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2003-04
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
TEXTILE, CLOTHING AND FOOTWEAR STRATEGIC
INVESTMENT PROGRAM AMENDMENT BILL 2004
EXPLANATORY MEMORANDUM
(Circulated by the
Authority of
the Minister for Industry, Tourism and
Resources
the Honourable Ian Macfarlane, Member of Parliament)
TEXTILE, CLOTHING AND FOOTWEAR STRATEGIC INVESTMENT PROGRAM AMENDMENT BILL 2004
GENERAL OUTLINE
The Bill establishes an alternative cap for certain grants in respect of TCF
value-adding for the 2003–04 and 2004–05 income years. The
alternative cap enables leather and technical textile entities to match the
total value of their grants for plant and equipment (new and used), and research
and development with a grant for value-adding for the final two income years of
the Program.
This initiative is part of the Australian Government’s
future assistance arrangements for the TCF Industry announced on 27 November
2003. This long-term assistance package of $747 million, which will include a
five year pause on tariff reductions from 2005, will help TCF firms and workers
adjust to a lower tariff environment. The package includes:
• $600
million for extending the TCF Strategic Investment Program comprising: a $487.5
million extension to 2010 for all TCF sectors; $87.5 million extension from 2011
to 2015 for the clothing and finished textile sectors; and $25 million for a ten
year grants-based program for small business;
• $50 million for a ten
year structural adjustment program to assist displaced workers;
• $50
million for an import credit scheme;
• $20 million for a supply chain
efficiency program from 2010 to 2015; and
• $27 million for an extension of the Expanded Overseas Assembly Provisions scheme.
The $600 million Textile, Clothing and Footwear Post 2005 Strategic Investment Program Scheme (TCF Post 2005 (SIP) Scheme) will provide two types of grants supporting investment and innovation, and support for small TCF businesses. Leather and technical textiles will only have access to grants for investment under the Post 2005 Scheme. This is a reflection of the Government’s decision to concentrate support towards those firms facing the greatest tariff adjustment pressure.
Leather and technical textile firms are not facing the same extent of restructuring pressures as other sectors of the TCF Industry, nor are they, for many of their products, facing the prospect of significant tariff reductions. This initiative will, however, assist leather and technical textile businesses in making the transition to the TCF Post 2005 (SIP) Scheme.
The leather and technical textile sectors will still be able to access the Government’s industry wide innovation and research and development programs beyond 2005.
FINANCIAL IMPACT STATEMENT
The total amount of funding available for the Textile, Clothing and
Footwear Strategic Investment Program Act 1999 will remain unchanged.
The
alternative cap for leather and technical textiles will be set at $3.9 million
over and above what would have been paid had the alternative cap not applied in
the final two years of the Program.
TEXTILE, CLOTHING AND FOOTWEAR
STRATEGIC INVESTMENT PROGRAM AMENDMENT BILL 2004
NOTES ON
CLAUSES
Part 1 — Introduction
Clause 1 — Short
Title
1. This clause provides the short title of the Bill.
Clause
2 — Commencement
2. This clause provides that the Act commences on
the date of Royal Assent.
Clause 3 — Schedule(s)
3. This
clause provides that an Act specified in a Schedule is amended or repealed as
set out in the Schedule and that other items in a Schedule have effect according
to its terms.
Clause 4 — Application
4. This clause provides
that the amendments made by Schedule 1 to this Act apply in respect of grants
made both before and after the commencement of this Act. A small number of
existing registrants under the Textile, Clothing and Footwear Strategic
Investment Program Scheme (TCF (SIP) Scheme) are able to avail themselves to
grants under the Scheme from 1 January 2004. This clause will enable those
registrants under the TCF (SIP) Scheme who are in a position to claim and be
paid a grant prior to the commencement of this Act to benefit from the
provisions of Schedule 1.
Schedule 1 — Amendments
Item 1
— After paragraph 10(d)
5. New paragraph 10(da) is consequential on
new section 14A
Item 2 — After section 14
6. New section 14A
sets out the policy objectives for an alternative cap for certain grants in
respect of TCF value-adding under the TCF (SIP) Scheme. Total grants for TCF
value-adding made to leather or technical textile entities regarding activities
undertaken by the entity in the 2003–04 or 2004–05 income year are
equivalent to the sum of the total grants for new and second-hand plant and
building expenditure and TCF research and development expenditure. The total of
value-adding grants paid to leather or technical textile entities will not
exceed $3.9 million over and above what would have been paid had the alternative
cap not applied in the final two years of the Program.