{"id":"C1939A00045","name":"Ship Bounty Act 1939","slug":"ship-bounty-act-1939","collection":"act","jurisdiction":"commonwealth","status":"repealed","isInForce":false,"actNumber":"45 of 1939","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":4116,"registerId":"commonwealth-C1939A00045-current","compilationNumber":null,"startDate":"2026-03-30","status":"Repealed","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Ship Bounty Act 1939","content":"SHIP BOUNTY.\n\nNo. 45 of 1939.\n\nAn Act to provide for the Payment of a Bounty on the Construction of Ships and Parts of Ships.\n\n\\[Assented to 8th December, 1939.\\]\n\nPreamble.\n\nBE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, for the purpose of appropriating the grant originated in the House of Representatives, as follows:—\n\nShort title.\n\n1. This Act may be cited as the Ship Bounty Act 1939.\n\n \n\nCommencement.\n\n2. This Act shall come into operation on a date to be fixed by Proclamation.\n\nDefinitions.\n\n3.—(1.) In this Act, unless the contrary intention appears—\n\n“authorized person” means any person authorized in writing by the Minister in respect of the matter in relation to which the expression is used;\n\n“Collector” means the Collector of Customs for a State;\n\n“Comptroller-General” means the Comptroller-General of Customs;\n\n“duty of Customs” means the duty of Customs chargeable in pursuance of any Customs Tariff or of any Customs Tariff proposal introduced into the House of Representatives;\n\n“gross tonnage” means the gross tonnage ascertained by measurement in the manner prescribed by the Merchant Shipping Act;\n\n“part of a ship” means a ship the keel of which is laid after the commencement of this Act but the construction of which is not completed at the expiration of the period of the bounty, and “parts of ships” has a corresponding meaning;\n\n“ship” means a vessel used in navigation—\n\n(a) which is propelled only by means of power contained in the ship;\n\n(b) which is constructed of iron or steel;\n\n(c) which is a passenger ship, cargo ship, collier, ferry, tug, trawler, hopper barge or tanker, or a vessel for use by any governmental or public utility or service; and\n\n(d) the keel of which is laid after the date of the commencement of this Act,\n\nbut does not include any such vessel which is a vessel of the naval forces of any part of the King’s dominions;\n\n“the Merchant Shipping Act” means the Imperial Act known as the Merchant Shipping Act, 1894, and includes any Imperial Act amending it or substituted for it;\n\n“the period of bounty” means the period of bounty specified in the Schedule;\n\n“yard” means any premises appointed by the Minister as a shipbuilding yard for the purposes of this Act.\n\n(2.) In this Act any reference to the Schedule shall be read as a reference to the Schedule to this Act.\n\nAppropriation.\n\n4. There shall be payable out of the Consolidated Revenue Fund, which is hereby appropriated accordingly, the bounty specified in this Act.\n\nLimit of annual bounty.\n\n5.—(1.) The total amount of bounty paid under this Act in respect of ships or parts of ships constructed during any one financial year\n\n \n\nshall not exceed the sum of Fifty thousand pounds, nor, during that part of the financial year preceding the first complete financial year of the period of the bounty or succeeding the last complete financial year of that period, exceed a sum which bears the same proportion to Fifty thousand pounds as that part of a complete financial year bears to a complete financial year:\n\nProvided that, when the maximum amount of bounty which may be paid in respect of any financial year or part thereof has not been paid in that year or part, the unpaid balance, or any portion thereof, may be paid in any subsequent financial year or part thereof in addition to the maximum amount in respect of that subsequent financial year or part.\n\n(2.) Where the total amount available in pursuance of this section for the payment of bounty in respect of any financial year or part thereof is insufficient for the payment in full of all valid claims for bounty in respect of that financial year or part thereof, the bounty otherwise payable under this Act in respect of each of those claims shall be reduced to an amount which bears the same proportion to the amount of the claim as the total amount of bounty available in respect of that financial year or part thereof bears to the total amount of valid claims in respect of that financial year or part.\n\n(3.) If the Minister is of the opinion that the total amount of bounty available in pursuance of this section for the payment of bounty in respect of any financial year or part thereof will be insufficient for the payment in full of all valid claims in respect of that financial year or part, he may withhold payment of the whole or any part of all bounties otherwise payable under this Act in respect of that financial year or part until he has ascertained the total amount of valid claims in respect of that financial year or part.\n\nTo whom bounty payable.\n\n6. The bounty shall, subject to this Act, be payable to the builder of the ships or parts of ships.\n\nSpecification of bounty.\n\n7. Subject to this Act, the bounty under this Act shall be payable on ships and parts of ships wholly constructed in accordance with the prescribed conditions, in a yard, during the period of bounty.\n\nRate of bounty.\n\n8.—(1.) The rate of bounty payable under this Act in respect of the construction of a ship shall, subject to this Act, be such one of the rates specified in the Schedule as is appropriate to the ship.\n\n(2.) The bounty payable in respect of the construction of a part of a ship shall be such proportion of the bounty which, in the opinion of the Minister, would have been payable if the construction of the ship had been completed during the period of the bounty, as the value of the part of the ship bears, in the opinion of the Minister, to the value which the ship would have on completion.