Meryl Swanson (Paterson, Australian Labor Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source

I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that:

(1) international trade will be crucial to Australia's post COVID-19 economic recovery; and

(2) the Government's inability to secure a variety of vaccines has left Australians dangerously vulnerable—particularly those in trade exposed industries".

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Is the motion seconded?

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Assistant Minister for External Territories) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Terry Young (Longman, Liberal National Party) Share this | Link to 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.

Madeleine King (Brand, Australian Labor Party, Shadow Minister for Trade) Share this | Link to this | Hansard source

[by video link] I am here today speaking from my electorate office in Brand, supporting the Customs Amendment (2022 Harmonized System Changes) Bill 2021 and the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 on behalf of Labor. The purpose of the harmonised system changes bill is to amend the Customs Tariff Act to implement the outcomes of the World Customs Organization's sixth review of the harmonised commodity description and coding system, which I will call the 'harmonised system', which is scheduled to commence internationally on 1 January 2022.

The parliament is also considering at the same time the Customs Amendment (2022 Harmonised System Changes) Bill 2021, which seeks to amend the definition of 'tobacco products' in the Customs Act 1901. This second bill is required because the first bill provides that e-cigarettes and vapes will have their own classification code under the international harmonised system. Consequently, one of the oldest acts of this Australian parliament, the Customs Act 1901, must be amended to reflect this change, and the emergence of these new tobacco related and consumption products.

The amendments will ensure these products continue to be subject to the existing regulatory requirements such as tax and excise required of all tobacco products under the Customs Act. Labor will support both these bills but, in so doing, Labor has moved, through the member for Paterson, a second reading amendment because it is important to recognise that international trade will be crucial to Australia's post-COVID-19 economic recovery, and the government's inability to secure a variety of vaccine deals has left Australians dangerously vulnerable, particularly those in trade-exposed industries.

My comments today reflect principally on the Customs Tariff Amendment deal, which concerns the harmonised commodity description and coding system. The harmonised system allocates classifications and descriptions used to identify all tradeable goods. The World Customs Organization maintains this system, and WCO members, including Australia, review it on a five-yearly basis. The coding system changes to reflect emerging technologies and changing trade patterns, and also seeks to monitor trade in dangerous and lethal components or products. The system plays a very important role in helping to monitor goods that can be exploited to the detriment of their country of origin and the wider global community.

For those who are unaware—and I accept that may be many—the Customs Tariff Act provides an eight-digit classification with a six-digit international classification, supplemented by two digits for domestic purposes. These additional two digits are made use of by the Australian Bureau of Statistics for their very important analysis of trade. I note that tonight is census night, which the ABS is running, and I encourage everyone to participate. Of course, it's our obligation as citizens to participate, and I know everybody will. It's a very important night for the ABS and an important night for Australia, and it's important that everyone is counted.

I will go back to the harmonised system. Especially as the world changes and technology advances, so too does the classification of the goods we trade. Codes for new goods are added, some goods are reclassified and other goods codes drop off the list. For example: typewriters were once on this list and now, since the fifth review that the WCO carried out some five or six years ago, they are not. They can still be traded, but it will be done under a different code, a broader code.

Examples of the changes to the codes in the harmonised system that reflect changing patterns of consumption and trade around the world include new coding for edible insects, which are evidently becoming increasingly popular on international menus. I have to admit I've yet to see edible insects on the specials lists in the local restaurants here in Rockingham, but that is not to say that that day will not come! The harmonised system will now contain coding related to yoghurt containing added spices, coffee or coffee extracts, plants, parts of plants, cereals or baker's ware. Although I've not tried yoghurt with coffee, there are many yoghurt products on our supermarket shelves containing cereals or parts of plants and they will now have their separate coding.

We have all seen the rapid expansion of broccolini across the menus of Australia and this trend is evidently global, as the harmonised system has expanded the relevant coding subheading to ensure that all varieties of broccoli are grouped together. This is a sensible reform which now sees cauliflower grouped with broccoli, bringing all the products of the Brassicaceae family together under the one code in the international trading system.

