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

I rise in support of the Customs Tariff Amendment (Incorporation of Proposal and Other Measures) Bill 2017. The bill makes some substantive changes, like extending some tariff concessions for providers of automotive services and removing a $12,000 duty on imports of second-hand cars. Removing this $12,000 duty is welcome, but unfortunately it is of little effect in practice because the government still severely restricts the quantity of second-hand cars that are allowed to be imported. Denying Australians second-hand cars to protect retailers of new cars would be laughable if it were not so contemptuous of ordinary Australians who would like to choose something different and so suggestive of cronyism.

This bill also makes some housekeeping changes to Australia's complex schedule of tariffs. The schedule categorises hundreds of different products, from almonds to Xylol. The schedule sets out for each product whether it is hit with a five per cent tariff, a four per cent tariff, a three per cent tariff et cetera. Because this schedule is so complicated, there is a need for regular housekeeping. The bill removes some subheadings that, according to complaints from industry, are particularly cumbersome. It also sets the tariff rate for mosaic tiles at zero per cent, because the bureaucrats mistakenly set the tariff at five per cent the last time there was a housekeeping bill. This is all quite absurd.

Rather than fiddle on a regular basis with the complicated tariff schedule, we should abolish these nuisance tariffs. The Liberal Democrats have a fully-costed policy to do just that. If implemented, it would make stuff cheaper for Australians. It would also mean that Australian businesses would concentrate on making those products where we are the best in the world, rather than devote the resources to making products that are made cheaper and better overseas. This would be the best recipe for higher profits and higher wages and would avoid the need to prop up unviable businesses through protectionist tariffs.

Some economists do not support completely abolishing tariffs, because they theorise that the first million dollars of tax revenue collected from tariffs does less harm than an extra million dollars extracted from taxpayers as income tax. This theory would suggest that you should keep tariffs rather than put more weight on the income tax system. But what this theory does not consider is that, when a tax a completely abolished, all the compliance and administrative costs associated with that tax disappear. If we abolished our remaining nuisance tariffs, we would not need to have hundreds of Customs officials hovering over a shipment of mosaic tiles with their clipboards and tablets, and we would not have businesses pulling out their hair as they work out whether the tiles they are importing are classified as mosaic tiles or not.

I support the Customs Tariff Amendment (Incorporation of Proposal and Other Measures) Bill, because its tinkering is in the right direction. But, under the Liberal Democrats, we would have no tariffs, we would have free trade, we would have a low cost of living and we would have productive businesses and high wages, and there would be no need for bills such as this.