l i b r a r y

MEDIA  RELEASE PIE87/183

Sq-A

MINISTER FOR PRIMARY  INDUSTRIES AND ENERGY  and  MINISTER FOR RESOURCES

15 September 1987

$532 MILLION FOR P R I M  PRODUCTION SECTOR The 1987-88 Federal Budget demonstrates the Government's  commitment to non-metropolitan Australians and development of  their industries,  the Minister for Primary Industries and  Energy, Mr Kerin, and the Minister for Resources,  Mr Morris,

said tonight.

"In particular, the Government's economic strategy directed at  improving industry competitiveness and so laying the basis, for  a return to growth in living standards will be welcomed by all  those associated with the primary production sector," the  Ministers said.

Highlights of the Budget affecting the poftfolio are a new  National Afforestation Program costing $15 million in its first  three years, and outlays of up to $8 million to help retrenched  coalminers find new employment.

OtherÂ·measures include an allocation of $66 million to the  Federal Water Resources Assistance Program and $770 000 to  improve access for people living in rural and provincial areas  to information on Commonwealth Government programs and services.

Total Primary Industries and Energy portfolio outlays in  1987-88 are budgetted at $532 million, $39 million less than  expenditure in 1986-87.

This fall does not reflect major changes in the Government's  policy direction within the portfolio. It is due to an  expected reduction in the cost of rebating anti-dumping duties  on fertilisers and.the one-off effect in 1986-87 of the  transfer of the Wool Research Trust Account to the Australian  Wool Corporation.

The two former Departments of Primary Industry and Resources  and Energy and two Divisions of the former Department of Trade  were amalgamated to create the new Department of Primary  Industries and Energy.

The Ministers said $2.5 million would be allocated to the  National Afforestation Program in 1987-88, which was a  commitment in the Prime Minister's Rural Policy Speech during  the recent election campaign. .

"This new program will stimulate a sustained increase in the  level of investment by States, individual landholders and  industrial forestry companies in the development of hardwood  plantations and in the rehabilitation of degraded land through

afforestation.

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"This program will complement the objectives of the National  Soil Conservation Program, the National Tree Program, and the  National Rainforest Conservation Program. The Government has  allocated $6 million to the National Soil Conservation Program

for 1987-88, an increase of nine per cent over last year.

"The $8 million to coal industry labour adjustment assistance  through the Education, Employment and Training portfolio will  enable an expansion of schemes under the Labour Adjustment  Training Arrangements and the Relocation Assistance Scheme for

retrenched coalminers.

"With the coal industry undergoing restructuring caused by low  world prices and excess capacity, the Joint Coal Board has  estimated that up to 3,000 jobs could be lost in the industry  in 1987.

"The Government, believes it has an obligation to help miners  retrenched by the current restructuring to move into  alternative forms of employment.

"The establishment of the Commonwealth Services Information  Program follows a detailed examination of the information  communication needs of people living in rural and provincial  Australia, including the Rural Australia Symposium held in  Albury in July, and publication of The Rural Book.

"The methods which will be trialed include a 008 telephone  information service, a computer-based information service using  existing Government facilities,  and the establishment of  central Commonwealth 1  information desks' in rural towns.

"A number of other decisions taken by the Government reflect  the need for expenditure restraint to establish a climate for  further falls in interest rates and continued economic growth.

"These include a saving of $8.3 million through raising the  margin of freight costs for petroleum products paid by  consumers by 4 cents per litre and a decision to cap the level  of Commonwealth contribution to wool promotion at the same

level as in 1986-87.

"These decisions are a reflection of the necessity to restrain  expenditure in low priority areas in order to fund expansion in  higher priority programs.  The Review of Commonwealth  Assistance and Development Policy relating to the primary  production sector will consider the scope for further such

reallocations," the Ministers said.

Further information:  Lin Enright (062) 72 6661

X  AUSTRALIA ,,u ~ - ^ \ \ \ \ \ \ . .  /  '////jS-r v X x x ^

THE 1987-88 BUDGET

SUPPLEMENTARY INFORMATION

FROM THE

MINISTER FOR PRIMARY INDUSTRIES AND ENERGY

JOHN KERIN AND THE .

