Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

I say at the start that Labor will support this legislation. The Customs Tariff Amendment Bill 2016 amends the Customs Tariff Act 1995 in four ways: it repeals schedule 1 of the tariff act, which sets out classes of countries and places to which special rates apply; it repeals section 16A of the tariff act, which provided now expired safeguard provisions within the Thailand-Australia Free Trade Agreement; it inserts additional notes into chapters 7, 8 and 19 of schedule 3 to the Customs Tariff Act, to clarify the classification of certain fruits, vegetables and pasta; and it amends the text of item 44 of schedule 4 to the Customs Tariff Act, to provide for an end date for the item in line with announcements in last year's budget. The bill is compatible with human rights and projects $220 million in additional revenue over the forward estimates.

Regarding the repeal of schedule 1 of the Customs Tariff Act, currently section 1 of the act lists countries and places where special non-reciprocal rates of customs duty apply. Some goods originating from countries listed in schedule 1 are entitled to a preferential rate of customs duty. For example, frozen sweet corn imported from Albania would be subject to a preferential rate of customs duty of four per cent rather than the general customs duty rate of five per cent. The bill repeals section 1 to facilitate the content being moved to the Customs Tariff Regulations 2004. When moved to the regulations, it becomes easier, of course, to update countries and places as required in a more timely way. I note the Bills Digest prepared for this bill questioned the explanatory memorandum's rationale for omitting this schedule and moving it to the regulations. It suggests there is no evidence to suggest there will be more significant and frequent changes required to the list of countries and places. Since being enacted on 1 July 1996, schedule 1 has only been amended seven times, with the last amendment occurring five years ago, in March 2012.

The bill also repeals section 16A of the Customs Tariff Act. The Thailand-Australia Free Trade Agreement includes safeguard provisions for certain tuna products, like canned tuna, and some pineapple products. These safeguard provisions were activated at the discretion of the minister for agriculture and expired in December 2008 by mutual agreement from both governments. It is a redundant section; it is appropriate to repeal it.

Schedule 3 of the act classifies goods according to the International Convention on the Harmonized Commodity Description and Coding System, which sets out the rate of the duty applied to the goods. New notes will be added to chapters 7, 8 and 19 of schedule 3 of the Customs Tariff Act to assist with the classification of goods and only have the force of law for goods imported into Australia. This section of the bill answers the important question: when is pasta really a seafood won ton and what type of vegetable is a gherkin? Changes are required in response to two Administrative Appeals Tribunal decisions about gherkins and seafood won tons. The first case sought to clarify whether gherkins should be classified in chapter 7 as an edible vegetable and be imported duty free or in chapter 20 as preparations of vegetables, fruit, nuts or other parts of plants, which would be subject to a five per cent tariff. The second AAT case dealt with the import of frozen dumplings and won tons with a seafood filling—I am filling in here, by the way!—to determine if these goods should be treated as seafood or pasta. In this example, it was unclear if a seafood won ton should be duty free under heading 1605 as 'crustaceans, molluscs and other aquatic invertebrates, prepared or preserved'; or if the seafood won tons should be subject to a five per cent duty and categorised under heading 1902 as 'pasta, whether or not cooked or stuffed—with meat or other substances—or otherwise prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli and cannelloni; and couscous, whether or not prepared'. Often these issues arise when there are multiple products made with the same ingredients. For example, pasta and won tons are both made with flour and water. It might seem trivial, but the incorrect classification of gherkins and won tons has a real financial impact for Australia, overseas suppliers and consumers.

The bill also clarifies the grey areas for the tariff treatment of vegetables, fruit, nuts, pasta and noodles. In the circumstances, we are also supporting the closure of the Enhanced Project By-law Scheme, which was announced in the 2016-17 budget. With that, I support the legislation.

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