David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Hansard source

Today we debate the Customs Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015 and the Customs Tariff Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015, which are intended to cut tariffs on imports from China, in line with the promises made in the China-Australia Free Trade Agreement. I support these bills, but, with the conclusion of this free trade agreement, as well as the Trans-Pacific Partnership, the key trade issue before us now is: what should we do next?

I believe that we should abolish our tariffs on imports from all countries. I believe this because free trade is fair trade. It is fair because of what the abolition of our tariffs would do for everyday Australians. There is a lot of talk about how the GST is regressive, but tariffs are far more regressive than the GST. Tariffs are imposed on products that everyday Australians use, like pasta, towels and umbrellas. But, unlike the GST, tariffs apply only to goods and not to services. Compared to rich people, poor people spend more of their money on goods rather than on services. So, even more than the GST, tariffs hit poor people harder than rich people.

Free trade is fair trade. It is fair because of what the abolition of our tariffs would do for poor people overseas. Because of our tariffs, poor people in both developed and developing countries sell less of their product into Australia. By abolishing tariffs, they will sell more to us. This will boost our living standards a little, and it will improve the living standards of the world's poor a lot. It will also be a sustainable boost, based not on aid and dependency, but on usefulness and self-worth.

Unlike the coalition, the Liberal Democrats have specific plans and the guts to make wide-ranging cuts to government spending. So, unlike the coalition, the Liberal Democrats have the credentials to make wide-ranging tax cuts. The Liberal Democrats would abolish all of our tariffs, which amounts to a tax cut, and we would fund this by reducing government spending. But even without spending cuts, the coalition could abolish tariffs responsibly by concurrently extending the GST to include fresh food, while still having revenue left over to provide income tax cuts. This would represent an improvement in the fairness and efficiency of the tax system.

Our tariffs are a make-work exercise for customs officials. We apply tariffs on almonds but not on walnuts, on maple syrup but not on golden syrup, and on biscuits but not crispbread. There is a tariff on guitars and drums, but not on violins and pianos; on calendars but not on diaries; and on granite and sandstone if it is in blocks, but not if it is roughly trimmed. And there is a tariff on flat steel if it is coated with zinc, but not if it is coated with tin.

The coalition wants to retain our tariffs on products imported from overseas as long as other countries impose tariffs on products they import from us. This is akin to shooting yourself in the foot as long as the bloke next door also shoots himself in the foot. The Liberal Democrats are the only free trade party in this parliament, and only Liberal Democrats stand for true tax reform in this country.