MINISTER FOR RESOURCES

PETER MORRIS

15 SEPTEMBER 1987

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SUPPLEMENTARY INFORMATION FOR THE 1987-88 BUDGET

TABLE OF CONTENTS

National Afforestation Program

Coal Initiative - Labour Adjustment Assistance

Federal Water Resources Assistance Program

National Residue Survey

Inspection Charges

National Soil Conservation Program

Increase in Petroleum Products Freight Subsidy  Margin

Fisheries Management and Development Programs

Commonwealth Services Information Program

Rural Industry Research Funding

Rural Adjustment Scheme

Commonwealth Funding of Wool Promotion

Support for Energy Research, Development and  Demonstration

Establishment of Sugar Industry Research Council

Fertiliser Assistance

Bureau of Mineral Resources

Clean-up Options for Atomic Test Sites

Primary Industries and Energy: Review of  .  Assistance and Development Policy

1 NATIONAL AFFORESTATION PROGRAM.

DECISION

The Government has decided to establish a National  Afforestation Program involving expenditure of $15 million over  its first three years of operation. The Program will, commence  in 1987-88 with an allocation of $2.5 million.

Its objective will be to stimulate a sustained increase in the  level of investment by States,  individual landholders and  industrial forestry companies in the development of hardwood.   plantations and in the rehabilitation of degraded land through  afforestation. ;  ,  .

BACKGROUND

The Government's commitment to establish a broadacre .  ' afforestation program with emphasis on native hardwoods was  announced.in the' Prime Minister's Rural Policy Speech during  the recent election campaign.

The Program will complement the objectives of the.National Soil  Conservation Program, the National Tree Program, and the  National Rainforest.Conservation Program which, although  effective individually, do not meet the need.for large-scale

afforestation. .  ^

Ã¢ÂÂ IMPACT .

Details of the National Afforestation Program .are being  resolved with the States and industry. It is expected to  include three components

.  broadacre plantations .

.  land rehabilitation .  Â·  :

.  research and development.

The Program will provide an incentive to industry to accelerate  development of a resource base to reduce pressure on native  forests, encourage industry expansion and provide a stimulus  for the establishment of major land rehabilitation schemes,  with particular emphasis being given to the Murray-Darling  Basin. .

2 COAL INITIATIVE - LABOUR ADJUSTMENT ASSISTANCE

DECISION

To provide up to $8 million to the Education, Employment and  Training portfolio for enlarged forms of assistance to  retrenched coal industry employees under the Labour Adjustment  Training Arrangements and the Relocation Assistance Scheme.

BACKGROUND .  ,  -

With the coal industry undergoing restructuring caused by low  world prices and excess capacity, the Joint Coal Board has  estimated that up to 3000 jobs could be lost in the industry in  1987 .

The Government has enhanced the Labour Adjustment Training  Arrangements and Relocation Assistance Scheme programs to  assist retrenched coal miners to take up alternate employment  and to move to areas in which job opportunities are available.

The Labour Adjustment Training Arrangements provides assistance  with training for

' .  retrenchees who do not relocate, who will be immediately eligible for up to 12 months "labour market related"  formal vocational training assistance with income support

.  those aged over 45 years who do not relocate, who will be immediately eligible for six months wage subsidy or up to  12 months combined formal vocational training/wage  subsidy assistance.

The Relocation Assistance Scheme provides assistance with  relocation for retrenchees who do relocate, who will be  eligible for assistance covering fares,  re-establishment  allowances, removal expanses and legal or agents fees on the  sale or purchase of a home.  They would also be eligible for  more generous rental allowance assistance, while those

relocating to take up training, will be eligible for additional  training assistance.

IMPACT

The Government believes that it is important for the welfare of  the families concerned and the future of the industry that  efforts be made to assist those experiencing difficulty as a  result of restructuring. ,

3 FEDERAL WATER RESOURCES ASSISTANCE PROGRAM DECISION

To allocate $66.0 million for Federal Water Resources  Assistance (FWRAP) in 1987-88, including $5.5m for the-Country  Towns Water Supply Improvement Program (COWSIP).  This compares  with expenditure of $68.6 million in 1986-87. .

BACKGROUND

FWRAP was introduced in 1984-85 to provide financial assistance  to the States and Northern Territory for water resources .   projects,  and for related activities of national significance  or special circumstances that warrant Commonwealth support.

The 1987-88 allocation includes $57.4 million for the States  and the Northern Territory for approved water resource '   development and management projects and activities, while most  of the remainder,is for water research activities and to meet  the Commonwealth's obligations to the River Murray Commission.

