WORLD TRADE
ORGANIZATIONG/SCM/Q2/AUS/22
18 September 2002
(02-4982)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the EUROPEAN COMMUNITIES1
Regarding the New and Full Notification of AUSTRALIA2
The following communication, dated 17 September 2002, has been received from the
Permanent Mission of Australia.
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A. GENERAL QUESTION
All schemes (except IV PASSENGER MOTOR VEHICLES), point 2:  which is exactly
the period covered, i.e. which months are covered by FY 2000/2001?
Reply
Financial year 2000/2001 covers the months from 1 July 2000 through to 30 June 2001.
B. QUESTIONS ON FEDERAL PROGRAMMES
I.(a) Printing industry competitiveness scheme
Point 4:  Is the Budget Paper No. 2, 1999-2000 the only legal basis?  If not, please
indicate the legislation on which the scheme is based.  Which is the administration/authoritydeciding on the subsidies allocated under this scheme?
Reply
The scheme is not legislatively based.  It is an administrative scheme which is delivered by
AusIndustry.
Point 9:  How many of the 87 book printing firms that have made claims under the
scheme have actually benefited from it?  Does the remark “the bulk of book production is
destined for the domestic market” me an that there are no trade effects?
                                                     
1 G/SCM/Q2/AUS/21
2 G/SCM/N/71/AUS & Corr.1G/SCM/Q2/AUS/22
Page 2
Reply
Generally speaking, all firms making eligible claims would have been paid.  The Government
announced on 14 May the early closure of the scheme.  Claims made by 14 May 2002 for the
production of books before 30 June 2002 would be processed.  The Government is not aware of anytrade effects.
I.(b) Book Production – Enhanced Printing Industry Competitiveness Scheme (EPICS)
Grants
Point 4:  Which is the administration/authority deciding on the grants allocated under
this scheme?
Reply
AusIndustry.
Point 5:  Which are the eligibility criteria?
Reply
Australian incorporated companies or partnerships with demonstrated commitment to book
production are eligible to apply for funding.
Point 9:  How many of the 100 book production firms that may qualify for assistance
have actually benefited from the scheme?  Does the remark “the bulk of book production is
destined for the domestic market” me an that there are no trade effects?
Reply
104 firms have benefited from the scheme.  The Government announced the early closure of
the scheme on 14 May 2002.  The Government is not aware of any trade effects.
II. DAIRY
Point 6:  Which are the eligibility criteria?
Reply
The funding is provided to dairy producers who could prove that they delivered milk during
financial year 1998/1999 (i.e. 1 July - 30 June).
Point 7:  Is the amount of $A 200,669 mentioned under point 8 (statistical information)
the annual amount budgeted for this scheme?
Reply
Total product specific AMS in financial year 2000/2001 is just over AUD 200 million.  The
Dairy Industry Adjustment Package (DIAP) includes payments of AUD 1.63 billion (the DairyStructural Adjustment Package) paid in equal quart erly instalments over an eight year period ending
30 June 2008.  In addition to this amount AUD 119 million has been allocated in financial year
2000/2001 as additional market milk payments.G/SCM/Q2/AUS/22
Page 3
Point 8:  Is it correct that ML equals million litres?
Reply
Yes.  ML equals million litres.  Milk production in financial year 2000/2001 is in excess of
10 billion litres.
III. INVEST AUSTRALIA (a)
Point 4:  Which is the legislation under which this subsidy is granted?
Reply
There is no legislation covering the Strategic Investment Coordination (SIC) process.
Requests for assistance under the SIC process are considered on a case by case basis.  Funding is
allocated through the Budget Appropriation Bills in relevant years.
Point 5:  To which taxes does the tax relief relate?  Which infrastructure services may
be granted?
Reply
No tax relief was granted in FY 2000/2001.
Emphasis is on common-use infrastructure such as roads, water supply, gas supply and power
generation and distribution.
Point 7:  Could you give a breakdown per subsidy type (grants, tax relief, provision of
Reply
The latest estimate of payments under the SIC process in FY 2000/2001 is AUD 54.5 million
of which AUD 35 million is currently held in escrow.  The br eakdown per subsidy type is as follows:
Grants:  AUD 4.5 million; Loan: AUD 20 million (in escrow); Purchase of technology license:AUD 30 million (AUD 15 million in escrow).
Point 8:  What is the start date and the duration of the programme?