A new code has emerged to reflect the increasing volume of trade in truffles and certain varieties of mushrooms. Many will be aware of the high value of truffles, which is an indication of the challenges of harvesting them but also of their absolute deliciousness. The Australian Truffle Growers Association estimate that in 2020 Australia truffieres produced over 20,000 kilograms of truffles. They are produced in New South Wales, the ACT, Victoria, Tasmania and, of course, south-west Western Australia. Indeed, Manjimup in Western Australia accounts for 80 per cent of Australia's truffle production and is the largest producer of black truffles in the Southern Hemisphere. They are widely sought around the world, challenging the famous French black truffles. Earlier this year Manjimup hosted the 10th Truffle Kerfuffle, which is a festival celebrating all things truffle and other delights of the south-west of WA. It is held at the height of truffle season in June, which is an absolutely beautiful time to be here in the south-west of Western Australia. Ninety per cent of Western Australia's truffles are destined for export, and now this highly desirable product has its own code under the harmonised system.

Other products which have been given a separate code because they are increasingly present in international trade include 3D printers, smartphones and electric vehicles and hybrid vehicles. All are products that had not warranted such a classification under a previous review of the system. Surprisingly, solar water heaters, which many Australians have had on their rooftops for many years, have only now been coded separately, indicating the increased trade in these products globally.

What of the products that have declined? Like the typewriter that was the subject of the previous World Customs Organization review, answering machines are no longer much traded. In the mid-1990s, whole songs were written about the messages to leave on an answering machine. The De La Soul classic 'Ring Ring Ring' has little resonance today, but in 1991 this tune about an answering machine message was an absolute phenomenon. Like most pop phenomena, it became increasingly irritating the longer it went on. Now, like the album of 1991, De La Soul is dead. We may well say the answering machine is dead.

Also falling off a specific coding list to the more general codes are springs, including hairsprings used for clock and watch parts. Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and world globes, are no longer separately identified as they are no longer traded in sufficient volumes. I know of a map shop that once had a sign declaring 'globes make good gifts'—evidently not so much anymore. Instead of world globes and the atlas that used to sit on the bookshelf of most homes we now tend to look to Google Earth or similar products. Consumer demands change, and international trade changes along with them. However, in saying that, I will note that the member for Paterson revealed to me today that, in fact, the last two things she purchased were a world globe and a map of the world to put on her office wall. So some things do remain the same!

Importantly the harmonised system is used in the monitoring of trade patterns to help conservation efforts. For example, in this review, the potential impact of the overexploitation of the African cherry tree in the wild because of the growing use of its bark by the international pharmaceutical industry will be monitored by the application of a dedicated code for this product. Many would be unaware that these new codes will help facilitate the monitoring and control of substances restrained under the chemical weapons convention and goods required for the production and use of improvised explosive devices.

Adjustment of the harmonised system also monitors substances that deplete the ozone layer, controlled by virtue of the Kigali amendments to the Montreal Protocol. The Montreal Protocol was an excellent example of the world working together on a massive environmental problem of human creation, and it should be pleasing for all that care for the environment to see international trading systems working and adapting to ensure trade in the ozone-depleting chemicals is actively monitored. As you can see from these examples, the harmonised system works to do much in international trade, including monitoring substances that endanger lives and the environment.

International trade is demonised in some activist circles to the extent that issues raised are sometimes not credible, are sometimes entirely unbelievable and are sometimes regularly untrue. At the same time there are many legitimate concerns surrounding the international trading system raised sensibly by thoughtful individuals and groups. It is important these concerns are addressed by governments and the international trade policy community. Equally I believe it is important that we recognise the good work done in the global interest by institutions, such as the World Customs Organization and all the nation states, including Australia, that are actively involved in those negotiations.

The coded harmonised system is an important and wholly undervalued tool in the global effort to curb the development of chemical weapons and improvised explosive devices and the re-emergence of products that endanger the ozone layer, and these are just three examples. There are more, as an examination of the explanatory memorandum associated with this bill will reveal.

I'd like to take this chance to thank the member for Blair for encouraging us to take a deeper dive into the harmonised system, enabling me to share this new knowledge of mine with the parliament today. To conclude I will say that Labor will support the changes proposed in the bills to appropriately adjust the harmonised system of commodity coding that enables international trade and so much more. I commend the bills to the House, and I commend the second reading amendment.

Vince Connelly (Stirling, Liberal Party) Share this | Link to this | Hansard source

One-in-five jobs in Australia rely on trade. We have for a very long time been a trading nation. That's why it's so important that we keep pace with changes as they occur, and that's where this bill, the Customs Amendment (2022 Harmonized System Changes) Bill 2021, and the related bill kick in.

We've had some very interesting contributions so far touching on the importance of trade and of Australian businesses, and I note the member for Brand's comments about truffles. My wife also is a massive fan and will be delighted to hear that we're making it easier for those wonderful Manjimup truffles to be enjoyed right around the world. There was also an interesting contribution on broccolini. It's an amazing growth product, very good for your health and probably balanced out well with a bit of truffle oil on the side.