Major items include .$29.0 million for the Burdekin Falls Dam;  $8.5 million for management of the Murray-Darling Basin through  salinity and drainage works,  investigations and research, and  contributions to the River Murray Commission; $5.5 million for  the Country Towns Water Supply Improvement Program; $5.5  million for the Adelaide and Northern Towns Water Filtration

Program; $5.0 million for floodplain management; and $1.9  million for salinity control in'Western Australia.

IMPACT .

Funding will maintain the momentum on the integrated management  of the resources of the Murray-Darling Basin and the mitigation  of the deleterious effects of salinity and waterlogging on the  water and land resources of the Basin. .

Water supplies to small country towns will be further improved  through an increased for COWSIP from $4.0 million in 1986-87 to  $5.5 million this year.  Projects approved in the last two  years will benefit over 44,000 people in small towns and  villages across Australia. .

The commencement of the Harris River Dam will provide improved  water supplies to 31 towns in the south-west of Western  Australia which currently rely on water of deteriorating  quality as a result of dryland salinisation.

The $29 million allocation to Burdekin Dam this year will bring  total Commonwealth financial assistance to the project since  1982-83 to $121.8 million. The Dam is scheduled for completion  in 1988-89.

A table showing FWRAP allocations is attached.

F E D E R A L  W A T E R  R E S O U R C E S  A S S I S T A N C E  P R O G R A M

($ thousands)

ALLOCATION 1987-88

NEW SOUTH WALES .

Floodplain Management 2610

Murray Valley Salinity and Drainage 1730

Chichester Water Treatment Works 664

00WSIP 1645

Water Conservation Program 130

Total N S W  6779

VICTORIA Floodplain Management 1640

Murray Valley Salinity and Drainage 2600

OOWSIP 1204

State Water Plan 600

Total Victoria 6044

QUEENSLAND Bundaberg Irrigation Scheme 4000

Burdekin Dam 29000

OOWSIP 1144

Total Queensland '  34144

WESTERN AUSTRALIA Floodplain Management 404

Salinity Control 1900

OOWSIP 528

State Water Plan Ã¢ÂÂ   Â·  Ã¢ÂÂ   80

Total Western Australia .  2912

SOUTH AUSTRALIA Floodplain Management 248

Murray Valley Salinity and Drainage 570

Adelaide and Nthn Towns Water Treatment 5500

OOWSIP 534

Water Conservation Program 20

Total South Australia 6872

TASMANIA Floodplain Management 80

OOWSIP 319

Total Tasmania 399

NORTHERN TERRITORY Floodplain Management 56

OOWSIP 126

NT Water Plan .  33

Total Northern Territory 215

Total States, NT 57365

Murray-Darling Basin salinity 246

mitigation program River Murray Waters Agreement 1705

Water research programs 6184

Water resources assessment (BMR) 400

Water resources consultants 25

Review 85 75

TOTAL EXPENDITURE 66000

4 NATIONAL RESIDUE SURVEY'  "ÃÂ 'Vt 1 Â· Â· >  -  . ]  ~ DECISION .

To expand the coverage of the National Residue Survey and  establish a national data base to provide the quality assurance  required by consumers of Australian meat.

BACKGROUND .

Due to recent problems experienced in international meat  markets concerning residue levels,  it has been necessary to  upgrade the existing program of testing for chemical residues.

This will enable Australia to provide sufficient assurance to  importing countries that our level of residues are below their  permitted tolerances.

The upgraded survey will also provide a further measure of  assurance for meat entering the domestic market. .

IMPACT

Consumer confidence in both export and domestic markets for  meat and meat products will be enhanced. * -

The total cost of these measures is expected to be $4 million  in 1987-88 and $5 million in a full year. Under the  Government's cost recovery policy, these costs will be shared  equally between the Government and the industry.

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5 INSPECTION CHARGES

Export inspection charges across a wide range of commodities  are to fall in 1987-88. This is due to productivity  improvements in the Australian Quarantine and Inspection  Service (AQIS),  continuation of the Government's policy of  recouping 50 percent of inspection costs from the industry and  extension to all commodities, and revised inspection -arrangements for some commodities.

BACKGROUND -

For on-going functions, the costs of running the Inspection .   Service are expected to increase this year by only 2 percent.