\n\n(3.) If the rate of duty of Customs upon any ship of a description specified in the Schedule is increased above the rate applicable to\n\n \n\nthat description of ship on the date of commencement of the period of bounty, the Minister shall forthwith cause to be made such reduction in the rate of bounty payable—\n\n(a) in the case of a ship or part of a ship the construction of which is commenced after the date of the increase in the rate of duty of Customs—as is equivalent to that increase; or\n\n(b) in the case of a ship or part of a ship the construction of which is commenced before the date of the increase in the rate of duty of Customs in pursuance of a contract which provides, in the event of an increase in the rate of duty, for an increase of the price payable to the builder—as is equivalent to the amount by which the price payable to the builder is increased.\n\n(4.) Where, after the rate of bounty has been reduced in pursuance of sub-section (3.) of this section, any reduction or increase occurs in the rate of duty of Customs in respect of any ship of a description specified in the Schedule, the Minister shall forthwith cause to be made—\n\n(a) in the case of a ship or part of a ship the construction of which is commenced after the date of the reduction or increase in that rate of duty—such increase or reduction, as the case may be, in the rate of bounty theretofore payable as is equivalent to that reduction or increase in the rate of duty; or\n\n(b) in the case of a ship or part of a ship the construction of which is commenced before the date of the reduction or increase in that rate of duty in pursuance of a contract which provides, in the event of a reduction or increase in the rate of duty, for a reduction or increase, as the case may be, of the price payable to the builder—such increase or reduction, as the case may be, in the rate of bounty theretofore payable as is equivalent to the amount by which the price payable to the builder is reduced or increased.\n\nProvided that nothing in this sub-section shall authorize any increase in the rate of bounty so as to exceed the appropriate rate specified in the Schedule.\n\nPayment of bounty by instalments.\n\n9.—(1.) The Minister may in his discretion, on application in writing by the builder of a ship, approve of the payment of the bounty by instalments.\n\n(2.) When the Minister approves of the payment of bounty by instalments the instalments shall be payable after the expiration of each quarter (or portion of a quarter) of the period of the bounty ending on the last day of the months of March, June, September and December, and each instalment shall not exceed an amount equal to such proportion of the bounty which would, in the opinion of the\n\n \n\nMinister, be payable on the completion of the construction of the ship during the period of the bounty, as the value, in the opinion of the Minister, of the portion of the ship constructed during the preceding quarter (or portion of a quarter) bears to the value which, in the opinion of the Minister, the ship would have on completion.\n\nReduction of bounty where profit exceeds ten per centum per annum.\n\n10.—(1.) Where the net profit of a builder from the construction and sale of ships and parts of ships during any financial year or part thereof exceeds the rate of ten per centum per annum on the capital actually used by the builder in that construction and sale, the Minister may withhold from the builder payment of bounty in respect of the construction of ships and parts of ships during that financial year or part thereof, and may recover any bounty which has been paid in respect thereof.\n\n(2.) Where the payment of any bounty has resulted or would result in the net profit of a builder, after taking the bounty into account, from the construction and sale of ships and parts of ships during any financial year or part thereof exceeding the rate of ten per centum per annum on the capital actually used by the builder in that construction and sale, the Minister may—\n\n(a) require the builder to refund the portion of the bounty paid to him which has resulted in the net profit, after taking the bounty into account, having exceeded the rate of ten per centum per annum on that capital, and that portion shall thereupon be recoverable; or\n\n(b) withhold from the builder payment of such further bounty as would result in the net profit, after taking the bounty into account, exceeding the rate of ten per centum per annum on that capital.\n\n(3.) Notwithstanding anything contained in this section, where the Minister finds that a builder has, after taking into account the bounty which would, but for this section, have been payable to him, made a net profit which has exceeded the rate of ten per centum per annum on the capital actually used in the construction and sale of ships and parts of ships, the Minister may, in taking action under this section, make such allowance as he, in his absolute discretion, thinks fit in respect of any net profit of less than ten per centum per annum, or any loss, which the builder may have made during any previous financial year or part thereof (after taking into account the bounty paid to him in respect of that financial year or part thereof) during which this Act is in operation.\n\n(4.) For the purposes of this section, the Minister may—\n\n(a) determine what amount of capital is from time to time actually used, and what amount of net profit is derived thereon, by any builder in the construction and sale of ships or parts of ships; and\n\n \n\n(b) determine, and include with the amount of capital actually used and net profit thereon derived by the builder, any amount of capital actually used and the net profit thereon derived by any other person (whether subsidiary to or affiliated with the builder or not) in the distribution or sale of ships to users thereof.