WORLD TRADE  
ORGANIZATION  G/SCM/Q2/AUS/35 
1 April 2008 
 (08-1434) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Replies to Questions Posed by the SEPARATE CUSTOMS TERRITORY OF  
TAIWAN, PENGHU, KINMEN AND MATSU1 Regarding the  
New and Full Notification of AUSTRALIA2 
   The following communication, dated 28 March 2008, is being circulated at the request of the Delegation of Australia.   
 
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Question 1 
 
 As to the Forestry section of the Austra lian Notification, we would like to know the 
amount of exportation of lumber and timber fr om Australia before the commencement of these 
programmes and during the subsidising period.   
 
Reply
 
 
The following table indicates the volumes of various timber products exported from Australia 
on a world-wide basis and specifically to Chinese Taipei for the financial years 2004/05, 2005/06 
and 2006/07.  As advised in G/SCM/N/155, these pr ograms commenced in financial year 2005/06 are 
scheduled to conclude at the end of financial year 2006/07.    
Financial year 
2004/05 2005/06 2006/07 
Worldwide 
(,000m3) Chinese 
Taipei 
(,000m3) Worldwide 
(,000m3) Chinese 
Taipei 
(,000m3) Worldwide 
(,000m3) Chinese 
Taipei 
(,000m3) 
1065.8 45.9 1165.3 91.2 1597.5 102.2 
 
Source :  Australian Forest and Wood Products Statisti cs – March and June quarters 2007 (Australian 
Bureau of Agricultural and Resource Economics, December 2007).   
 
                                                      
1 G/SCM/Q2/AUS/33.   
2 G/SCM/N/155/AUS & G/SCM/N/155/AUS/Add.1.   G/SCM/Q2/AUS/35 
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  Question 2 
 Additionally, we are also wondering whether there is any case in which the applicant receives 
grants that cover more than 50 per cent of the to tal cost of the applicant's investment under the 
Tasmanian Country Sawmills Assistance Programme .   
 Reply
 
 
There are no cases where an applicant under the Tasmanian Country Sawmills Assistance 
Program has received in excess of 50 per cent funding of their entire project.    
Question 3 
 
 With reference to the Structural Adjustment Fund for South Australia  (SAFSA) and 
Innovation and Investment Fund for South Australia  (IIFSA), most of the information contained 
in these two programmes is similar.  Therefo re, we would like to know if there are any 
differences between them.  If so, what is the purpose for such a design?   
 Reply
 
 
There is no fundamental difference between the two funds.   
 
Question 4 
 
 Regarding Automotive Competitiveness and Investment Scheme , it is said, in the 
Notification (Form of the subsidy), "participants receive duty credits which can be used to pay customs duty on certain eligible imports.  Duty cred its can also be sold or transferred to a third 
party."  We are wondering whether "a third pa rty" should also be a participant producing 
motor vehicles, automotive components, automotive machine tools or automotive service.  If there is no limitation on the third party to receive  such duty credits, we doubt that the proposed 
purpose of this programme can be reached.    
Reply
 
 
Under the Automotive Competitiveness and Invest ment Scheme (ACIS) a duty credit can be 
transferred to anyone at all, but that in practice th ey tend to be transferred only to parties who can use 
them to offset an import liability on automotive goods.   These tend to be motor vehicle importers and 
component importers.    
Question 5 
 
 With regard to the Sustainable Regions Programme , we realise the purpose is to provide 
an opportunity for regional communities to lead  their own development by identifying and 
addressing " priority issues " in their regions.  We will be very grateful if the Australian 
Government could offer some examples i ndicating what priority issues are.   
 Reply
 
 
 The Sustainable Regions Programme assists re gional communities to address priority issues 
they have themselves identified.  The following ar e examples of Regional Priorities identified for the 
ten identified Sustainable Regions based on prev ious research, strategic planning and community 
consultation:     G/SCM/Q2/AUS/35 
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  • Value adding to existing and growing industries such as the agriculture, forestry and fishing 
and manufacturing industries;   
• Establishing  new sustainable, environmentally friendly industry;   
• Identifying and addressing yout h needs and developing the enth usiasm, skills and optimism of 
the region's youth resulting in youth retention;   
• Strategically linking education and training with industry growth;   
• Encouraging the local development of Tourism;   
• Improvement of  regional employment opportunities for local people;   
• Improvement of selected lifestyle and business services;   
• Development of key infrastructure linked to th e strategies and needs of the region such as 
improvement of transport and access;   
• Management and improvement of natural assets;   
• Enhanced capacity building and regional development capabilities;   
• Utilising and enhancing the region's amenity and modern lifestyle choices;   
• Advancing social inclusion and community involvement, and improving community 
wellbeing;   
• Recognising and addressing the major social issues in the region;   
• Development of local leadership capabilities;   
• Indigenous enterprise and economic development;   
• Identification of and adapting to the consequences of an ageing population;  
• Maintaining natural resources or reversing past de gradations to ensure they exist for future 
generations.   
 
Question 6 
 
 In the Textiles, Clothing and Footwear part of the Notification, it seems that Textile, 
Clothing and Footwear (TCF) Post-2005 Assistance Package  consisted of the TCF Strategic 
Investment Programmes  (including TCF Post-2005 Scheme  and TCF Small Business 
Programme ), the TCF Structural Adjustment Programme  and the Product Diversification Scheme .  
We would like to know more details about the TCF Post-2005 Scheme , TCF Small Business 
Programme  and TCF Restructuring Initiative Grants Scheme  which do not seem to be included in 
this Notification.   
 Reply
 
 
We also refer to Australia's earlier notif ication (G/SCM/N/123/AUS/Rev.1) which outlined 
the TCF Post-2005 scheme and to replies to previ ous questions on the operation of the scheme (see 
for example G/SCM/Q2/AUS/25, G/SCM/Q2/AUS/22, G/SCM/Q2/AUS/20).   
 