The new charges involve a reduction of 4 percent in meat ,   inspection charges due to higher productivity resulting from  increased slaughterings

.  unit charges are now lower than in 1984 when the current  charging arrangements were introduced. This represents a  fall of approximately 30 percent in real terms

Revised inspection arrangements have reduced total costs by 90  percent for canned and frozen fruit and vegetables, 20 percent  for dried fruit, and 84 percent for wool.

There is to be no change in the level of charges for livestock  and fish, while registration charges for fish are being reduced  by 10 percent due to a combination of an increased number of  registrations and cost containment by AQIS.

The only significant increases in unit charges are

.  15 percent for dried fruit due to a lower crop resulting from seasonal factors

.  24 percent on the basic charge for dairy, due to changed inspection and charging arrangements associated with the  introduction of the Approved Quality Assurance Program,  which will benefit some firms, but in the short term  disadvantage others. This will encourage increased  participation in the Quality Assurance Program

.  the introduction of charges for fresh fruit and vegetables  from 1 January 1988. This is the last major inspection  activity for which charges are not currently applied and the  initiative follows a full review of inspection needs and  practices in this area.

IMPACT

The charges for the coming year will, in general, enhance the  competitive ability of most of our export industries with  inspection activity being kept to the minimum necessary to meet  importing country reguirements..

DECISION .  '

6 NATIONAL SOIL CONSERVATION PROGRAM DECISION

The Government has allocated $6 million to the National Soil  Conservation Program in 1987/88, an increase of 9 percent over  1986-87 expenditure.

$4.8 million will be provided*, for projects by State Government  soil conservation agencies and $1.2 million for projects by  other organisations that can contribute by way of research,  demonstration, community involvement or publicity. Â· Â· .

BACKGROUND .

The National Soil Conservation Program was established in1   1983-84 to stimulate national efforts to control land  degradation. The. 1987-88 allocation brings the total  expenditure under:the Program to date to $21.15 million.

Some 150 projects are being funded throughout Australia to  control one of the most important long-term problems for  agriculture and the environment. if

IMPACT

This year's allocation will maintain and expand the impetus for  soil conservation now becoming apparent around the country. The program has been strongly supported by landholders,  the  States and conservationists.

The funds are used to catalyse increased efforts by those with  more direct responsibility for land management and so multiply  the value of the Commonwealth's contribution.

7 INCREASE IN PETROLEUM PRODUCTS FREIGHT SUBSIDY MARGIN

DECISION

To increase the margin of freight costs for petroleum products  paid by consumers by 4 cents per litre to 10.2 cents per litre  with effect from 22 September 1987. This will result in  savings $8.3 million in 1987-88.

BACKGROUND .

Under the Petroleum Products Freight ..Subsidy Scheme the  Government fully subsidises the cost of freight for specified  petroleum products (petrol,  diesel, aviation gasoline and  aviation turbine fuel) where it exceeds a specified margin,  which presently is 6.2 cents per litre. This margin is

increased in July each year by the annual increase in the  consumer price index.

IMPACT

The increase in freight costs paid by consumers will save  Government revenue which can be directed to more pressing  needs. By continuing to subsidise freight costs above 10.2  cents per litre the scheme will still assist those consumers  who live in more isolated areas.  Freight costs exceed 30 cents  per litre in some of those locations.

Expenditure under the Scheme is expected to total $7.8 million  in 1987-88.

8 FISHERIES MANAGEMENT AND DEVELOPMENT PROGRAMS

DECISION

To allocate $30.1 million in 1987-88 for fisheries management  and development programs. After adjusting for one-off  expenditures and terminating programs, this is an increase of  $8.8 million over 1986-87 expenditure.

The $8.8 million increase comprises $3.5 million for new  fisheries management initiatives, $2.5 million for Torres  Strait capital items,  $1 million for the Northern Prawn Fishery  Adjustment Scheme,  and $1.8 million for fisheries research.

This will be partly financed by increasing the existing  recovery rate for managed fisheries from 44 percent to 60  percent and applying new levies on other fisheries. The level  of recovery in managed fisheries will be progressively

increased to 75 percent and 90 percent of recoverable costs  over the ensuing two years. Newly established fisheries will  be subject to full cost recovery. In addition, a new levy will  be introduced of $295 per annum on all holders of Commonwealth

fishing boat licences. .  -  n

BACKGROUND

Management regimes reduce competition for resources between  fishermen and increase profits while ensuring that stocks are  conserved and fishermen remain in the business in the longer  term.

