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

I rise in support of the amendments to the Customs Tariff Act. The federal government is committed to protecting Australia's borders and keeping Australians safe. This is why goods that are imported into Australia require correct classification under the current Customs Tariff Act 1995. We also require importers to self-assess their goods, including the tariff classification of their cargo. This is how we monitor and control what comes into and what goes out of Australia, so it's vital that the information importers provide us is accurate.

The purpose of the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 is to update Australia's current tariff codes in the Customs Tariff Act 1995 to be consistent with the updated international 2022 harmonised system. It's important for Australian traders and the trade industry that we implement the changes agreed to in the sixth review of the Harmonized Commodity Description and Coding System because Australia needs to keep up with the times and keep the country's economy moving. The patterns of international trade are constantly changing and evolving every day, and new technologies are emerging, so the measures in this bill will ensure that Australia's customs tariff system, which is based on the harmonised system, reflects these changing patterns, technological developments, changing volumes of trade and the relative growth and decline in the importance of certain goods.

The World Customs Organization first developed the harmonised system to strengthen and support trade between countries with different trade regulatory arrangements. Every five years the World Customs Organization updates the international harmonised systems tariff headings and subheadings to reflect changing trade patterns and emerging goods. Australia is one of almost 200 countries that use the harmonised system. The harmonised system has 97 chapters, split into headings and subheadings. Each heading and subheading has a unique code and description, and these can be used to classify all tradeable goods. These codes and descriptions are agreed to by all 198 members of the World Customs Organization, or WCO, including Australia. Australia independently determines the customs duties that apply to goods traded into Australia. We use a structure provided by the harmonised system, supplemented by domestic subheadings, to identify those goods that are subject to Australian customs duties. All WCO members, including Australia, need to implement the 2022 harmonised system in their domestic tariff codes by 1 January 2022.

I would like to list some of the ways the 2022 harmonised system update will ensure that international tariff codes and Australia can keep pace with modern types of goods and changing trade patterns. There will be changes to reflect technological change. New classifications will be created for new and emerging products such as drones and 3D printers, and classifications will be removed for products that are no longer commonly traded, such as world globes and answering machines. There will be changes to reflect changing patterns of consumption. New classifications will be created for products with increasing or diversifying patterns of trade, such as edible insects and certain electronic components. There will be changes to improve monitoring of goods. New classifications will be created to improve the monitoring of goods such as e-waste and chemicals and substances controlled under international conventions.

As a businessman, I know how vital it is for Australian businesses who import and export goods and cargo that the Australian government implements these changes to the Customs Tariff Act on 1 January 2022. Ensuring Australia's tariff code reflects the most up-to-date version of the harmonised system will make it easier for our importers and exporters to trade with other countries. Our Australian businesses have already been through enough due to the COVID-19 pandemic, and the Australian government is committed to getting local businesses back on their feet so that they have the confidence to invest and take on more staff. This is why we must open more doors for them, to allow them to trade, grow, expand, create more job opportunities and thrive. The sooner the amending legislation is introduced, the sooner Australian businesses can begin preparing for the new version of the harmonised system.

On a very positive note, Australia was able to secure a number of important outcomes requested by Australian businesses in the process of negotiating the update to the harmonised system. These priority outcomes included securing our preferred definition of virgin olive oil, a single classification code for placebos in clinical trial kits, our preferred classification for LED lighting products and separate classification for synthetic diamonds.

As a rule, Australia's changes to our tariff code are required to be consistent with the updated harmonised system on a duty-rate-neutral basis—that is, whatever duty rate applied to goods under their old classification will continue to apply to the new item under the new classification. For the current update, three categories of goods cannot be updated on a duty-rate-neutral basis. These three categories of goods are flat panel displays, which are electronic display screens that enable viewing of images or text and are commonly incorporated in consumer electronics, cars, industrial and medical equipment and entertainment devices; semiconductor based transducers, which are electronic components that convert physical or chemical interactions into an electrical signal and vice versa—for example, temperature and light sensors; and electronic waste and scrap, which is goods such as computers, microwaves and batteries which can no longer be used for their original purpose. We will create new classifications for these three categories of goods as part of the 2022 harmonised system. Goods will transfer to these new classifications from many different existing classifications, which means it is not possible to maintain all the different duty rates that may have been applied to these goods. The duty rates for these three categories of goods will be set as free, to ensure that no importers are worse off.

As part of the 2022 harmonised system, we will create a new classification for tobacco products intended for inhalation without combustion, as used in e-cigarettes for vaping. These goods are currently classified as 'other tobacco' and have an excise equivalent customs duty of $1,576.57 per kilogram of tobacco content applied. We need to amend the Customs Act 1901 to ensure this new classification falls within the scope of existing border measures for tobacco products. This means importers will continue to pay duty on these goods at the border, like all other tobacco products, so there is no new risk to the revenue. We also need to amend the Customs Tariff Act 1995 to ensure the excise equivalent customs duty rate applied to these goods is indexed twice a year like other tobacco.

International trade and investment are critical to boosting and strengthening Australia's economy. This is why updating the country's current tariff codes in the Customs Tariff Act 1995 to be consistent with the updated international 2022 harmonised system is of vital importance to Australian traders and trade industry. By making the amendments to the act and ensuring that Australia's tariff is consistent with the international harmonised system used by our trading partners, the Australian government can support our importers and exporters, and at the same time create jobs and further prosperity. Not only that but, as I mentioned earlier, the patterns of international trade are constantly changing and evolving.

We don't want Australia to be left behind and miss out on all the technologies or opportunities that are now starting to emerge and develop. We want Australia to be leading by example. We want to be able to keep up with these changing patterns in the international trade industry, technological developments, changing volumes of trade, and the relative growth and decline in importance of certain goods because, if we don't, we risk not being able to enhance the wellbeing of Australians by supporting economic growth and innovation both now and into the future. By saying yes to these amendments to the act, we are acting in Australia's best interests and opening further opportunities for our country's economic development.

For our local businesses across the country, international trade and investment open up all sorts of opportunities for Australians to expand their businesses, with market access across all areas of trade—goods, services and investment—and help to maintain and stimulate the competitiveness of Australian firms. This can be improved through trade agreements, which in turn benefit Australian consumers through access to an increased range of goods and services. I'm hoping these amendments will instil and inspire confidence in Australian businesses so they can import goods, trade, grow and thrive.

In short, this bill will open up doors and great opportunities for Australia's import and trade industry. I hope this House will see the benefit it will bring to traders, business owners and importers as well as to Australia's economy. We need to say yes to changes to boost and strengthen our economy. We're on the right track to recovering fully from this pandemic and we want to bounce back better than ever, so we can't let opportunities like these pass by. In saying that, I commend these bills to the House.

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