George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Hansard source

The Customs Tariff Amendment Bill (No. 1) 2010 amends the Customs Tariff Act 1995 to incorporate end dates for three concessional items in schedule 4, which deals with concessional rates of duties. The bill contains three amendments to the Customs Tariff Act 1995, two of which relate to import concessions for the textile, clothing and footwear industry and the third of which provides a mechanism to reduce the general rate of duty for certain goods not of a kind used as components in passenger vehicles.

Item 53C of schedule 4 of the Customs Act 1995 provides a mechanism to reduce the rate of customs duty from 10 per cent to five per cent for certain goods entering Australia on or after 1 January 2005. These goods are non-passenger motor vehicle goods that are classified to the same tariff classifications as passenger motor vehicle parts and components. The rate of customs duty applicable to passenger motor vehicle parts and components was 10 per cent. On 1 January 2010 the rate of customs duty on passenger motor vehicle parts and components fell to five per cent, making item 53C of schedule 4 redundant from that date.

As the proposed amendment to the Customs Act 1995 will insert an end date of 31 December 2009 and hence have a retrospective commencement, the Senate Standing Committee for the Scrutiny of Bills examined the proposed amendment and made the following comments in relation to it. The committee said in respect of the retrospective commencement of clause 2, item 2 and schedule 1, item 1:

As a matter of practice, the Committee draws attention to any bill that seeks to have retrospective impact and will comment adversely where such a bill has a detrimental effect on people.

These items relate to the commencement and completion dates of a mechanism in item 53C in Part III of Schedule 4 to the Customs Tariff Act 1995 to reduce the general rate of customs duty from 10% to 5% for certain goods for home consumption. They initially appear to have a retrospective effect because Clause 2, item 2 provides that the commencement date of Schedule 1, item 1 is 14 December 2009 and Schedule 1, item 1 provides for a commencement date of the mechanism of 1 January 2005 and a completion date of 31 December 2009. However, there is no detrimental result because this is essentially a technical amendment giving effect to Customs Notice (No. 3) 2009 published in Special Commonwealth Gazette S213 of 14 December 2009. In addition, the Committee notes from the Explanatory Memorandum that the general rate of the relevant customs duty fell to 5% from 1 January 2010 …

Thus the Senate committee opined.

In relation to the Clothing and Household Textile (Building Innovative Capability) Scheme, on 12 May 2009 the government introduced a retargeted textile, clothing and footwear assistance package from 2009-10 to 2015-16. Under the package, the Clothing and Household Textile (Building Innovative Capability) Scheme would replace the textile, clothing and footwear package post 2005 scheme from the scheme’s 2010-2011 program year. The new package redirected $55 million towards innovation, mainly to the clothing and household textile sectors, with $25 million in additional funding. The package also included a new Textile, Clothing and Footwear Strategic Capability Program to support innovative capability in the textile, clothing and footwear industries. As recommended in the review of the textile, clothing and footwear industry by Professor Roy Green, Building Innovative Capability, the new package would be partially funded by discontinuing the Textile, Clothing and Footwear Product Diversification Scheme and not proceeding with the textile, clothing and footwear supply chain opportunities program. The product diversification scheme applied to the clothing and finished textile sectors and was legislated to continue until 30 June 2017.

The principal legislation implementing the new textile, clothing and footwear assistance package, the Textile, Clothing and Footwear Strategic Investment Program Amendment (Building Innovative Capability) Bill 2010, was passed by the Senate on 18 March 2010 with two amendments which were agreed to by the House of Representatives on 18 March 2010. The Textile, Clothing and Footwear Expanded Overseas Assembly Provision Scheme commenced on 9 June 1999 and provides assistance through duty concessions to firms that assemble footwear and clothing overseas from predominantly Australian made fabric and leather and then import them back into the Australian market. Since the scheme began the duty or revenue forgone has totalled $40 million, with annual duty forgone of approximately $3 million.

The scheme was scheduled to expire in 2005. It was extended under the Textile, Clothing and Footwear Post-2005 Assistance Package, announced by the Howard government in November 2003. However, there has been only limited use of the EOAP in recent years, as textile, clothing and footwear tariffs have fallen, and the scheme is scheduled to conclude on 30 June 2010. In his review of the textile, clothing and footwear industry, Professor Green gave the following assessment of the scheme:

It has generated a pull-through of Australian-made fabric and leather for firms assembling clothing and footwear offshore and bringing them back for domestic consumption. However, because of the reducing rate of tariffs for the finished product, the value of the scheme is declining.

That is from 1 January 2010. Two different tariff rates apply across a range of textile, clothing and footwear goods: a 10 per cent tariff for clothing and for certain finished and household textiles, these making up the bulk of textile, clothing and footwear imports, and five per cent for cotton sheeting, woven fabrics, sleeping bags, table linen, tea towels, carpets, footwear, textile yarns, sewing threads and finished leather. For all of those reasons, the opposition supports the bill.