In recent years, fishing access rights have become an extremely  valuable asset, while a buoyant world market for fish and  Australia's relatively favourable competitive situation is  leading to increasing pressure on fish stocks. Additional  management activity is needed to help secure access by  Australian fishermen to resources around Australia and to  prevent over exploitation.

IMPACT '  .

Additional funding will provide the means to develop and  implement a number of fisheries management programs designed to  ensure conservation of exploited species and to maximise  benefits to operators and the industry in general.

There will also be a comprehensive review of the corporate and  institutional arrangements associated with the development,   implementation and maintenance of the Commonwealth's fisheries  management programs. It is anticipated that the review will

result in a more positive role and greater level of  responsibility for the industry.

The increase in levies is an extension of the current "user  pays" policy and provides for a gradual increase in charges for  services.

9 COMMONWEALTH SERVICES INFORMATION PROGRAM

DECISION .

To establish a Commonwealth Services Information Program with  an initial allocation in 1987-88 of $0.77 million.

BACKGROUND .

This program will trial various --methods of improving access- by  people living in rural and provincial areas to information on  Commonwealth Government programs and services.

The establishment of the program implements a commitment  contained in the Economic and Rural Policy Statement of April  1986 and follows a detailed examination of the information  communication needs of rural and provincial Australia and the  publication of The Rural Book.  >

The methods which will be trialed include a 008 telephone  information service, a computer-based information service using  existing Government facilities, and the establishment of a  central Commonwealth "information desk" in selected rural towns

The trials will be held over several months to ascertain the  most efficient and effective delivery services.

IMPACT

The program will provide people living in rural and provincial  areas with improved access to information on Commonwealth  programs and services.

10 R U M  INDUSTRY RESEARCH FUNDING

To increase the allocation for Rural Industry Research Funds  from $42.1 million in 1986-87 to $48.9 million in 1987-88.

BACKGROUND

Commonwealth policy is to support matching funding  dollar-for-dollar with industry contributions up to 0.5 percent  of industry Gross Value of Production (1 percent for fisheries)

The increased allocation reflects increased research activity  and funding by industry.

IMPACT '

Total rural research expenditure in 1987-88 is expected to be  $96.7 million. ,

This will be split among 17 research funds and administered by  Research Councils that are constituted to maximise commercial  orientation, flexibility and relevance in selecting research  projects.

The commodities covered include wheat,  barley, chickenmeat,   cotton, dairy, dried fruits,  grain legumes, grape and wine,  honey, oilseeds, pigs, poultry, tobacco, meat,  wool and  fisheries.

The Australian Special Rural Research Fund allocation of $3  million in 1987-88 funds research on issues related to infant  industries, issues which transcend particular industries, and  issues which are deemed to be in the national interest.

DECISION .

1 1 RURAL ADJUSTMENT SCHEME

To allocate $42 million for the Rural Adjustment Scheme in -   1987/88, compared with expenditure of $34 million in 1986-87.

BACKGROUND

The Rural Adjustment Scheme (RAS) provides assistance under  Part A for debt reconstruction, farm build up and farm  improvement.  Commonwealth funds are used by State  administering authorities to provide assistance by way of -

interest rate subsidy on borrowed funds. Household support and  rehabilitation assistance for non-viable farmers are also  available under Part C of the Scheme.

The Scheme is particularly important at a time when some .   agricultural industries are facing severe adjustment  pressures. The most recent outlook by the Bureau of  Agricultural Economics for 1987-88 suggests an improvement in

the rural sector as a result of rising prices,  decelerating  cost inflation, a steady decline in interest rates, and  relatively good seasonal conditions.

Nevertheless, it is recognised that a number of producers  continue to face difficult economic circumstances.

The Government places high priority on the Scheme as an  effective way of targetting assistance to those most in need.   The Government recognises that rural adjustment is a long-term  matter, and this is reflected in the fact that new funding in

any one year carries forward at least at that level of funding  for a further six years.

IMPACT

$27 million will meet commitments arising from new lending in  1985-86 and 1986-87.

$6.7 million will be available for new loans under Part A of  the Scheme. At a maximum 50 percent subsidy at 1986-87  interest rates, the 1987-88 Part A allocation should subsidise  around $77 million of new loans. This would be additional to  the $304.9 million of loans arising from the two previous  years' Commonwealth contribution.