\n\n(5.) In the determination under sub-section (4.) of this section of the amount of net profit derived by a builder from the construction and sale of ships and parts of ships, income tax assessed under any Act or State Act shall not be deducted from the profit so derived by that builder.\n\nRates of wage and conditions of employment.\n\n11.—(1.) Where, in the locality where ships or parts of ships in respect of the construction of which bounty is claimed are constructed, any standard rates of wages or conditions of employment to be paid or observed in respect of any persons employed in the construction of those ships or parts of ships have been—\n\n(a) prescribed by any award, order or determination of the Commonwealth Court of Conciliation and Arbitration or of any other industrial authority of the Commonwealth or of a State or Territory or in any industrial agreement registered under any law of the Commonwealth or of a State or Territory; or\n\n(b) declared to be fair and reasonable in accordance with the provisions of sub-section (2.) of this section,\n\na builder when making any claim for bounty in respect of the construction of any ships or parts of ships shall certify to the Collector that the rates of wages and the conditions of employment observed by him in respect of the persons employed in the construction of ships and parts of ships were not less favorable to the persons so employed than the rates and conditions so prescribed or declared.\n\n(2.) If, in the locality where ships or parts of ships in respect of the construction of which bounty is claimed are constructed, the rates of wages and conditions of employment to be paid and observed in respect of any persons employed in the construction of those ships or parts of ships have not been prescribed by any award, order or determination of the Commonwealth Court of Conciliation and Arbitration or of any other industrial authority of the Commonwealth or of a State or Territory or in any industrial agreement registered under any law of the Commonwealth or of a State or Territory, the Minister may make application to the Chief Judge or a Judge of the Commonwealth Court of Conciliation and Arbitration for a declaration as to what rates of wages and conditions of employment are fair and reasonable for persons employed in the construction of ships and parts of ships in that locality.\n\n(3.) If the Minister finds that the rates of wages paid to, or the conditions of employment, or any of them, observed in respect of, persons employed in the construction of ships and parts of ships upon which bounty is claimed were less favorable to those persons than the\n\n \n\nrates and conditions prescribed or declared as specified in paragraph (a) or paragraph (b), as the case may be, of sub-section (1.) of this section, he may direct that the whole or any part of any bounty shall not be payable and that whole or part, as the case may be, shall thereupon not be payable.\n\nWorkmanship to be satisfactory.\n\n12. Bounty shall not be paid on the construction of a ship or part of a ship unless, in the opinion of the Comptroller-General, the workmanship of all parts of the ship, or the part of a ship, as the case may be, and its equipment is in all respects satisfactory.\n\nYards to be appointed by Minister.\n\n13.—(1.) Where, in the opinion of the Minister, ships or parts of ships are, or are proposed to be, built at premises under such conditions as are from time to time prescribed, he shall appoint those premises as a yard for the purposes of this Act.\n\n(2.) The Minister may require any person applying for the appointment of his premises as a yard under this section to furnish information as to the nature of the business or proposed business and such other matters as the Minister thinks fit.\n\nSeparate accounts, &c.\n\n14.—(1.) A builder shall keep, to the satisfaction of the Minister, separate accounts, books and documents showing, from time to time, in relation to ships and parts of ships subject to bounty, the capital actually used in, and the costs of, the construction and sale of the ships and parts of ships, the selling prices and revenue from sales thereof, and the profits derived from the construction and sale.\n\n(2.) A builder shall, in respect of each half-year ending on the thirty-first day of December and each financial year ending on the thirtieth day of June respectively, furnish to the Comptroller-General a balance-sheet, profit and loss account, manufacturing account and trading account, and such other information in relation to the construction and sale of ships and parts of ships subject to bounty as the Minister requires.\n\n(3.) The accounts and information so furnished, together with the value at cost and details thereof of the ships or parts of ships recorded therein as having been lying or standing at or in the yard of the builder at the end of each such period, shall be certified by the builder and his auditor to be true and correct in every particular.\n\nStocktaking and inspection of construction and accounts.\n\n15.—(1.) Any authorized person may, at all reasonable times, go on board any ship or part of a ship on which bounty has been paid or claimed or enter any yard where ships or parts of ships on which bounty has been paid or claimed are being or have been constructed, and may—\n\n(a) inspect any such ship or part of a ship;\n\n(b) inspect the process of construction of any such ship or part of a ship; and\n\n(c) inspect the accounts, books and documents relating to the construction and sale of any such ship or part of a ship.