introduce best practice enterprise development and innovation.'
AusIndustry was launched on 28 June 1995 as the single entry point for business to access all government assistance programs. Its services are provided in partnership with the States and Territories. Part of the motivation for establishing AusIndustry was the realisation that business was intimidated by the vast array of different schemes and acronyms. AusIndustry claims it offers a single gateway to over 500 business assistance programs.
In addition to the first two measures listed above, a range of other activities are also abolished. Some of those are initiatives which were announced in the Innovation Statement under the previous Government. The winding up of a number of smaller activities goes part of the way to finance some new research and development (R&D) initiatives. In general, the measures abolished in this Sub-program appear to involve activities which aim to improve management, technological skills and other business skills. New measures, of which START is the prime example, assist enterprises with already well developed proposals. While the total budget has greatly increased, the new emphasis appears to be a more arms-length relationship with business.
Reductions in Funding for Innovation Flagship Projects
This is a post 1995-96 Budget Measure - agreed to but at reduced funding levels. It was an Innovation Statement measure which aimed to fund a small number of leading-edge projects to demonstrate Australian capabilities in prototype / production capacity and bring science, industry and users together to speed the development of new products. The specific projects included a National Advanced Minerals Technology Pilot Plant, an Australian Maritime Hydrodynamic Testing Facility and a Magnetic Resonance Facility for use in the advanced diagnosis of cancer. The reduced level of funding will allow one project to proceed, involving reduced funding in 1996-97 and 1997-98.
Reduction in Funding for the Development and Application of Technology in Industry Program
This measure terminates the technology development component of the scheme.
This is one of the Working Nation initiatives designed to improve industry's access to and take up of advanced technology and to facilitate international collaboration in the development and application of high technology.
AusIndustry - Reductions in Funding
The savings here are obtained through reductions in the Enterprise Development Program and terminating the Access to Export Finance Advice Program. The former comprises payments to the States under bilateral Commonwealth / State agreements.
Strategic Assistance for Research and Development (START) Program
This scheme is designed to assist firms with R&D where access to finance is the limiting factor. START absorbs the R&D Syndication Program and provides for support through grants, loans and interest subsidies. Approved projects will be decided by the Industrial Research and Development Board.
Research and Development Grants
This scheme was a post 1995-96 Budget Measure, announced in the Innovation Statement, and continues under the new Government. The Innovation Statement, which took advantage of an Industry Commission report on research and development, announced continued funding for the three years 1996-97 to 1998-99.
This grant scheme is effectively the equivalent to the R&D tax concession, but available as a grant for companies in a tax loss position. Those companies are therefore unlikely to be able to benefit from the R&D concession. However, unlike the tax concessions, grants are provided on a competitive basis. Applications are approved by the Industry Research and Development Board.
While the Department has developed an evaluation strategy, there is no indication of a review process to inform policy for 1999-2000 and subsequent years.
General
This Sub-program contains a number of activities across a range of industries; engineering and shipbuilding through to telecommunications and computing equipment and services. Despite a number of savings measures in this Budget, total outlays are none the less estimated to increase substantially in 1996-97.
The following are the main measures likely to be of interest. The bounties on computers, shipbuilding and books are designed to provide assistance against imports with much the same effect as tariffs. The difference is that the costs of protection through bounties is borne by taxpayers rather than users. However, the decision to abolish these bounties does open the Government to the criticism that may be mixing up decisions on industry protection with budgetary considerations.
Computer Bounty
This bounty will stop as of 1 July 1997. As part of the Innovation Statement, the computer bounty was extended under the previous Government at a rate of 8% in 1996 and 5% from 1 January 1997. That rate aligns computer bounty assistance to the 5% general rate of tariff assistance to manufacturing industries. While Australia is a significant producer of hardware, increasingly the emphasis in the industry is switching to software and services, such as systems integration. Nevertheless, exports of hardware are much higher than services and have been growing rapidly. Exports of computer parts and units reached $1702 million in 1995-96.
Shipbuilding Bounty
Applications for assistance from this bounty cease as of Budget night following the passage of the relevant legislation.
Shipbuilding has been a recent Australian success story with a rapid increase in exports of fast ferries and yachts to Asian and other countries. This new focus has compensated for the decline in traditional shipbuilding for domestic sales. Shipbuilders have made public comments suggesting the removal of the bounty will force them offshore.
Book Bounty
No new bounty commitments are to be entered into as of Budget night following the passage of the legislation.
The printing industry is perhaps unique, being subject to heavy competition from imports, but finding the market in our region difficult to penetrate. The limited market for English language works in our region imposes a natural barrier to Australian exports.