I'm really pleased today to make a contribution to this debate and to highlight the importance of this bill. The purpose of the customs tariff amendment bill is to update Australia's tariff codes, in the Customs Tariff Act, to be consistent with the updated international 2022 harmonised system. The harmonised system is the common name for the Harmonized Commodity Description and Coding System that is set to commence next January. The system is updated on a five-yearly basis to reflect the changing trade pattern and emerging goods, and this update will ensure that tariff codes can keep pace with modern types of goods.

For example, there are changes to reflect the changing patterns of consumption. New classifications will be created for products with increasing or diversifying patterns of trade, and this includes edible insects. I did a bit of research. It turns out that First Nations Australians have been eating insects for tens of thousands of years. In fact, there are 60 native insects traditionally consumed by First Nations peoples. It is something the wider community is, largely, yet to tap into. Edible insects is a very promising industry and is flagged to help us feed the growing population in the face of climate change, disruptions to food production systems and the rise of the conscious consumer. A good source of protein, the likes of beetles, ants, bees, wasps, crickets, grasshoppers, moths, butterflies and even termites may be on our supermarket shelves sooner than we think.

According to the CSIRO, edible insects are the fastest growing alternative protein market in the world. It's expected that the global edible insects industry will reach a total value of $1.4 billion by 2023 and grow at 44 per cent annually by 2025. Normally, some insects try to eat us, but now the humans are biting back—I was pausing there for laughter but all I got was crickets! Not to worry, I'll put in some canned laughter on Facebook.

Changes to reflect technological change are also captured in this bill, where new classifications will be created for new and emerging technologies. This includes things such as drones and 3D printers, and classifications will be removed from products that are no longer commonly traded. Speaking of drones, I recent visited a facility in my electorate run by a company called Orbital UAV. They make the engines that go into tactical unmanned aerial vehicles, UAVs. There is a booming—I might say, skyrocketing!—industry for UAVs right around the world and it's wonderful to see local Australian businesses tapping into that export market.

These guys at Orbital UAV, at Balcatta, manufacture the propulsion systems and flight-critical components of military drones. The drones are used for intelligence, surveillance and reconnaissance in military operations and for other geospatial services. Orbital UAV has secured contracts with defence primes, and, with the UAV export market increasing, these updates will make it easier for businesses like this to get access to the goods they require to meet the challenges of a changing world.

Finally, there are also changes to improve the monitoring of goods. New classifications will be created to improve the monitoring of goods like e-waste, which is electronic waste, and chemicals. Australians are among the highest users of technology, and e-waste is one of the fastest growing types of waste. Millions of electronic devices, like televisions, computers and mobile phones, are discarded in Australia every year. This can cause significant environmental problems due to the toxic chemicals present in some of these devices, including lead, mercury and arsenic, which can pollute our soil and water and disrupt our ecosystems and, indeed, even our health. This bill will make sure that rules around the importation of these types of goods are tightened.

As a rule, changes implemented to our tariff code must 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 goods under their new classification. Three categories of goods cannot be updated on a duty rate neutral basis, and that includes flat panel displays, semiconductor based transducers and electronic waste and scrap. The Morrison government 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 classifications, which means it's impossible to maintain all of the different duty rates. Rest assured duty rates for these three categories will be set as free to make sure that no importers are worse off.

As part of this system, we will also see a new classification of tobacco products intended for inhalation without combustion—that is, the products used in e-cigarettes. Changes will ensure this classification falls within the scope of existing border measures for tobacco products, meaning importers will continue to pay duty on these goods at the border like all other tobacco products.

All of these changes are going to help Australian businesses. Ensuring Australia's tariff codes reflect the most up-to-date version of the harmonised system will make it easier for our importers and exporters to trade with other countries. In this day and age, this could hardly be more important. Indeed, unfair and unwarranted tariffs imposed by China on Australian businesses have seen multimillion-dollar industries like the western rock lobster, wine and others being heavily impacted, and our farmers who usually export the bulk of their produce to China have also been hard hit. So we need to ensure that we are open to trading with other countries where our volumes of trade may traditionally not be as high. The Morrison government is absolutely committed to supporting just that: diversification of trade. Earlier this year we saw the Prime Minister establish, for example, the free trade agreement with the UK, increasing trade in goods and services, two-way investment, economic growth and job creation.

