What is a 'subsidy' in the context of goods being exported to Australia?

In Plain English

In the context of goods exported to Australia, a "subsidy" is when a government or public body from the exporting country provides financial assistance or support that gives an advantage to those goods. This can include direct money transfers, covering liabilities, not collecting revenue that is owed, providing goods or services outside of normal infrastructure, or buying goods or services. It also covers any form of income or price support. If this financial help gives a benefit to the goods being exported to Australia, it's considered a subsidy.

Detailed Explanation

The definition of "subsidy" in respect of goods exported to Australia is outlined in the Customs Act 1901. According to the Act, a subsidy exists when:

1. A Financial Contribution is made by:

   • A government of the exporting or originating country.
   • A public body of that country or a public body of which that government is a member.
   • A private body entrusted or directed by that government or public body to carry out a governmental function.

   This financial contribution must involve: * A direct transfer of funds. * The acceptance of liabilities. * The forgoing, or non-collection, of revenue (excluding allowable exemptions or remissions). * The provision of goods or services outside the course of providing normal infrastructure. * The purchase of goods or services.

2. Any form of income or price support as referred to in Article XVI of the General Agreement on Tariffs and Trade 1994 is received from such a government or body.

The Customs Act 1901 specifies that the financial contribution or income or price support must confer a benefit (directly or indirectly) in relation to the goods exported to Australia to be considered a subsidy.