\n\n \n\n(2.) The builder of any such ship or part of a ship, and the owner or occupier of any such yard, shall provide the authorized person with all reasonable facilities and assistance to enable him to give effect to any or all of the matters specified in sub-section (1.) of this section.\n\nPenalty (for any contravention of this sub-section): Fifty pounds.\n\nPower to require persons to answer questions and produce documents.\n\n16.—(1.) The Comptroller-General, a Collector or any authorized person may, by notice in writing, require any person whom he believes to be capable of giving any information in relation to the construction or sale of ships or parts of ships on which bounty has been paid or claimed to attend before him at the time and place named in the notice, and then and there to answer questions and to produce to him such accounts, books and documents in relation to the construction or sale as the Comptroller-General, Collector or authorized person thinks necessary.\n\n(2.) The Comptroller-General, the Collector or any authorized person to whom any accounts, books or documents are produced in pursuance of this section may make and take away copies of or extracts from those accounts, books or documents.\n\n(3.) No person shall be excused from answering any question or producing any accounts, books or documents when required so to do under this section on the ground that the answer to the question or the production of the accounts, books or documents might tend to criminate him or make him liable to a penalty; but his answer shall not be admissible in evidence against him in any civil or criminal proceeding other than a proceeding for an offence against this Act.\n\n(4.) Where a builder has failed to attend or to answer any question or to produce any accounts, books or documents, when required so to do under this section, the Minister may, if he thinks fit, withhold payment of any bounty payable to the builder until he has attended, answered the question or furnished the required accounts, books, or documents, as the case may be.\n\nPower to examine upon oath.\n\n17. The Comptroller-General, a Collector or any authorized person may administer an oath to any person required to attend before him in pursuance of section sixteen of this Act and may examine such person upon oath.\n\nAffirmation in lieu of oath.\n\n18.—(1.) Where any person required to attend before the Comptroller-General, a Collector or an authorized person in pursuance of section sixteen of this Act conscientiously objects to take an oath, he may make an affirmation that he conscientiously objects to take an oath, and that he will state the truth, the whole truth, and nothing but the truth, to all questions that may be asked him.\n\n(2.) An affirmation so made shall be of the same force and effect, and shall entail the same penalties, as an oath.\n\n \n\nPenalty for refusing to answer question, &c.\n\n19. Any person who refuses or fails—\n\n(a) to attend before the Comptroller-General, a Collector or an authorized person;\n\n(b) to be sworn or to make an affirmation; or\n\n(c) to answer questions or produce accounts, books or documents,\n\nwhen so required in pursuance of this Act, shall be guilty of an offence.\n\nPenalty: Fifty pounds.\n\nSecurity for compliance with Act.\n\n20. The Minister may require any builder to give security by bond, guarantee or cash deposit, or by all or any of these methods, for due compliance by him with the provisions of this Act and the regulations or for the performance of any undertaking given by him in pursuance of this Act or the regulations.\n\nBounty not payable unless Act complied with.\n\n21. No bounty shall be authorized to be paid on any ship or part of a ship unless the builder furnishes proof to the satisfaction of the Minister that the requirements of this Act and the regulations have been substantially complied with.\n\nOffences.\n\n22.—(1.) Any person who—\n\n(a) obtains any bounty which is not payable;\n\n(b) obtains payment of any bounty by means of any false or misleading statement; or\n\n(c) presents to any officer or other person doing duty in relation to this Act or the regulations any account, book or document, or makes to any such officer or person any statement, which is false in any particular,\n\nshall be guilty of an offence.\n\nPenalty: Five hundred pounds or imprisonment for twelve months.\n\n(2.) Where a person is convicted, under sub-section (1.) of this section, the Court may, in addition to imposing a penalty under that sub-section, order the person to refund to the Minister the amount of any bounty wrongfully obtained.\n\nReturn for Parliament.\n\n23.—(1.) A return shall be prepared, not later than the thirty-first day of August of each year, and shall be laid before each House of the Parliament within fifteen sitting days of that House after the preparation of the return.\n\n(2.) The return shall set forth in respect of the preceding financial year—\n\n(a) the name and address of each builder to whom bounty was paid;\n\n(b) the total amount of bounty paid to each builder on each ship or part of a ship together with particulars as to the gross tonnage or estimated gross tonnage of the ship and the extent to which construction has progressed in respect of each ship on which bounty was paid; and\n\n(c) such other particulars as are prescribed.\n\n \n\nRegulations.\n\n24. The Governor-General may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed, for carrying out or giving effect to this Act, and in particular for prescribing—\n\n(a) the form in which applications for bounty shall be made;\n\n(b) the conditions to be observed by builders in respect of giving notice of their intention to claim bounty and the time or times within which applications for bounty shall be lodged with the Collector;\n\n(c) the conditions of construction of ships or parts of ships at yards; and\n\n(d) penalties not exceeding Fifty pounds for any breach of the regulations.\n\nTHE SCHEDULE.\n\n```html\n