Total subsidised loans of around $382 million represent a  record 5 percent of the estimated level of rural debt.

$5 million has been estimated for Part C purposes in 1987-88.

DECISION

12 COMMONWEALTH FUNDING OF WOOL PROMOTION .

DECISION

The Government is to contribute $35.4m for wool promotion in  1987-88, the same as in 1986-87.

BACKGROUND .

In 1984 the Government decided to fund wool promotion at a  level of 1.2 percent of the gross value of wool production with  a review of these arrangements to be undertaken in 1987-88. 3.5 percentage points of the 8 percent wool tax are currently  allocated to promotion.  These funds are used to promote  end-use consumption of wool through the International Wool .   Secretariat.

There has been a rapid escalation in Government wool promotion  funding under the formula adopted in 1984. Since the scheme  was introduced the Government contribution has increased from  $20 million to over $35 million, an increase of 75 percent. In

recent years fluctuating wool prices and production levels have  resulted in uncertainty for both woolgrowers and Government  about the level of funding at any time. Thereais a need for  Government promotion funding to be placed on a stable and  predictable basis.

In line with the 1984 decision, the Government will shortly  conduct a detailed examination of how wool promotion might best  be funded. This examination will be conducted by a high level  Committee chaired by a leading commercial businessperson.  Other members will include a person with international trading  or commodity marketing experience and a leading wool industry

figure. The Terms of Reference and the composition of the  Committee, due to report in early 1988, will be announced  shortly.

IMPACT

The Government recognises the importance of wool promotion to  woolgrowers and the need to maintain a high level of promotion  effort.

At the same time, the setting of the maximum Government  contribution at a level equivalent to that of 1986-87  acknowledges the need for budgetary restraint while maintaining  a high level of funding. It means that both the wool industry  and the Government can now proceed on a firm financial basis  for 1987-88.

This decision will have no adverse effect on the capacity of  the wool industry to fund wool promotion in 1987-88. High wool  prices and production in the past year has meant that the  Australian Wool Corporation is better able to fund wool  promotion.

13 SUPPORT FOR ENERGY RESEARCH, DEVELOPMENT AND   DEMONSTRATION .

DECISION

To commit $8.5 million in 1987-88 on new energy research  projects under the National Energy Research, Development and  Demonstration Program. Expenditure in 1987-88 on both new and  existing projects supported by Government funds is estimated at

$11.66 million. -

BACKGROUND

In addition to Government funded projects, coal research is  supported from the Coal Research Trust Account which applies a  5c/tonne levy on black coal production by private sector coal  companies, supplemented by contributions from the States for  State Government operated mines.

Since the inception of the Program in 1978 nearly $175 million  has been committed in grants, of which $116 million has been  provided by the Government and the remainder from the Coal  Research Trust* Account.  "

IMPACT - .

These further funds for the Program will enable new energy  research, development and demonstration projects to be  initiated.

This is particularly important because

.  declining coal prices and employment mean that coal industry needs to introduce new technology and techniques  to improve competitiveness

.  Australia's oil self-sufficiency is forecast to decline  markedly and research and development into alternative  fuelds needs to continue to be encouraged.

14 ESTABLISHMENT OF SUGAR INDUSTRY RESEARCH COUNCIL

DECISION

The Commonwealth has established a Sugar Industry Research  Council and will provide funds of $52,000 from the 1987-88  Budget for the first year of operation of the Council.

BACKGROUND

The Research Council is established under the Rural Industries  Research Act 1985 to monitor and evaluate the research -   requirements of the sugar industry and determine the allocation

of funds to research projects beneficial to the industry.

The Council will administer the Sugar Industry Research Fund, '  established by legislation in June this year. In subsequent  years the Commonwealth will also provide matching funds for the  research to be undertaken.

The Sugar Cane Levy Act 1987 and the Sugar Cane Levy Collection  Act 1987 provide for the imposition and collection of a levy on  sugar cane harvested and delivered for crushing in Australia.  Initially, the levy has been set at 5^/tonne, and is expected  to raise over $1 million annually for research. .

As with other Rural Industry Research Funds, matching  Commonwealth funds will be made available up to a maximum of  0.5 percent of the gross value of production of the industry.

