The Government released today the Industry Commission’s final report on State, Territory and Local Government Assistance to Industry.

The previous government asked the Commission to provide an information report, ie, one without recommendations. Given the nature and subject matter of the report, the Government will not be providing a formal response.

The Commission concludes that the gains from selective assistance at the State level are negligible with rivalry between jurisdictions at best shuffling jobs between regions and at worst reducing overall activity. It argues there is a strong case for the States to consider an agreement to cease or limit selective assistance to industry.

Referring to the IC’s analysis, the Mortimer Review noted the cost associated with the competitive use of industry assistance between States and argued that this approach can undercut Australia’s competitive position and its ability to win investment. The Review recommended greater Commonwealth/State coordination through formal agreements. In its Investing for Growth industry policy statement of 8 December 1997, the Government stated that it will negotiate clearer Commonwealth and State and Territory roles and responsibilities in investment promotion and facilitation.

To this end, the Government will develop an agreed set of guiding principles on the roles and responsibilities of Commonwealth and State and Territory governments in investment promotion, attraction and facilitation.

Copies of the IC report are available from Australian Government Publishing Service bookshops in capital cities.

CANBERRA

23 February 1998

For further information, contact Mr Alistair Davey, Treasurer’s Office – tel (02) 6277 7340.