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$17b in financial support for industry

THE Australian Government gave industry more than $17 billion in financial support in 2010-11, a review by the Productivity Commission has found.

Among the biggest benefactors of government help were the automotive, textiles, clothing and footwear sectors, while small businesses got about 40% of all financial assistance in 2010-11.

Commission chairman Gary Banks wrote, in the annual review, that while helping industry adjust to changing circumstances could result in community benefits, it was important that taxpayers' money was well directed.

"To this end, there would be merit in conducting a more detailed assessment of programs of different kinds, in order for any lessons to be incorporated into future program design and delivery," he wrote.

The review found about 15% of government support was for the rural sector, a fall of about $265 million from the previous year on the back of easing drought pressures.

The majority of regional industry support went to Victoria, with $1.2 billion to redevelop irrigation infrastructure in northern Victoria.

Across all regional areas, there was $845 million provided to improve rural water infrastructure.

Other regions that saw considerable government support in 2010-11 included a $30 million package to support the Illawarra in NSW after BlueScope Steel began reducing its Australian operations.

Small businesses affected by the natural disasters (floods and Cyclone Yasi) were also given about $3.3 million in support for business improvements and mentoring.

Total industry support was comprised of $8.7 billion in tariffs, $3.6 billion in direct budget measures and $5.4 billion in tax concessions.

Topics:  industry productivity commission