Reply
The programme commenced in December 1997.  It is an ongoing programme.
III. INVEST AUSTRALIA b)
Point 4:  Is the decision by Commonwealth and State Trade and Industry Ministers the
only legal basis?  If not, please indicate the other legal bases.  Which is the
administration/authority deciding on the subsidy allocated under this scheme?
Reply
Yes, the decision by Commonwealth and State Trade and Industry Ministers in 1990 was the
legal basis for establishing the programme.  There is no supporting legislation.G/SCM/Q2/AUS/22
Page 4
Invest Australia was the administration/authority which assessed grant applicants.  Funding
was appropriated in the Commonwealth Budget.
Point 8:  Could you indicate the start date and the duration of the programme?
Reply
The programme commenced in 1990 and finished on 30 June 2002.
IV. PASSENGER MOTOR VEHICLES
Point 4:  Which is the administration/authority deciding on the subsidies allocated
under this scheme?
Reply
The administration/authority deciding on the subsidies allocated under this scheme is the
Department of Industry, Tourism and Resources in accordance with the Automotive Competitiveness
and Investment Scheme (ACIS) legislation.
V. PHARMACEUTICAL
Point 4:  Please indicate the legal basis and the administration/authority deciding on the
subsidies allocated under this scheme.
Reply
The Pharmaceutical Industry Investment Programme (PIIP) has a contractual rather than
legislative basis.  The programme is administered by the Pharmaceutical Benefits Pricing Authority.
VI. SHIPBUILDING
(a) and (b), Point 4:  Which is the administration/authority deciding on the subsidies
allocated under this scheme?
Reply
The background and authority for the shipbuilding bounty and the Shipbuilding Innovation
Scheme is the Bounty (Ships) Amendment Act (No. 14, 1999).  Both programmes are administered by
AusIndustry.
(a) Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Could
you alternatively provide the total amount or the annual amount budgeted for that subsidy?
Are the figures mentioned under point 9 (statistical information) the annual payments for thatprogramme? Which period do 1998-99, 1999-00, 2000-01 exactly refer to?
Reply
The subsidy amount per unit cannot be given as the amounts are variable across a wide range
- as this is an entitlement scheme the annual budget is only a best estimate and the relevant figures for
this period are the actual payments (at point 9).  Th e figures at point 9 are the annual payments for the
programme.  The periods 1998-99, 1999-2000 and 2000-2001 refer to financial years running from
1 July to 30 June the following year.G/SCM/Q2/AUS/22
Page 5
(b) Point 7:  To which period do 1999-00 and 2000-01 refer to exactly?
Reply
Period 1999-2000 refers to 1 July 1999 to 30 June 2000.  Period 2000-2001 refers to
1 July 2000 to 30 June 2001.
(a) Point 8:  Are the rules applying to the phasing out arrangement the same as the ones
that were applied to the scheme described?  If not, please describe any differences.
Reply
The rules for the phasing out arrangement are as described at Point 8.
VII. TEXTILES, CLOTHING & FOOTWEAR
Point 4:  Which is the administration/authority deciding on the subsidies allocated
under this scheme?
Reply
The Textiles, Clothing and Footwear Stra tegic Investment Programme (TCF SIP) is
administered by the Department of Industry, Tourism and Resources.  Authority for the programme is
the Textile, Clothing and Footwear Stra tegic Investment Programme Act 1999  (No. 182, 1999).
VIII. WHEAT
Point 4:  Is the Budgetary Appropriations Bi ll Number 2 the only legal basis?  If not,
please indicate the legislation on which the scheme is based.
Reply
Yes.  Funding is generated annually through this Appropriations Bill.
Point 8:  Please indicate the start date and the duration of the programme.
Reply
This programme was introduced in 1989 and is currently funded until 30 June 2003.  Funding
after this date is reliant on the outcome of the Government review of this scheme.
C. QUESTIONS ON SUB-FEDERAL PROGRAMMES
ACTBIS
Point 4:  It is stated that there is no specif ic legislation that this scheme is based on.
Which is the administration/authority that decided the establishment of the scheme and which
is the administration/authority deciding on the subsidies allocated under this scheme?G/SCM/Q2/AUS/22
Page 6
Reply
The ACT Government is the authority that established the scheme.  The Scheme is
administered by the Chief Minister 's Department which determines the allocation of subsidies.