The sooner the amending legislation is introduced into parliament, the sooner Australian businesses can begin preparing for the new version of the harmonised system. In many ways, our world is greatly changing, and this bill will help us to keep pace with the changes that relate to the way we trade. It will also help Australian businesses to both import and export as we create the best future we can for all Australians.

Andrew Wallace (Fisher, Liberal Party) Share this | Link to this | Hansard source

I rise in support of the changes to the Customs Tariff Act in the Customs Amendment (2022 Harmonized System Changes) Bill 2021 and the related bill. I want to acknowledge all those previous speakers who have spoken on such an important bill. It's not very often that you get to speak on bills like this in this place, but today is one of those days, and I'm very, very pleased to be able to speak on it.

Australia is a trading nation. It relies on its ability to trade with the world. It was once said of Australia that we relied on the back of the sheep. Thankfully we have diversified much of our income to minerals, education and all sorts of things which we trade with the rest of the world. The minister for agriculture often stands up in this place and talks about how in Australia we create five times the amount of food and fibre that we consume. So we need to be able to trade that with the world, and that is a part of our ongoing ability to be able to maintain our standard of living. In order for us to be able to do this, there are certain rules that we need to comply with—the WTO, for example. We're a proud member of the WTO, and we, as Australians, pride ourselves on being a part of the rules-based order. That's important not just when it comes to security but also when it comes to trade.

We see our relationship with China at the moment as an example. China has banned or put restrictions on some Australian goods, such as wine, beef, barley and some coal products. Those are decisions that have been made outside the international rules-based order, outside agreements—fundamental agreements—that we have made as members of the WTO. That is to the eternal shame of the Chinese Communist Party, and it's something that we should continue to fight on behalf of Australians, Australian businesses, Australian growers and Australian manufacturers so that China change their view on this and start observing the international rules-based order in how they deal with countries like Australia, because, as the Prime Minister often says, we will continue to stand up for Australia and Australians' interests, even if that means upsetting some of our international friends and other countries as well. We will continue to stand up for Australian interests, and certainly I will play my part in doing that.

Talking about WTO, trade and tariffs leads me to this bill. The purpose of the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 is to update Australia's tariff codes in the Customs Tariff Act to be consistent with the updated international 2022 harmonised system. The 2022 harmonised system is the common name for the harmonised commodity description and coding system. Mr Deputy Speaker, I know that you are absolutely fascinated by this subject and that you are absolutely on board with it, as most members are. But you'll be keen to know that these new provisions will commence on 1 January next year, in 2022. The World Customs Organization updates the international harmonised system on a five-yearly basis—not four years, not six years; five years—to reflect changing trade patterns and emerging goods. All World Customs Organization members, which includes Australia, need to implement the 2022 harmonised system in their domestic tariff codes once again by 1 January 2022. The 2022 harmonised system update will ensure that international tariff codes can keep pace with modern types of goods and changing trade patterns. There are changes to reflect technological change. For example, new classifications will be created for new and emerging products, such as drones and 3D printers. There are classifications for products that nobody wants to buy anymore, such as world globes and answering machines. Mr Deputy Speaker, you would not want to be in a business right now where you're trying to buy and sell world globes and answering machines, would you?

Honourable Member:

An honourable member interjecting—

And facsimiles—thank you to the member for Leichhardt. You just wouldn't want to be in that sort of business right now.

However, there will be new classifications created for products with increasing or diversifying patterns of trade—not that I would want to be in this sort of business, but edible insects, for example, are the 'in' thing! There will be changes in relation to those things. Other certain electronic components will also see new classifications because of increasing patterns of consumption. I don't know why anybody would want to eat edible insects, but I guess that's a matter for them!

There will also be new classifications created to improve the monitoring of goods such as e-waste, and chemicals and substances controlled under international conventions such as the chemical weapons convention and the Montreal Protocol on Substances that Deplete the Ozone Layer. We all remember that chlorofluorocarbons used to be in fly spray and all the aerosols. Australia banned those, with good reason, because they deplete ozone.

As a rule, changes Australia implements to its tariff code are required to be consistent with the updated harmonised system on a duty rate neutral basis—that is, whatever duty rate applies to goods under the old classification will continue to apply to the good under its 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; semiconductor based transistors; and electronic waste and scrap. 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's not possible to maintain all the different duty rates that may have 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.