Description of Ships.

Rate of Bounty.

Period of Bounty.

Per gross ton.

Ships the gross tonnage of which—

£

s.

d.

Three years from the date on which this Act comes into operation.

(a) exceeds 100 but does not exceed 750.........

12

10

\"\"0

(b) exceeds 750 but does not exceed 900.........

12

0

0

(c) exceeds 900 but does not exceed 1,050........

11

10

0

(d) exceeds 1,050 but does not exceed 1,200.......

11

0

0

(e) exceeds 1,200 but does not exceed 1,350.......

10

10

0

(f) exceeds 1,350 but does not exceed 1,500.......

10

0

0

\n```","sortOrder":0}],"analysis":{"summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"This Act is a tightly scoped, single-purpose piece of legislation. Its original intent — to pay a time-limited production bounty to Australian shipbuilders — is precisely reflected throughout every provision. All supporting machinery (inspections, financial records, wage conditions, profit caps, instalment payments) serves that central purpose. There is no evidence of scope creep: the Act covers only the specific vessel types listed, only approved yards, and only a fixed three-year window. It does not appear to have been broadened beyond its original design."},"complexity_factors":["Multiple interacting defined terms — 9 definitions in section 3, including a definition of 'part of a ship' that is circularly dependent on the bounty period itself","Tiered rate schedule with 6 tonnage bands requiring cross-reference between the main Act and the Schedule","Conditional bounty adjustment mechanism in section 8(3) and 8(4) — rates must be recalculated whenever Customs duty changes, with different rules depending on whether construction has already begun and whether the contract contains a price-adjustment clause","Profit claw-back provisions in section 10 with nested subsections covering withholding, recovery, discretionary allowances for prior-year losses, and consolidated treatment of affiliated entities","Annual cap with proportional reduction formula in section 5(2) — requires calculating each claimant's pro-rata share if total claims exceed £50,000","Instalment payment regime in section 9 requiring quarterly ministerial valuation of partially completed ships","Dual compliance obligations (wage certification AND workmanship approval) creating two independent grounds for bounty forfeiture","Cross-referencing to external legislation — the Imperial Merchant Shipping Act 1894 and Commonwealth/State industrial arbitration awards and determinations","Compelled testimony regime with oath/affirmation provisions and a self-incrimination carve-out (sections 16–19)","References to monetary amounts in pre-decimal currency (pounds, shillings, pence) that require conversion for modern interpretation"],"plain_english_summary":"## Ship Bounty Act 1939 — Plain English Summary\n\n### What does this law do?\n\nThis Act creates a **government payment scheme** (called a \"bounty\") to encourage Australians to build ships domestically. In essence, the Commonwealth pays shipbuilders a cash reward — calculated per \"gross ton\" (a standard measure of a ship's size) — for every qualifying ship they build in Australia.\n\n---\n\n### Who does it affect?\n\n- **Shipbuilders** (called \"builders\") who construct qualifying vessels at government-approved Australian shipyards\n- **Workers** in those shipyards — the law protects their wages and conditions\n- **The Commonwealth Government**, which funds the bounty from general revenue\n\n---\n\n### What ships qualify?\n\nTo receive the bounty, a ship must be:\n- **Powered by machinery on board** (not sail or external power)\n- **Built from iron or steel**\n- **One of these types:** passenger ship, cargo ship, collier (coal carrier), ferry, tug, trawler, hopper barge, tanker, or a vessel for government/public utility use\n- **Built in an approved Australian shipyard** after the Act commences\n- **Not a naval warship**\n\nThe bounty also covers **partially built ships** if construction started but wasn't finished within the bounty period.\n\n---\n\n### How much is the bounty?\n\nThe bounty is paid **per gross ton** and depends on the size of the ship. Larger ships attract a lower rate per ton — the rate steps down as tonnage increases:\n- Ships of 100–750 gross tons: **£12/10s per ton**\n- Ships of 750–900 gross tons: **£12 per ton**\n- Ships of 900–1,050 gross tons: **£11/10s per ton**\n- Ships of 1,050–1,200 gross tons: **£11 per ton**\n- Ships of 1,200–1,350 gross tons: **£10/10s per ton**\n- Ships of 1,350–1,500 gross tons: **£10 per ton**\n\nThe bounty scheme lasts for **three years** from when the Act commences.\n\n---\n\n### Key rules and limits\n\n- **Annual cap:** The government cannot pay more than **£50,000 per financial year** in total bounties. If all valid claims exceed this cap, each builder's payment is reduced proportionally.\n- **Profit cap:** If a builder's net profit exceeds **10% per year** on the capital they invested, the Minister can **claw back** bounty already paid or withhold future payments.