Point 5:  If the tax concessions do not only relate to payroll taxes, to which other taxes
do they relate to?  Please define “training and workforce development” and “other forms of
assistance”.
Reply
The main forms of assistance available under the scheme are waivers or concessions on stamp
duty and payroll tax, land discounts and the provision of infrastructure.  As clients' needs differ
widely, there is also some built-in flexibility with regard to the types of other assistance that may be
offered.  Depending on client needs, this may include provision of a range of specific training
programmes, including workforce and skills development programmes, at no cost to the client.
Point 6:  Please specify “suitability of the industry to the ACT”.
Reply
“Suitability of the industry to the ACT” reflects the programme's economic development
objectives.  It is the ACT Government's intention to target assistance to industry sectors in which the
ACT has a natural or strategic advantage. “Suitability” is also assessed with regard to whether
prospective applicants pose any undue detriment to the survival of existing ACT businesses.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
ACTBIS was established in financial year 1995/1996.  The scheme was replaced by the ACT
Business Incentive Fund (ACT BIF) in 2001.  Unlike ACTBIS, there are no cash grants available
under ACT BIF.  The revised scheme commenced in financial year 2001/2002.  While no end date is
specified, the programme may be subject to future review in line with broader government priorities
and objectives.G/SCM/Q2/AUS/22
Page 7
NEW SOUTH WALES IAF
Point 5:  To which taxes do the rebates  granted relate and how are the rebates
calculated? Could you explain why this tax rebate is considered to be revenue neutral?
Reply
Partial rebates of State taxes are provided to some projects.  The rebates are limited to a
proportion of the State tax paid by the project and are for a limited time, usually between two and five
years.  The taxes that may be considered for rebates include Payroll tax and Stamp Duty (i.e.
conveyancing duty).
Rebates are calculated on a case-by-case basis using economic and financial modelling.  Only
around 25 per cent of projects receive financial assistance.  This equates to around ten projects per
year.
Rebates are said to be revenue neutral because their provision does not cost the State money.
The rebates are always less than the amount of tax received from the project.  Rebates are only
provided to projects which would otherwise not establish in New South Wales.  Therefore a
proportion of revenue, which would not otherwise be received , is rebated.  Therefore the rebate is at
no cost to the budget.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
The Industries Assistance Fund (IAF) is ongoing under statute.  It is limited by the annual
budget provision by Parliament.
NEW SOUTH WALES Regional Business Development Scheme
Point 4:  It is stated that there is no specif ic legislation that this scheme is based on.
Which is the administration/authority that decided the establishment of the scheme?
Reply
The Regional Business Development Scheme is a discretionary function of the Department of
State and Regional Development.
Point 7:  The information given seems to relate to a series of schemes of which the
Regional Business Development Scheme was only one.  Is it possible to indicate the amount in
$A of subsidy per unit for this particular scheme?  Alternatively, please indicate the total
amount or the annual amount budgeted for that subsidy.G/SCM/Q2/AUS/22
Page 8
Reply
The Regional Business Development Scheme did not have a separate allocation in financial
year 2000/2001.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
The Regional Business Development Scheme was introduced in 1989.  It is ongoing which
means that there is no end date specified.
NORTHERN TERRITORY Industry and Business Assistance
Point 4:  It is stated that there is no specif ic legislation that this scheme is based on.
Which is the administration/authority that decided the establishment of the scheme?
Reply
The authority for this scheme is based on the NT Administrative Arrangements Order and on
case-by-case Ministerial and Government approval.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
The programme has no defined end date.  It is subject to annual budget allocation, eligible
projects and specific Ministerial approvals.
QUEENSLAND, QIIS
Point 4:  It is stated that there is no specif ic legislation that this scheme is based on.
Which is the administration/authority that decided the establishment of the scheme?
Reply
The Queensland Investment Incentives Scheme is an administrative arrangement under the
authority of the Director-General of the Department of State Development.
Point 6:  Which are the eligibility criteria?G/SCM/Q2/AUS/22
Page 9
Reply
Financial incentives are only provided in a small number of cases for the location of major
projects and strategic investments in Queensland.  To be eligible under this programme, a company or
project must:
• Promote the competitive base of the State economy
• Provide a significant net economic benefit to the State
• Demonstrate commercial viability in the absence of incentives
• Demonstrate a need by the Government to provide support to overcome a short-term impediment
to a project's development in Queensland
• Demonstrate no significant detriment to and/or substitution for existing businesses in Queensland.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.
