G/SCM/Q2/AUS/57  
 
4 October 2016 
(16-5282) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original: English  
 
  SUBSIDIES  
REPLIES TO QUESTIONS FROM CANADA1 REGARDING  
THE NEW  AND FULL  NOTIFICATION OF AUSTRALIA2 
The following communication , dated 30 September 2016, is being circulated at the request of the 
delegation  of Australia . 
 
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Australia thanks C anada for its questions and provides the following replies.  
FEDERAL PROGRAMMES  
Question  1 
1.1 Emergency Water Infrastructure Rebate  (EWIR)  
Could Australia confirm what types of farm businesses (primary producers) benefitted 
from the EWIR? In terms of busin ess size, were they small, medium or large producers 
that participated in the program? Could Australia clarify the level of expenditure 
incurred/recorded for the period under review?  
Reply  
Eligibility criteria applied to this drought assistance measure. On ly drought affected grazing 
industry (beef cattle, sheep, dairy cattle, goats, deer or horses that were not normally hand -fed) 
businesses were eligible to participate. Data on the relative size of the grazing enterprises that 
qualified for assistance under  this measure was not recorded. This drought assistance program 
was not means tested, and so any eligible grazing business that could demonstrate a need for 
emergency water infrastructure assistance to meet animal welfare needs was eligible to receive 
the rebate for their eligible water infrastructure expenditure.  
The level of government expenditure on rebates in 2013 -2014 to 2014 -2015 was $77.4 million.  
The report states that the maximum limit is $20,000 per property and may be extended 
to $30,000. Could A ustralia confirm the frequency of rebates above $20,000 and provide 
detailed information on the circumstances when this type of support was provided?  
Reply  
In order to qualify for a rebate above $20,000 and up to the limit of $30,000 a property needed to 
have an approved Drought Management Plan. This was to ensure there was a focus on primary 
producer self -reliance, resilience, preparedness and risk management.  
Data on the number of claims above $20,000 is not discernable from the supplied data. Due to 
privacy considerations with the exchange of information between jurisdictions, only data on the 
                                                
1 G/SCM/Q2/AUS/54.  
2 G/SCM/N/2 84/AUS.  G/SCM/Q2/AUS/57  
 
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  number of claims per local government area and the total payable amount is available. The total 
number of paid claims for the rebate was 5,912. With total governmen t expenditure of 
$77.4  million, the average paid claim was in the order of $13,100.  
Question 2  
1.2 Drought Concessional Loans Scheme (DCLS)  
Could Australia confirm the total cost of the subsidy provided through the DCLS?  
Reply  
The assistance provided acros s farm businesses in 2014 –15 is estimated to be about 
$1.537  million.  
This estimate is based on a calculation of the difference between the interest a farm business 
might have paid under commercial loan conditions and the concessional interest repayments u nder 
the Drought Concessional Loans Scheme (i.e. the benefit of the assistance).  
Question 3  
1.3 Drought Recovery Concession Loans Scheme (DRCLS)  
Could Australia provide more information on the methodology applied to execute the 
DRCLS?  
Reply  
In 2014, an am endment to the Financial Framework (Supplementary Powers) 1997 Schedule 1AB  
was passed to give the scheme legislative underpinning.  
This 2014 –15 assistance was delivered through the New South Wales and Queensland state 
government agencies.  Loan agreements and service level agreements, which underpin the delivery 
of the scheme in each jurisdiction, are agreed between the Commonwealth and each of the state 
governments.  
What are the fundamental differences including the eligibility criteria, if any, between 
the DCLS and DRCLS? Was there a timeframe associated with the unprecedented 
droughts? What were the defining factors: time, geographical area or other?  
The two loan schemes are designed to be used for different purposes, have different eligibility 
criteria, and offer different loan terms and interest rates.  
Drought Concessional Loans can be used for debt restructuring, operating expenses and drought 
recovery and preparedness activities.  As at 1 August 2016, the DCLS interest rate is 3.05%.  
To be eligible for a Drought Concessional Loan, applicants must demonstrate  the financial impact 
being experienced by their farm business is a result of the effects of drought, which is considered 
to be a rainfall deficiency equivalent to, or worse than, either a 1 in 10 yea r or a 1 in 20 year 
rainfall event as indicated in the Rainfall Deficiency Report produced by the Bureau of 
Meteorology 's Australian Rainfall Deficiency Analyser . 
Drought Recovery Concessional Loans are to assist farm businesses experiencing unprecedented 
drought conditions to recover when the season turns, by undertaking planting and/or restocking 
activities.  As at 1 August 2016, th e DRCLS interest rate is 2.66%.  
To be eligible for a Drought Recovery Concessional Loan, applicants must demonstrate  their far m 
business has experienced a rainfall deficiency as indicated in the Rainfall Deficiency Report 
produced by the Bureau of Meteorology 's Australian Rainfall Deficiency Analyser equivalent to, or G/SCM/Q2/AUS/57  
 
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  worse than, either a 1 in 50 year or 1 in 100 year rainfall ev ent, with special conditions applicable 
in the case of Queensland.  
Question 4  
13.2 State Investment Attraction Scheme  
Based on information in Australia's  notification, the State Investment Attraction Scheme 
was available to proponents of projects that prom oted internationalisation through 
export orientation and/or import replacement. Could Australia explain how these 
requirements are consistent with Articles 3.1(a) and (b) of the Agreement on Subsidies 
and Countervailing Measures?  
Reply  
The majority of the State Investment Attraction Scheme (SIAS) funding was used for facilitating 
investment.  Projects were considered on the basis of a range of guidelines, one of which was the 
internationalisation of the project through, for example, strengthening  supply chai n relationships.  
Grants provided were not contingent on export performance or export targets being achieved.  Nor 
were grants provided contingent on the use of local content.  
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