\n- **Fair wages requirement:** Builders must certify that they paid workers at least the award wages (minimum pay rates set by courts or industrial tribunals) applicable in their area. Failure to do so can result in losing the bounty.\n- **Workmanship standard:** The Comptroller-General of Customs must be satisfied that the quality of construction is acceptable.\n- **Instalment payments:** Builders can apply to receive the bounty in quarterly instalments as construction progresses, rather than waiting until the ship is finished.\n- **Customs duty interaction:** If import duties on ships go up (making it cheaper to buy overseas), the bounty rate is adjusted down by an equivalent amount, and vice versa.\n\n---\n\n### Compliance and oversight\n\nBuilders must:\n- Keep **detailed financial records** and have them audited\n- Allow government inspectors to **board ships, enter yards, and examine books**\n- Answer questions under **oath** if required\n- Provide **security** (a bond or deposit) if the Minister requires it\n\n**Penalties** apply for:\n- Obtaining a bounty you're not entitled to\n- Making false statements — up to **£500 fine or 12 months' imprisonment**\n- Refusing to cooperate with inspectors — **£50 fine**\n\n---\n\n### Transparency\n\nThe government must produce an **annual report to Parliament** listing every builder who received bounty, how much they got, and details of each ship.\n\n---\n\n### Why does it matter?\n\nThis Act was created in **1939 — at the outbreak of World War II** — to stimulate Australia's domestic shipbuilding industry at a time when the ability to build and repair ships was strategically vital. It reflects a classic use of bounties (government subsidies tied to production) to develop local industrial capacity."},"issue_detection":{"absurdities":[{"type":"circular_definition","section":"Section 3(1) — definition of 'part of a ship'","severity":"high","reasoning":"The drafters appear to have confused the concept of an incomplete ship (i.e., one whose construction straddles the bounty period) with the concept of a 'part of a ship' (i.e., a discrete component such as a keel, hull section, or engine). By defining 'part of a ship' as 'a ship the keel of which is laid... but the construction of which is not completed,' the Act creates a circular absurdity: a part of a ship IS a ship. This directly undermines s.7 and s.8(2), which treat ships and parts of ships as distinct bounty-attracting categories, and makes s.8(2)'s proportional bounty calculation for 'parts of ships' logically incoherent — you cannot calculate what proportion a 'ship' bears of itself.","confidence":0.92,"description":"The definition of 'part of a ship' defines it as 'a ship the keel of which is laid after the commencement of this Act but the construction of which is not completed at the expiration of the period of the bounty.' In other words, a 'part of a ship' is defined as being a 'ship' — a complete circular definition that provides no independent meaning. A part of a ship is not a ship; it is a component of one. The definition should describe structural components, assemblies or incomplete hulls, not a whole ship."},{"type":"impossible_compliance","section":"Schedule — Tonnage brackets (gaps and ceiling)","severity":"high","reasoning":"The Act's mandatory bounty payment mechanism is entirely dependent on the Schedule for its rate. A ship of, say, 2,000 gross tons is a perfectly valid 'ship' under s.3(1) and is eligible for bounty under s.7, yet the Schedule provides no rate for it. The Minister cannot pay a bounty that has no legislated rate, and yet the Act appropriates funds and mandates payment. This creates an administrative impossibility for any ship outside the 100–1,500 ton bracket. The absence of a residual or catch-all rate means large vessels — arguably the most economically significant — are stranded without an applicable bounty rate.","confidence":0.88,"description":"The Schedule specifies bounty rates only for ships with gross tonnage between 100 and 1,500 tons. Ships of 100 gross tons or fewer, and ships exceeding 1,500 gross tons, are entirely absent from the Schedule. Yet ss.7 and 8(1) state that bounty 'shall be payable' at 'such one of the rates specified in the Schedule as is appropriate to the ship.' For ships outside these brackets, there is no applicable rate, making it impossible to determine the bounty payable — or arguably making it zero."