Terry Young (Longman, Liberal National Party) Share this | Hansard source

I rise today to speak about some important amendments to the Customs Tariff Act 1995. The changes we are proposing incorporate three proposals that have been tabled in parliament this year which provide for a free rate of customs duty for a range of imported goods. The measures contained in these proposals will continue to support the availability of vital health and hygiene products in the community, contribute to our ability to fulfil international defence commitments and facilitate continued research and development in the automotive sector.

Customs tariff proposal No.1 will extend the free rate of customs duty for imported prescribed medical and hygiene products that can be used to combat COVID-19. The coronavirus continues to spread around the world at an alarming rate. While our record on suppressing the virus here in Australia has been world leading, recent and ongoing lockdowns make it clear that we are not out of the woods yet. In fact, the delta variant of the virus has proved to be the most contagious and is responsible for our current state of lockdowns and community restrictions.

The latest data on COVID-19, at the time this speech was written, reveal there have been 280 locally acquired cases in the past 24 hours. There are currently 4,727 active cases and 433 people are in hospital. But Australia is rising to the challenge. There have been 168,120 COVID tests done in the past 24 hours. In my home state of Queensland there are currently 144 active cases. We have just come out of a five-day lockdown and many restrictions remain in place. Meanwhile, Australia's vaccine rollout is gaining pace. As of Saturday, there have been more than 13½ million doses delivered. The Australian government remains committed to protecting the health of all Australians and we are doing our part, along with the state governments, to suppress the virus as best we can.

One of the tools we have is to make it easier to import medical and hygiene products that will help us fight this terrible pandemic. The first amendment to the Customs Tariff Act is an extension of a temporary free rate of customs duty for a selection of imported prescribed medical and hygiene products to combat COVID-19. Specific goods covered by the measure include facemasks, gloves, clothes or gowns; goggles, glasses, eye visors or face shields; disinfectant preparations classified to heading 3808 in schedule 3 to the Customs Tariff Act, excluding hand sanitisers; soaps; and COVID-19 test kits, reagents and viral transport media.

This proposal contains a measure that extends the free rate of customs duty for these eligible goods from 31 December 2022 to 30 June 2021. This tariff concession initially started on 1 February 20. Through consultation with stakeholders, including Australian businesses, the measure has been extended twice to continue to meet the needs of the community during the COVID-19 pandemic. The end date was previously extended from 31 July 2020 to 31 December 2020. This latest extension of the measure to 30 June 2021 is expected to reduce receipts by $3.8 million across the forward estimates. This extension to the free rate will ensure individuals and businesses continue to have access to the essential supplies required to keep themselves and other members of the community safe. It will also help ensure that Australia remains a competitive market for these essential medical and hygiene goods and allow the community to source these goods for those people who need it most, such as healthcare professionals and other essential workers.

The second amendment to the Customs Tariff Act that we are debating here today provides a free rate of customs duty from imported goods that were used in the F-35A Lightning II Joint Strike Fighter program. This program is a plan for affordable next-generation strike aircraft weapon systems for our armed forces and our allies. The Australian government has already acquired around 30 of the Lockheed Martin designed Lightning II aircraft. We will eventually acquire 72 Joint Strike Fighters in total, along with associated weapons, spares, support equipment and infrastructure.

The F-35A brings cutting-edge technologies to the battle space of the future and is critical to achieving the objectives set out in the 2020 Defence strategic update to shape, deter and respond. Our fleet of F-35As will fulfil the functions of air dominance and strike capability currently provided by F/A-18A/B Hornets. The F-35A Lightning II, in concert with the Super Hornet and Growler aircraft, will be a potent air combat capability mix. This will provide the Royal Australian Air Force with crucial air combat power to meet Australia's needs beyond 2030.

Australia is acquiring F-35A as part of an international cooperative program led by the United States. Under the agreement, partners bid for and win work on the global program on a best-value basis. Australia has won over $2.7 billion worth of work, with more than 50 companies involved. In time, this will expand to include maintenance and repair for a range of system components in support of the global fleet. Australia will continue to work with the United States and our industry partners as more aircraft are delivered through to 2023.

The amendment to the Customs Tariff Act supports Australia's participation in the Joint Strike Fighter production, sustainment and follow-on development memorandum of understanding. This memorandum was signed in 2006 and commits to achieving tax neutrality. This measure is estimated to reduce customs duty receipts by $6.7 million over the forward estimates.

Finally, the third amendment to the Customs Tariff Act 1995 that we are debating here today incorporates a measure to provide a free rate of customs duty for certain imported motor vehicles and motor vehicle components. These vehicles and components must have been imported by an automotive service provider previously registered under the Automotive Transformation Scheme. While registrations under the scheme have closed, the time for working out duty runs to 30 June 2025. These goods included under the amendment measure must be imported for use in the testing, quality control and manufacturing evaluation or engineering development of motor vehicles designed or engineered in Australia. This measure extends to the treatment previously provided to these goods during the operation of the Automotive Transformation Scheme.

This scheme supports the Australian automotive industry and aims to encourage competitive investment, innovation and economic sustainability through financial assistance. Under the scheme, motor vehicle producers were covered for up to 15 per cent of the cost of eligible plant and equipment and 50 per cent of eligible research and development investments. With the end of the second stage of this scheme, this concessional item ensures that companies previously registered under the scheme can continue to access a customs duty concession and are not subject to additional regulatory burden. This measure is about supporting the automotive manufacturing industry, facilitating continued research and development in the automotive sector and supporting local jobs. It responds to concerns from the automotive industry that the end of the concession would significantly disrupt research and development activities. The measure is estimated to reduce customs duty receipts by $1.7 million across the forward estimates.

The amendments to the Customs Tariff Act 1995 that we are debating here today are vital to Australia's continued health and economic recovery from the COVID-19 pandemic as well as our national security. The world in which we live is always changing, and we as a government need to change with it and support those vital industries that keep us safe and support our economy. One of the ways in which we can do this is by amending our existing customs tariff legislation to reduce import duties on goods that are so important to our future.

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