Assistance for book printing is currently under review by the Industry Commission.
Machine Tools and Robots Bounty
No new bounty payments are to be entered into as of Budget night.
A major aim of this scheme had been to encourage the use of computer assisted manufacturing in Australian industry.
The Science and Technology Division provides a diverse range of activities including policy support, project funding, international liaison and collaboration. The latter allows for maintenance of Australian expertise in key disciplines to advance our research and development interests. However, the Government has decided not to implement the proposed Research Commercialisation Service and the International Expert Advisory Panel. These were to provide access to commercialisation advice aimed at capturing the benefits of R&D.
A recent review of the Co-operative Research Centres (CRC) Program found that it had improved Australia's research culture and collaboration between academia, industry and government agencies, with excellent prospects for commercial applications and products. The Government has decided to fund two additional CRCs and fund new centres once old contracts expire. Overall, the CRC Program has become an innovative, collaborative success. Given cutbacks to the R&D Tax Concession Program (see elsewhere), its future becomes even more important to Australian innovation.
The Government has also decided to transfer primary responsibility for Australian space activities from the Department to the CSIRO Office of Space Science and Applications. A new thrust will be a program to build and launch a small applications micro-satellite, named FEDSAT, by the centenary of Federation in 2001. CSIRO shall establish a Space Activities Board and also manage the activities of the NASA tracking station at Tidbinbilla to better link with our radio astronomy expertise. The space budget for 1996-97 is $2.6 million and also involves work towards the creation of a new proposed CRC. These new arrangements are more practical than past policy work and focus on a beneficial demonstration project.
National Standards Commission (Program 4.0)
Following the Report of the Committee of Inquiry into Australia's Standards and Conformance Infrastructure (Kean Report), the Budget provides maintenance of funds and staffing for the National Standards Commission.
Australian Institute of Marine Science (Program 5.0)
The Australian Institute of Marine Science has a mild net budget decrease with a slight staffing increase. The Government expects AIMS to raise at least 20% of its funding from external sources. The Minister has announced a new marine science and technology plan.
Australian Nuclear Science and Technology Organisation (Program 6.0)
The Australian Nuclear Science and Technology Organisation also has a mild net budget decrease along with a small staffing decrease. The Government expects ANSTO to raise at least 20% of its total funding from external sources such as the manufacture and sale of radioisotopes.
Commonwealth Scientific and Industrial Research Organisation (Program 7.0)
The Government had previously exempted CSIRO from the efficiency dividend payback requirement, on Commonwealth Own Purpose Outlays and Special Purpose Payments, by providing increased annual appropriations to total $65.4 million over four years, but has now decided to tax the body for the dividend, an amount of $55.1 million. CSIRO must deliver savings of around $60 million from asset sales and efficiency gains, countered by base funding restoration of $60 million over four years. So with a grant of $115 million, less the aforementioned deductions, essentially nothing remains. The Government is also deciding whether the CSIRO's cash reserves may be available for transfer into consolidated revenue. However, the Minister has deferred Cabinet's decision on this matter for one year. Meanwhile, CSIRO's staff levels should remain intact, pending organisational rearrangements and efficiency measures. The Government expects CSIRO to raise at least 30% of its total funding from external sources.
The Diesel Fuel Rebate Scheme (DFRS) has been in place since 1982 (replacing an exemption certificate arrangement introduced in 1957) whereby eligible users of diesel fuel can claim rebates of excise paid on diesel fuel. Declared eligible users are those engaged in primary industries, mining and certain other users including heating/cooking for some medical and nursing premises.
Diesel fuel excise payments are aggregated with all excise revenues collected under the Excise Act 1901.
DFRS expenditure estimates for 1996-97 by categories are:
|
Mining and Mineral Resources |
$793.7 million |
|
Agriculture, Forestry and Fishing |
$584.6 million |
|
Other |
$11.3 million |
|
TOTAL |
$1389.6 million |
In confirming the continuation of the DFRS, the government has indicated that measures will be taken to revamp certain eligibility requirements and the administration of the Scheme. Resultant savings of $60 million are estimated for 1996-97, rising to $123.2 million in 1997-98, $126.9 million in 1998-99 and $130.7 million in 1999-2000.
In assessing the question of continuation of the DFRS, the degree to which the rebates contribute to export industry competitiveness and the merits of developmental assistance to remote regions, need to be balanced against potential distortions in resource allocation and the budgetary impact of increasing annual outlays estimated to exceed $1.6 billion in 1999-2000.
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