},{"type":"other","section":"Section 2 — Commencement by Proclamation","severity":"medium","reasoning":"Proclamation-based commencement is standard, but in a time-limited bounty scheme the date of commencement is critical — it directly determines the end of the bounty period. Every day of delay in Proclamation permanently shrinks the bounty window. There is no provision extending or saving the three-year period to account for delayed Proclamation, no sunset clause requiring Proclamation within a fixed time, and no fallback. The Act was assented to on 8 December 1939 (wartime) and if Proclamation was delayed even modestly, builders who laid keels in good faith might find themselves outside the period.","confidence":0.75,"description":"The Act defines 'ship' in s.3(1)(d) as one 'the keel of which is laid after the date of the commencement of this Act.' Commencement is triggered by Proclamation under s.2. However, the Schedule specifies the Period of Bounty as 'Three years from the date on which this Act comes into operation.' If a Proclamation is never made, the Act never commences, the Period of Bounty never starts, and no bounty is ever payable — rendering the entire Act permanently inoperative without any breach occurring. While not uncommon in Australian legislative practice, the combination with a fixed three-year bounty period creates a structural trap: delay in Proclamation permanently reduces the effective bounty window without any compensating mechanism."},{"type":"other","section":"Section 10(1) and 10(5)","severity":"medium","reasoning":"Using pre-tax profit to determine whether a builder has 'profited excessively' is economically irrational. A builder in a high tax bracket could find their effective after-tax return well below 10% while still being subjected to bounty clawback. The 10% threshold was presumably intended to represent a reasonable return on capital — a concept that only makes sense after tax. Measuring it pre-tax inflates the apparent profit and makes the threshold effectively much harder to stay under, potentially discouraging ship construction — the very opposite of the Act's stated purpose.","confidence":0.82,"description":"Section 10(1) allows the Minister to withhold or recover bounty where a builder's net profit exceeds 10% per annum on capital. Section 10(5) provides that income tax shall NOT be deducted from profit when calculating net profit for this purpose. This means the profit threshold is measured on a pre-tax basis. A builder could have a pre-tax profit of, say, 15% but an after-tax profit of 7% — meaning they have actually not profited excessively in real terms, yet the Minister may claw back their entire bounty. The provision effectively punishes builders for their tax obligations, which are beyond their control."},{"type":"impossible_compliance","section":"Section 9(2) — Instalment payment quarters","severity":"medium","reasoning":"The provision attempts to marry a rolling bounty period (starting from an arbitrary Proclamation date) with fixed calendar quarter-ends. These two timing mechanisms are incompatible unless the Proclamation happens to fall precisely on 1 January, 1 April, 1 July, or 1 October. In any other case, the 'portion of a quarter' language tries to bridge the gap but creates ambiguity: is the first instalment due at the first calendar quarter-end after commencement, or at the actual three-month anniversary of commencement? The Minister's discretion does not resolve this structural ambiguity.","confidence":0.79,"description":"Section 9(2) provides that bounty instalments are payable 'after the expiration of each quarter (or portion of a quarter) of the period of the bounty ending on the last day of the months of March, June, September and December.' However, the Period of Bounty runs from the date the Act commences (per the Schedule) — which is determined by Proclamation and could fall on any arbitrary date. If the Act commences on, say, 15 February, the first quarter of the bounty period ends on 15 May, not on a March/June/September/December quarter-end. The instalment schedule is therefore structurally misaligned with the actual bounty period for virtually any realistic commencement date."},{"type":"other","section":"Section 8(3) — Bounty reduction on Customs duty increase","severity":"medium","reasoning":"The evident purpose of the Act is to encourage domestic ship construction. Customs tariffs on imported ships serve the same protective purpose. The drafters presumably intended to prevent 'double-dipping' — receiving both tariff protection and bounty simultaneously — but the mechanism is blunt and creates a perverse outcome. A builder who benefits from a tariff increase they had no control over sees their bounty automatically cut, even though the tariff increase may not actually translate into higher prices or profits for them (e.g., if they have fixed-price contracts). The mandatory nature ('shall forthwith') allows no discretion to consider whether the reduction is actually warranted in a given case.","confidence":0.71,"description":"Section 8(3) mandates that if the rate of Customs duty on an imported ship is increased, the Minister 'shall forthwith cause to be made such reduction in the rate of bounty... as is equivalent to that increase.' This means the domestic bounty for Australian-built ships is automatically reduced whenever the tariff protection for those same ships against imported competitors is increased. The policy effect is perverse: the more the government protects Australian shipbuilders from import competition (by raising tariffs), the less bounty support they receive. Increased protection and reduced subsidy are applied simultaneously."