IMPACT '

It is recognised that the sugar industry is going through a  difficult period.  Money from the Fund will be used to finance  research in critical areas to assist the industry in  maintaining and improving its efficiency and international

competitiveness.

15 FERTILISER ASSISTANCE

DECISION .

To provide $68.5 million to maintain consumption subsidies on  fertilisers and to continue to offset the effects on users of  anti-dumping duties.  Expenditure in 1986-87 totalled $92.1  million.

BACKGROUND -

Throughout its term of office, the Government has maintained  the. level of subsidies for fertiliser consumption. In- early  1986 a system of rebating anti-dumping duties and the provision  of anti-dumping assistance for fertilisers through direct  grants was introduced.

IMPACT

These arrangements will continue to result in farmers having  access to fertilisers at prices equivalent to world prices less  the value of the consumption subsidy. '

The reduced cost of the arrangements reflects lower dumping  duties and hence lesser amounts needed to compensate importers  and manufacturers.

16 BUREAU OF MINERAL RESOURCES

A total of $39.9m is provided in 1987-88 for the Bureau of  Mineral Resources,  Geology and Geophysics (BMR).  This compares  with a provision of $36.9 million in 1986/87. .  .

IMPACT ~

This will enable the BMR to maintain its level of effort in  major strategic geoscience research programsresource  assessment and database activities. -  ’

The more noteworthy program activies include

.  the Continental Margins Program of marine' geological and  geophysical research which is designed to provide the.basis  fpr future petroleum exploration of Australia's offshore  sedimentary basins. 1987-88 is the third full year of the  program. BMR's research vessel,  Rig Seismic, will collect  new geological and geophysical data from surveys off  northeastern Queensland, western Tasmania, Western . Australia and in the Gippsland and Bass Basins

.  $0.15 million to assist in the program of research and resource assessment to take place within the Conservation  Zone associated with Stage 3 of the Kakadu National Park. The BMR program will extend over five years and will  comprise three major elements - ore deposit research,

regional geoscience research and mineral resource assessment

.  a major study of the petroleum and mineral potential of the  onshore Canning Basin in northwestern Western Australia is  to be undertaken as a basis for the development of more  effective exploration strategies

.  the reconnaissance aeromagnetic coverage of the Australian  continent; data will be collected from the western part of  the Northern Territory and parts of northern Western  Australia in 1987-88

.  continued development of a capacity to monitor seismic  disturbances and nuclear explosions.

DECISION

17 CLEAN-UP OPTIONS FOR ATOMIC TEST SITES DECISION _

The Budget provides $0.35 million to fund the second year of .   scientific studies being undertaken to establish the nature,  extent and potential Hazards of contamination at the former  test sites. An amount of $2 million was provided in 1986-87.

BACKGROUND

In August 1986 the Government agreed to proceed with a program  of scientific studies at the former test sites at Maralinga-and  Emu. The purpose of the studies is to assist in identifying  practical and cost effective clean-up options for consideration  by the Government.

The UK Government has agreed to contribute to the study program  on a broadly similar level to Australia. -  This contribution is  being made by the UK' without prejudice to the question of  liability for clean-up costs.

- t -  .

Im p a c t  -  Ã¢ÂÂ

The 1987-88 allocaÃ¢ÂÂ¬ion will enable the scientific study program  to continue on schedule.

18 PRIMARY INDUSTRIES AND ENERGY: REVIEW OF ASSISTANCE   AND DEVELOPMENT POLICY .

DECISION

To undertake the recently announced comprehensive Review of  Commonwealth assistance and development policy relating to the  resources,  energy, agricultural,  fisheries and forestry  industries. -

BACKGROUND -

The review will reassess policies,  the direction and nature of  assistance measures, the degree of regulation and disparities  in the treatment of different industries - having in mind the  need to reduce Government expenditure wherever possible without  damage to overall policy goals.

IMPACT ' '

The Government intends to enhance Australia's growth prospects  by improving competitiveness and encouraging flexibility and  structural adjustment.  As an integral -part -of this approach  the review will involve an assessment of the pattern of

assistance to primary industries and energy'to ensure that it  is consistent with longer-term policies and is provided in a  focussed and efficient manner.

The Review will encompass all forms of assistance including  subsidies, bounties and grants, tax expenditures (tax  exemptions and concessions), price support payments (for  example, through guaranteed minimum price arrangements) and  provision of services (export inspection, quarantine facilities

etc).

