Federal Cabinet approves $180M in incentives

Press, 8 April 1978, Page 17

Federal Cabinet approves $180M in incentives

i NZPA Canberra 1 i The Australian Federal (Cabinet has approved three■ export-incentive schemes; I estimated to cost sAustlBoM a year. ■ Government sources said (that the Cabinet had “ap-, proved in essence” all the) | recommendations contained ( I in four submissions on; : export incentives, but a' number of technical pro-i lems with the scheme’s; operations had to be cor-' rected before the decision; (would be announced. The submissions firstly recommended that the. present export market devel-| opment grants scheme,; which is designed to encour-’ age companies to seek the: development of overseas markets, should be basically; continued. I The Department of Finance is understood to have; estimated that this proposal’

; would cost about S3OM in a 'full financial year. The submissions also dealt; s with the new export-in-centive scheme that was; foreshadowed by the Prime' Minister (Mr Fraser) in his' Federal election campaign ( policy speech of November! (21. | The new incentive scheme) (is designed to reward (exporters for improved) export performance, and is (expected to cost the Govern-) (ment SI3OM annually. ) The new scheme is under-' | stood to provide for the; 'payment of taxable cash ; grants, based on a com- ( pany’s export performance ] during the last financial I year compared with its averiage performance over the previous four years. ; Under this scheme three. ( separate grant rates would; I be payable — a maximum’ rate of 15c in the dollar, an 'intermediate rate of 7.5 c and'

a minimum rate of 2.5 c. The submissions recommended that both the export market development grants scheme, and the new scheme ' should be current, for five ■ years front July J, 1977. The Cabinet also had be--1 lore it a third submission (which recommended the in- | troduction of a supplementary scheme for • the encourjauemeni of beef exports, j This was estimated to cost ;about SI4M a year. Several technical problems 'were associated with the .three export schemes. One major problem was said to be that the new incentive scheme did not make any allowances for changes in export prices and exchange rates. If the new I scheme was actually designed to award exporters | for real increases in exports, it would have to take into 'account these factors.