}],"contradictions":[{"severity":"high","section_a":"Section 3(1) — definition of 'part of a ship'","section_b":"Section 8(2) — bounty rate for parts of ships","confidence":0.9,"description":"Section 3(1) defines 'part of a ship' as 'a ship the keel of which is laid... but the construction of which is not completed.' Section 8(2) then calculates bounty for a 'part of a ship' as a proportion of what 'would have been payable if the construction of the ship had been completed.' If a 'part of a ship' IS by definition a 'ship,' then s.8(2)'s calculation — comparing the value of 'the part of the ship' to 'the value which the ship would have on completion' — compares a ship to itself, yielding a proportion of 1:1 and making the distinction between ss.8(1) and 8(2) meaningless. The two provisions cannot be coherently applied together."},{"severity":"high","section_a":"Section 7 — bounty payable on ships 'wholly constructed'","section_b":"Section 8(2) — bounty payable on 'part of a ship'","confidence":0.85,"description":"Section 7 restricts bounty to ships 'wholly constructed in accordance with the prescribed conditions, in a yard, during the period of bounty.' The word 'wholly' implies complete construction within the bounty period. However, s.8(2) explicitly provides for bounty on a 'part of a ship,' which by definition (s.3(1)) is a ship whose construction is NOT completed during the bounty period. Section 7 appears to exclude the very scenario that s.8(2) is designed to cover. A builder of an incomplete ship faces directly contradictory instructions: s.7 says no bounty unless wholly constructed; s.8(2) says bounty is available on proportional value for incomplete construction."},{"severity":"medium","section_a":"Section 10(1) — Minister MAY withhold bounty where profit exceeds 10%","section_b":"Section 10(2) — Minister MAY withhold or recover where payment WOULD result in excess profit","confidence":0.72,"description":"Section 10(1) applies where profit HAS already exceeded 10% and gives the Minister a discretionary power to withhold or recover bounty. Section 10(2) applies where payment WOULD result in excess profit — a forward-looking trigger. However, s.10(1) also refers to recovery of bounty 'which has been paid,' while s.10(2)(a) also provides for refund of bounty 'paid.' The two subsections therefore overlap substantially in their operation — both can apply to the same facts (profit already exceeds 10% due to bounty paid) — but impose subtly different tests and do not clarify which provision prevails or whether both can be exercised cumulatively against the same builder for the same period."},{"severity":"medium","section_a":"Section 5(1) — annual bounty cap with carryover of unused amounts","section_b":"Section 5(2) — pro-rata reduction of claims when cap is insufficient","confidence":0.68,"description":"Section 5(1) provides that unspent bounty from one financial year may be carried over and paid in subsequent years 'in addition to the maximum amount.' Section 5(2) provides that if the available bounty in any year is insufficient for all valid claims, each claim is reduced proportionally. Read together, the carryover provision of s.5(1) should increase the available pool in subsequent years, potentially avoiding the pro-rata reduction of s.5(2). However, s.5(3) gives the Minister discretion to withhold bounty payments until he has ascertained the total of valid claims — meaning carried-over funds may be withheld indefinitely, undermining the certainty the carryover provision was meant to provide. The interaction between these three subsections creates an indeterminate payment regime."},{"severity":"medium","section_a":"Section 8(3) — mandatory bounty reduction on Customs duty increase","section_b":"Section 8(4) — restoration of bounty after subsequent duty changes","confidence":0.7,"description":"Section 8(3) mandates reduction in bounty when Customs duty increases. Section 8(4) provides for restoration (or further reduction) of bounty when duty subsequently changes, but includes a proviso that bounty cannot be restored above 'the appropriate rate specified in the Schedule.' However, s.8(3) applies an automatic, mandatory reduction with no floor — the bounty could theoretically be reduced to zero or below (the Act does not specify a floor of zero). If bounty is reduced to zero under s.8(3), s.8(4)'s ceiling proviso referencing the Schedule rate becomes the only constraint on restoration, but there is no explicit provision permitting restoration all the way back to the Schedule rate if duty subsequently falls back to its original level, creating an asymmetric ratchet effect."}]}},"importantCases":[],"_links":{"self":"/api/acts/ship-bounty-act-1939","history":"/api/acts/ship-bounty-act-1939/history","analysis":"/api/acts/ship-bounty-act-1939/analysis","conflicts":"/api/acts/ship-bounty-act-1939/conflicts","importantCases":"/api/acts/ship-bounty-act-1939/important-cases","documents":"/api/acts/ship-bounty-act-1939/documents"}}