SOUTH AUSTRALIA Industry Investment Attraction Fund
Point 4:  Which is the administration/authority deciding on the subsidies allocated
under this scheme?
Reply
The South Australian Cabinet (Executive Government) approves assistance over
AUD 4 million.  Below that amount, authority rests with the Minister for Industry, Investment and
Trade.  The Office of Economic Development can administer assistance, within the scheme, up to the
value of AUD 200,000.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
The scheme has its origins in the Industry Development Act (1941)  and there is no end date to
the scheme.G/SCM/Q2/AUS/22
Page 10
TASMANIA Investment Attraction Programme
Point 6 (level of subsidy per unit):  Is it possible to indicate the amount in $A of subsidy
per unit?  Alternatively, please indicate the total amount or the annual amount budgeted for
that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 7 (duration):  Please indicate the start date.  Does the indication “the programme
is ongoing” mean that it is unlimited?  If not, please indicate the end date.
Reply
The basis of the programme is the Tasmanian Development Act 1983.  There is no end date to
the programme.
VICTORIA, Investment Attraction programme
Point 4:  Since the Economic Development Act 1981 was repealed, which is now the
legislative basis for this programme?  Is the Department of State & Regional Development the
administration/authority that is the deciding  on the subsidies allocated under this scheme?
Reply
The programme does not operate under any specific piece of legislation.  However, since the
Economic Development Act 1981  was repealed on 14 April 1994, any funds expended under the
Investment Attraction Programme have been appropriated under the global budget of the Department
of Innovation, Industry and Regional Development (formerly the Department of State & Regional
Development).
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
The Investment Attraction Programme is an  ongoing policy of the Victorian State
Government with monies allocated for its implementation each year.  There is no end date.
WESTERN AUSTRALIA, Industry Incentive Scheme
Point 4:  Which is the legislation that this scheme is based on?  If there is no specific
legal basis, which is the administration/authority that decided the establishment of the schemeG/SCM/Q2/AUS/22
Page 11
and which is the administration/authority deciding on the subsidies allocated under this
scheme?
Reply
There is no specific piece of legislation.  The scheme is funded through budget appropriations
allocated to the Department of Industry and Technology.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount  or the annual amount budgeted for that subsidy.
Reply
The annual budget for this programme has been reflected in the table on page 14 of
G/SCM/N/71/AUS.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
There is no end date.
WESTERN AUSTRALIA, Industry Relocation Scheme
Point 4:  Which is the legislation that this scheme is based on?  If there is no specific
legal basis, which is the administration/authority that decided the establishment of the schemeand which is the administration/authority deciding on the subsidies allocated under this
scheme?
Reply
There is no specific piece of legislation.  The scheme is funded through budget appropriations
allocated to the Department of Industry and Technology.
Point 7:  Is it possible to indicate the amount in $A of subsidy per unit?  Alternatively,
please indicate the total amount or the annual amount budgeted for that subsidy.
Reply
As provided in document G/ SCM/N/71/AUS on page 25, two loans were approved valued at
AUD 307,000 of which AUD 228,000 was provided during financial year 2000/2001.
Point 8:  Please indicate the start date.  Does the indication “the programme is ongoing”
mean that it is unlimited?  If not, please indicate the end date.
Reply
There is no end date.G/SCM/Q2/AUS/22
Page 12
D. QUESTION ON OTHER SCHEMES
Could you indicate whether the following programmes were in force during the
reporting period?  If yes, please provide information on them in the agreed format:
Export Market Development Grant Scheme (EMDGS), created by the Export Market
Development Grants Act 1997;
Textiles, Clothing and Footwear plan (TCFP), including incentives for international
competitiveness programme, import credit scheme, infrastructure support programme, national
industry extension programme, capitalisation grants programme, labour adjustment
programme, quick response programme, overseas assembly programme;
Regional Scheme:  Industry, Regional and trade support programme (IRTSP);
Reply
Australia notes that these questions and references to programmes are in relation to the
programmes cited in a countervailing duty investigation of imports of polyester staple fibre initiated
in April 1999.  The European Communities has investigated the programmes, many of which have not
been in operation for some years.  We would resp ectfully refer the European Communities to Council
Regulation (EC) No 978/2000 of 8 May 2000 which cont ains the findings of that investigation, as
well as the submissions by the Australian Government  to the European Commission as part of those
proceedings.
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