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

I rise to speak on the Customs and Other Legislation Amendment Bill 2016. I say at the start: Labor will support this bill today which amends the Customs Act 1901, the Commerce (Trade Descriptions) Act 1905 and the Maritime Powers Act 2013. The bill amends the Customs Act to: allow for the exemption from paying import declaration processing charges; extend the circumstances in which an application can be made to move, alter or interfere with goods for export that are the subject of customs control; clarify and simplify the provisions concerning the making of tariff concession orders, or TCOs, for made-to-order capital equipment; and remove some unnecessary and outdated provisions.

The Commerce (Trade Descriptions) Act will be amended to provide that the Commerce (Imports) Regulations 1940 may prescribe penalties for offences against those regulations. The bill amends the Maritime Powers Act to confirm that the powers under that particular act are able to be exercised in the course of passage through or above the waters of another country in a manner consistent with the United Nations Convention on the Law of the Sea.

The bill enables Australia to honour its international agreements that specifically exempt certain imports from payment of fees at the border. Currently, section 71B of the Customs Act sets out when a person is liable to pay import declaration processing charges. Currently, there is no capacity within the legislation for a person to be exempt from paying these charges. As a result of the current section 71B, Australia is unable to honour its international obligations and the agreement that specifically exempts some imports from payment of fees at the border. The bill amends section 71B of the Customs Act to add another subsection, subsection (4), to allow the minister, by legislative instrument, to determine that some specified persons, some persons in respect of specified goods or specified persons in respect of specified goods are not liable to pay an import processing charge. The new subsection (6) allows for the refund of any charges paid where the person was exempt from paying. A new subsection (7) sets out that, if a person is liable to pay, it will be considered a debt due to the Commonwealth and that the fees may be recovered by action in a court of competent jurisdiction. There is also an amendment to clarify how debts can be recovered for unpaid warehouse declaration processing charges.

Since April 2014, the screening process for liquids, aerosols and gels requires an initial screen. If the item triggers an alarm, it will be more thoroughly rescreened by removing the duty-free packaging. It is an offence under section 33 of the Customs Act to remove duty-free packaging from an item for any reason, including undertaking a second-stage screening. This bill amends the Customs Act to extend the circumstances in which a person can apply to move, alter or interfere with goods for export that are subject to customs control. So it is a necessary amendment. It means that screening staff at an international airport will be able to remove an item that triggers an alarm from sealed duty-free packaging and open a sealed duty-free bag and screen items without breaking the Customs Act. So it is a necessary thing for the protection of our borders.

The tariff concession orders are granted on imported goods when substitute goods are not being produced in Australia. Those products can be imported at a free rate of customs duty. The Commonwealth of Australia Tariff Concessions Gazette publishes about 50 new TCOs each month. Once published, Australian manufacturers have 50 days to object to the granting of a TCO by providing evidence of the same product being manufactured or produced in Australia. The gazette also publishes the TCO applications that have been reworded, refused, revoked or reissued, or those made.

Currently, for Australian manufacturers to apply to have a tariff concession order revoked or to object to the making of a TCO, they must meet two tests. Australian businesses must demonstrate that at least 25 per cent of factory costs of substitutable goods occur in Australia, and that a substantial process of manufacture is also undertaken in Australia. These two tests must be met.

The explanatory memorandum actually says that goods:

… are taken to have been produced in Australia if, in addition to the goods being wholly or partly manufactured in Australia, not less than one quarter of the factory works or costs of the goods is comprised of the value of Australian labour, materials or overhead expenses incurred in Australia.

Providing this evidence requires Australian businesses to provide details of confidential accounting evidence as part of the objection process. The department has confirmed that Australian manufacturers who have objected to a TCO being issued have been easily able to demonstrate they exceed the 25 per cent factory or works cost test. Following consultation with stakeholders and industry, this bill will reduce the burden of proof on Australian companies by removing the 25 per cent requirement. So it is a red-tape-reduction measure, supported by stakeholders and supported by business. And Labor will support it, obviously.

