This paper uses historical annual data for 27 years from 1968-69 on eight t
wo-digit ANZSIC industries to assess the impact of the changes in industry
assistance on economic efficiency. The empirical analysis shows that a 1 pe
r cent decline in the nominal rate of assistance leads to between 0.18 and
0.56 per cent sain in total factor productivity, the latter our measure of
economic efficiency. This finding has strong policy implications for the fu
ture of tariff reform in the manufacturing sector.