To be a little controversial—I'm never one to turn away from being a little controversial!—I want to turn to the changes to tobacco products. To any kids that might be listening to this: if you're smoking, tobacco is not good for you. Don't smoke, kids. If you're in the car, you shouldn't be smoking in the car. If you're a parent with kids in the back, you shouldn't be smoking with kids in the back. If you're an adult and you want to smoke: I'd love to be able to say you should just go ahead and do it, but you're not only impacting on your own health and your family's health; you're impacting on the public purse, because chances are you're going to get sick before you should get sick, and the public is going to have to look after you when you go into hospital. If you're smoking right now, put it out and quit smoking. You will be all the better for it.

However, I digress. The changes to tobacco products as part of the 2022 harmonised system will create a new classification for tobacco products intended for inhalation without combustion. These are the new fandangled e-cigarettes for vaping. I don't know too much about vaping; I will probably get lots of emails about vaping now because I've said that! What I do know is that they are full of chemicals. I've heard the argument before that vaping turns people away from cigarettes; I don't know if that's true or not. But breathing in chemicals can't be good for you, can it? It just can't be good for you. If you are smoking cigarettes or vaping, put it aside; it's probably not good for you. But if you are going to continue to vape, these goods are currently classified as 'other tobacco' and have an excise equivalent customs duty of $1,576.50 per kilogram of tobacco content applied. We need to amend the Customs Act to ensure that 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 for all other tobacco products, so there is no new risk to the revenue, because that's all-important. We also need to amend the Customs Tariff Act to ensure that the excise-equivalent customs duty rates applied to these goods is indexed twice a year, like other tobacco.

Mr Deputy Speaker Vasta, I know you are on the edge of your seat right now, but I want to conclude by saying that these changes will help Australian businesses. Australian businesses, both importers and exporters, are expecting these changes to be implemented by 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 our exporters to trade with other countries—and, as I said at the opening of my speech, that is a very important thing. We have to be able to trade with the world. These sorts of technical bills, whilst as boring as they possibly can be, are very, very important not just for our businesses but also for our country's revenue. The sooner the amending legislation is introduced into parliament, the sooner businesses can begin preparing for the new version of the harmonised system.

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. I know, Mr Deputy Speaker Vasta, you're wondering what changes we were able to secure, and that's a very good question. These priority outcomes included securing our preferred definition of virgin olive oil, a single classification code for placebos and clinical trial kits, our preferred classification for LED lighting products and a separate classification for synthetic diamonds.

The harmonised system has 97 chapters—almost as long as this speech!—split into headings and subheadings. Each heading and subheading has a unique code and description which can be used to classify all tradeable goods. These codes and descriptions are agreed by all 198 members of the World Customs Organization, including Australia. Australia independently determines the customs duties that apply to goods traded into Australia. We use the structure provided by the harmonised system, supplemented by domestic subheadings, to identify those goods that are subject to Australian customs duties. I am of a mind to ask for an extension of time, but I think I'll leave it there!

Keith Pitt (Hinkler, National Party, Minister for Resources, Water and Northern Australia) Share this | Link to this | Hansard source

The Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 and the Customs Amendment (2022 Harmonized System Changes) Bill 2021 will amend the Customs Tariff Act 1995 and the Customs Act 1901, respectively. Together these two bills will implement the changes agreed to in the sixth review of the Harmonized Commodity Description and Coding System, the harmonised system. The measures in the tariff amendment bill will ensure that Australia's customs tariff, which is based on the harmonised system, reflects the changing patterns of international trade, the emergence of new technologies and the international will to regulate certain goods of concern.

The World Customs Organization developed the harmonised system to strengthen and support trade between countries with different trade regulatory arrangements. Australia is one of more than 200 countries and economies that use the harmonised system. The harmonised system is of critical importance to Australian traders and industry. Ensuring that Australia's tariff is consistent with the international harmonised system used by our trading partners is an important part of the government's support for our importers and exporters.

The customs amendment bill is consequential to the amendments that we made to the Customs Tariff Act 1995 by the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021. One of the amendments made by the tariff amendment bill creates a new tariff subheading for products such as e-cigarettes. Consequentially, the definition of tobacco products in the Customs Act 1901 needs to be amended to ensure that e-cigarettes remain subject to the same treatment as other imported products that contain tobacco. The customs amendment bill will amendment this definition. Can I thank members for their contribution to the debate, particularly the member for Fisher, and commend the Customs Amendment (2022 Harmonized System Changes) Bill 2021 and the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 to the House.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Order! The original question was that this bill be now read a second time. To this the honourable member for Paterson has moved as an amendment 'That all words after "That" be omitted with a view to substituting other words'. The immediate question is that the amendment be disagreed to. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until the discussion of the matter of public importance.

Debate adjourned.