Schedule 5 clarifies the requirements for an Australian producer of made-to-order capital equipment when seeking to revoke a tariff concession order or object to the making of a TCO. The amendment extends the evidentiary window for a local manufacturer to prove their capability of production of substitutable goods. The time frame will be extended from two years to five years on the basis that a two-year period is insufficient for an Australian manufacturer to demonstrate capability for large-scale capital works like unique mining machinery, given the amount of time and labour involved in such manufacture.

The Commerce (Trade Descriptions) Act contains a number of offence provisions that impose penalties. Schedule 7 of the bill amends the Commerce (Trade Descriptions) Act to allow an officer to inspect and examine 'goods that are, or that the officer reasonably believes are, goods prescribed by the regulations' that are imported.

Schedule 8 confirms that, in a manner consistent with the intent of the 1982 United Nations Convention on the Law of the Sea, powers under the Maritime Powers Act can be exercised in the course of passage through or above the waters of another country. Currently, the Maritime Powers Act prevents the exercise of powers at a place in another country except in defined circumstances. For the purposes of the act, a 'country' is defined to include territorial seas and other waters.

Finally, Schedule 9 repeals the Customs (Tariff Concession System Validations) Act 1999 and the Import Processing Charges (Amendment and Repeal) Act 2002, as these acts are now redundant.

In the circumstances, this is the sort of bill that Labor would draft if we were in office. I commend the government for their cooperation with the Labor opposition in briefing us about the purpose of this legislation and its contents, and we will support the bill accordingly.

Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

I rise to sum up this bill and to thank the member for Blair for his contribution to it on behalf of the Labor Party and to thank the other members who have spoken on it.

The Customs and Other Legislation Amendment Bill 2016 contains amendments to the Customs Act 1901, the Commerce (Trade Descriptions) Act 1905 and the Maritime Powers Act 2013. The amendments to the Customs Act do a number of things. They provide for regulations to be made that would allow the defence minister to revoke a licence or permission to export goods if he or she is satisfied the exportation of the goods would prejudice the security, defence or international relations of Australia.

This amendment strengthens Australia's defence and strategic goods export control regime by providing the defence minister with greater flexibility to revoke export permits before goods are exported from Australia. It also streamlines the Australian Trusted Trader accreditation process, removing the need for trusted traders to enter into an initial agreement conferring interim trusted trader status, so that only one agreement which confers full trusted trader status is entered into with each trusted trader. It also enables Australia to comply with international agreements and treaties involving the application of fees and charges at the border by allowing certain parties or goods to be exempt from liability to pay the import declaration processing charge. It enables the collection of unpaid import declaration processing charges and unpaid warehouse declaration processing charges as debts to the Commonwealth.

The amendment also allows for screening authorities at international airports to open sealed duty-free bags containing liquids, aerosols and gels to enable them to screen the contents while they are subject to customs control. It also removes red tape on Australian manufacturers who object to the making of, or seek to revoke, a tariff concession order by removing one of the two tests they have to meet to prove their case. It clarifies when an Australian manufacturer can apply to have a tariff concession order for made-to-order capital equipment revoked or object to the making of such an order. Finally, it repeals an obsolete provision of the Customs Act that allowed goods to be temporarily imported for the Sydney 2000 Olympic Games and related events.

In addition, the amendments to the Commerce (Trade Descriptions) Act will reflect modern drafting practices and do three additional things: firstly, clarify that an officer may inspect or examine goods that the officer reasonably believes are goods prescribed by the regulations; secondly, change the authority for forming an opinion on disclosing certain information as part of a trade description from the Governor-General to the minister; and, thirdly, insert a head of power to allow the Commerce (Trade Descriptions) Regulation 2016 to prescribe penalties not exceeding 50 penalty units to offences against those regulations.

The amendments proposed in schedule 8 of the bill are intended to confirm the government's clear intent that the powers under the Maritime Powers Act are able to be exercised in the course of passage through or above the waters of another country in a manner consistent with the 1982 United Nations Convention on the Law of the Sea. Finally, Schedule 9 of the bill repeals the Customs (Tariff Concession System Validations) Act 1999 and the Import Processing Charges (Amendment and Repeal) Act 2002, as those acts are now redundant.

Once again, thank you very much to all members who have contributed to the bill. I commend the bill to the House.

Question agreed to.

Bill read a second time.