Linda Reynolds (WA, Liberal Party, Assistant Minister for Home Affairs) Share this | Hansard source

Thank you very much for your question. This issue was raised again in this debate by the Greens senators. Revenue loss will occur under this agreement, but it will be very modest and very small in comparison to the benefits that will flow from these agreements. Reliance on custom duties has been, in the long term, in decline across the Pacific already. Kiribati abolished all of its ordinary customs duty on imports in 2014, while the Cook Islands and Niue apply tariffs on relatively few tariff lines. Most Pacific island countries generally have low tariffs and all Pacific island countries have been negotiating tariff reductions under their existing free trade agreements and with the WTO.

The Office of the Chief Trade Adviser estimated that, when PACER Plus tariff reductions are fully implemented, reductions in tariff revenue for most countries will equate to between one and three per cent of current government revenue. Australia will, of course, continue to assist Pacific island countries undertaking revenue reform through the Pacific Financial Technical Assistance Centre under the auspices of the International Monetary Fund. Target assistance is also available to Pacific island countries under the PACER Plus Readiness Package. Yes, there will be some very modest, one to three per cent, initial impacts in some nations, but the benefits that this arrangement will bring will far outweigh that. We are also providing many other opportunities to assist these nations as they move through that transition period.