Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Immigration and Border Protection) Share this | Hansard source

I rise to speak on the Customs Tariff Amendment (Incorporation of Proposals) Bill 2018. The bill before the House contains a number of small amendments to the Customs Tariff Act 1995, and from the outset I will say that Labor will support this bill. These amendments are consistent with the Customs Tariff Proposal (No. 1) 2018 tabled in parliament on 7 February 2018 and the Customs Tariff Proposal (No. 2) 2018 tabled in parliament on 31 May 2018. The bill also makes a technical amendment to schedule 12 of the Customs Tariff Act. These changes will support business, including Australia's agricultural industry, ensure ongoing relations with Indonesia and clarify the framework relating to tariffs.

Whilst Labor welcomes these amendments, I note that it has taken this out-of-touch Turnbull government a long time to implement these changes—much longer than was expected by industry. Some of these commitments were first announced by the Prime Minister and the President of the Republic of Indonesia on 26 February 2017. Then, on 20 September 2017, the Minister for Trade, Tourism and Investment, and his Indonesian counterpart, had what Fairfax described as a 'groundhog day' moment, announcing these commitments again, the same commitments announced some seven months earlier by the Prime Minister. Matthew Busch, a research fellow at the Lowy Institute, described the announcement in The Interpreter:

Somewhat incredibly, these were essentially the same items the leaders announced in February. That it took seven months to draw up the rules makes one wonder if they were hastily thrown together at the end of a visit otherwise devoid of concrete economic progress.

The Turnbull government stated they were going to have a free trade agreement with Indonesia, the Indonesia-Australia Comprehensive Economic Partnership, finalised by the end of 2017, but I note they failed to achieve that, continually shifting the goalposts as negotiations with Indonesia continued. We would expect that any free trade agreement would be in the best interests of Australian businesses, consumers and local workers and urge the government to do it with utmost diligence and competency.

The Customs Tariff Amendment (Incorporation of Proposals) Bill implements an earlier outcome of the Indonesia-Australia closer economic partnership agreement. The bill repeals certain items in schedule 8, bringing forward the removal of customs duties for several herbicides and pesticides. These measures are outlined in Customs Tariff Proposal (No. 1) 2018. By repealing those items, duties on certain imports are removed, including rodenticides, fungicides, antisprouting products and plant growth regulators, disinfectants containing a certain range of active substances, and all insecticides and herbicides imported from Indonesia. Previously the duty for these items was set at five per cent, reducing to 'free' from January 2020. By bringing the removal of these items forward, Indonesian pesticides and herbicides used by Australian farmers will be more competitive in the Australian market, offering greater choice to consumers.

I note the application of these duties is retrospective to 20 September 2017—and I might call that the date of groundhog day announced by the minister for trade. I urge the government to monitor any impacts of the removal of the duty on these items, including ensuring illegal and counterfeit pesticides do not enter Australia. In return for these measures, Indonesia will reduce customs duties on Australian sugar exports from Australia into their country, which I will detail the benefits of shortly.

The bill creates a new schedule to provide a 'free' rate of customs duty for placebos imported for certain clinical trials and clinical trial kits containing either or both medicaments and placebos. Currently, these are classified to separate parts of the Customs Tariff Act and must be separately identified and quantified under reporting requirements. These changes simplify import reporting requirements for these items imported for use in clinical trials, with the aim of promoting Australia as a destination for international clinical trials.

As mentioned, this bill makes a technical amendment to schedule 12 of the Customs Tariff Act. Section 12 of the Customs Tariff Act relates to originating goods for which there is or was a customs duty other than 'free' at the time that the China-Australia Free Trade Agreement entered into force. Table item 135 is now redundant. The amendments before the House remove the table of preferential customs duty rates. The removal of table item 135 aligns schedule 12 and schedule 3. I note that the financial impacts of the bill before the House are very minimal—a total of $3 million over the forward estimates—with zero financial impact from 2020-21 and financial years onwards.

Following Australia's commitments that I detailed earlier, the Indonesian government has agreed to reduce the customs duty on Australian sugar exports in return. I'm pleased that the Indonesian agreement has been welcomed by Australian sugarcane growers. In 2015 the Indonesian government reduced the tariff on sugar exports from Thailand to Indonesia to a rate of five per cent. By comparison, the tariff rate for Australian sugar exports remained at eight per cent. Whilst these percentages may mean little to the average Australian or layperson, the three per cent rate means that Thai sugar was around $30 per tonne cheaper to import into Indonesia than Australian sugar. In early 2017 canegrowers said that the result of this was that Australian sugar exports to Indonesia fell from one million tonnes per annum to 200,000 tonnes per annum. This loss of sales into Indonesia between 2015 and 2017 alone meant a financial burden on Australian sugarcane growers, with exporters forced to look to other countries to export to.

Australia is the second-largest raw sugar exporter in the world, with countries in Asia, such as South Korea, Indonesia, Japan and Malaysia, being some of our most important markets. Throughout regional and rural Queensland, my home state, and northern New South Wales there are 4,000 farmers, who grow 35 million tonnes of sugarcane each year. As a proud Queenslander I can say that 95 per cent of Australian sugarcane is grown in Queensland, and it's vital for country towns such as Bundaberg, Mackay, Ayr and Gordonvale. Sugarcane production is worth $2.5 billion to the Australian economy, and hopefully these tariff changes—and Indonesia has also committed to allow further exports—will mean growth and revenue for an industry that's vital to the Australian economy and vital to my home state's economy. Whilst it may take some time for the economic benefits of Indonesia's tariff reduction to flow through, we on this side of the chamber welcome Indonesia's commitments, because they mean opportunities for Queensland and Australian sugarcane growers.

The Customs Tariff Amendment (Incorporation of Proposals) Bill 2018 makes some very small albeit very important amendments to the Customs Tariff Act 1995. Labor will always hold the Turnbull government to account, even in matters such as tariff proposals. to ensure that our complex and important tariff framework is clear and functional. I would urge the Turnbull government to continue its work with its Indonesian counterparts to ensure the best possible trading environment for Australian business and consumers alike, particularly for sugarcane growers in my home state of Queensland. I commend the bill to the House.

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