The TCF Post-2005 (SIP) Scheme is a $575 million scheme aimed at fostering a sustainable 
and internationally competitive TCF manufacturing i ndustry and TCF design industry in Australia by 
providing incentives which will promote investment a nd innovation.  The Scheme runs for 10 years, 
from 2005/06 to 2014/15 and provides two grant types.  Type 1 grants are in respect of TCF capital investment expenditure, including investment in ne w TCF plant and buildings; brand support; and for 
clothing and finished textile entities only, inv estment in non-production related information 
technology.  Type 2 grants are in respect of  TCF research and development expenditure, except 
leather and/or technical textile expenditure.   
  The TCF Small Business Program is a $25 m illion competitive grants  program aimed at 
improving the business enterprise culture of TCF small businesses that do not qualify for assistance 
under the TCF Post-2005 (SIP) Scheme.  The Program runs for 10 years, from 2006/07 to 2015/16.   G/SCM/Q2/AUS/35 
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   The TCF Restructuring Initiative Grant Scheme is part of the $50 million TCF Structural 
Adjustment Program that is aimed at supporting in dustry consolidation and labour market adjustment 
in Australia.  Under the Scheme, grants are av ailable to TCF entities that complete approved 
restructuring initiatives and incur expenditure on stat e-of-the-art second-hand TCF plant or equipment 
or activities ancillary to the restructuring initiatives.   
 
 Full information on the TCF schemes is available at www.innovation.gov.au/tcf
.   
 
Question 7 
 
 Additionally, we are also concerned ab out the criteria the Australian Government 
applies to determine whether a business is a small business in the TCF sector.   
 
Reply  
 
A TCF small business is defined in the Textile, Clothing and F ootwear Small Business 
Program Determination 2005 as an entity that has fewer than 20 employees and undertakes eligible 
TCF activities as defined by the TCF Post-2005 (S IP) Scheme.  For example, a TCF business that 
manufactures, or designs for manufacture, in Australia.   
 
Question 8 
 
 Finally, there are a lot of Programmes th at provide support for relevant regional 
development in Australia with terms such as "strategic" ( Industries Assistance Fund ), "strategic 
merit" ( Queensland Investment Incentive Scheme ), "strategic importance" ( Industry Investment 
and Attracting Fund , Investment Attraction and Industry Development Programme , Investment 
Incentive Scheme ), and "strategic industry" ( Investment Incentive Scheme ).  We would be very 
grateful if examples could be given to explanation to such terms.   
 
Reply  
 
While the specific eligibility criteria differ be tween programs, the types of industries or 
projects that are considered to be "strategic" are those that contribute to the development, expansion 
and diversification of the regional economy, for ex ample through job creation, increased investment 
and improved competitiveness.  In other words, such assistance is targeted at industries and projects 
that are considered important for the future ec onomic success of the region.  Following are some 
examples of industries or projects that are considered to be "strategic" (or of "strategic importance" or 
"strategic merit") under the specific regional programs.   
 
New South Wales:  Industries Assistance Fund  
 
The objective of the Industries Assistance Fund is to support strategic economic development 
of New South Wales.  Support is provided to fi rms or project proponents that can demonstrate 
benefits to the New South Wales community in terms of employment generation, economic value-
adding, or addressing value-chain gaps in strate gic industry sectors.  The NSW Government has 
identified innovation in the State as a strategic polic y.  The Government is initially focussing on the 
logistics and transaction services;  financial services;  entertainment, design and media;  manufacturing;  and resources industry sectors.   
 
Queensland:  Investment Incentives Scheme  
The Queensland Government is committed to creating an operating environment for business 
that will attract major new investments to the ec onomy and that will support the Government's Smart  G/SCM/Q2/AUS/35 
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  State Strategy.  Queensland Investment Incentives Scheme provides financial assistance to businesses 
that complement these Smart State priorities in te rms of innovation, key industry sectors and regional 
development.  Developing key industry sectors is a major priority for the Queensland Government.  
Currently, these key sectors of priority include biotechnology, creative industries, food and agribusiness.   
 
South Australia:  Industry Investment and Attraction Fund  
 
The Industry Investment and Attraction Fund (IIAF) ceased in July 2005.  The remaining 
financial commitments under the Industry Investment  and Attraction Fund are historical and in the 
coming years they will be reduced to zero.  Industries that have been assisted in the past have included 
(but are not exclusive to):  defence and aerospace, financial services, back office services, automotive 
and manufacturing.    
Tasmania:  Investment Attraction and Industry Development Programme 
 
Some examples of the projects assisted unde r the Investment Attraction and Industry 
Development Programme include:  facilitation of  pulp mill development;  pulp mill supplier 
development program;  Young Farmers Rebate;  enha nced incubation for the information technology 
industry.    Western Australia:  Investment Incentive Scheme  
 
The State Government aims to diversify the Western Australian economy beyond the current 
resources boom by building strong capabilities in biot echnology, ICT renewable energies and marine 
and defence.  In this context, the Investment In centive Scheme takes a targ eted incentives approach as 
a tool for strategic industry development with the aim of attracting investme nt in Western Australia 
that adds value and diversity to the State's ec onomic base and builds on the State's competitive and 
comparative advantages.      
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