Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Labor supports this bill, which makes five changes to the Customs Tariff Act 1995. These changes are comparatively minor. They go to fixing a mistake the government made in the subheading in the act concerning mosaic tiles; aligning with international practices a subheading referring to herbicides containing an emetic; incorporating industry feedback on the classification of machining goods; an extension of concessional arrangements for importing automotive prototypes and components, as announced in the budget; and the removal of a $12,000 special customs duty on certain used motor vehicles. I intend to address most of my remarks to the sections of the bill relating to the automotive industry, but first I will deal with the other matters.

Australian businesses importing mosaic tiles in the size specified in the act will not have to pay a customs duty. That was the original intent, but the amendment to the act last year mistakenly applied a five per cent tariff. The bill fixes the drafting mistake and ends confusion in the industry.

The second matter relates to a particular widely used weedkiller, which will be now classified as duty free and accords with international practice.

The government has accepted industry advice on the classification of machine centres able to perform two or more operations with an automatic tool change. The industry feedback on that matter was also accepted by the government. This bill repeals the domestic subheadings and reclassifies machine centres under a new, simplified arrangement.

Other changes involve various oversights and mistakes. Of course, you would hope that, in this day and age, we could get these matters right the first time around. However, I don't remain particularly optimistic that'll be the case.

With regard to the automotive industry, there is a more substantive question. We have to, once again, point out that the government has made a dreadful error here in comparison to what we've seen in the other questions. This is not a minor question. The government's gross failure of responsibility and gross negligence—from the Acting Prime Minister at the time and the Treasurer, Mr Hockey—in goading the automotive industry to leave amounted to an act of economic vandalism. It was at a time when there was a committee inquiry under way which the government had asked the major manufacturers to participate in. They had, in fact, said that they were going to rely upon their deliberations. The government acted in such a way at a time when the investment committee of General Motors was actually reviewing their operations and looking very closely at the position of the new government in Australia. They clearly got a straight answer from this government, which sought to actually force General Motors out of Australia. The government goaded the vehicle industry manufacturers to leave the country.

The modelling by the University of Adelaide estimated that the shutdown in vehicle production will cost the Australian economy some $29 billion annually—a $29 billion effect upon our GDP. It's put at risk some 200,000 jobs. When we think about the cost it will have on our social fabric and on social security benefits, the effects it will have on our health budget and the social distress that the destruction of an industry of this importance will have, whatever support came through the various budget measures to sustain the industry in this country would pale in insignificance.

Of course, that's not to mention the fact that industry support in this country, in comparison to international standards, was very, very modest. By international standards, the cost of support to the automotive industry in this country was less than the price of a footy ticket per capita—less than the price of a footy ticket! The cost to this country now will be so much more, in terms of social security and social distress.

The government has never acknowledged the enormity of what it has done. Whether it's out of ignorance or shame, it's not clear. This is not just a minor administrative error. It is a matter of profound social consequence and ideological obsession that the neoliberals within the conservative forces in this country crusaded for a very long time to actually undermine the automotive industry in this country. Little did they understand just how significant that industry has been to the rest of manufacturing, in terms of the capacity to actually translate production processes throughout other elements of manufacturing. For instance, I was recently in the Arnott's biscuit factory in Western Sydney. It is a very advanced plant. What's the first thing they say to you? The production arrangements, the production techniques, the production processes in that biscuit factory come from the automotive industry. The techniques that have been developed in the automotive industry have contributed to many aspects of other industries in this country. That linkage will now be lost.

I am very concerned about the consequences of these decisions. I know that we in this country will come to realise the damage that has been done, as governments in England came to realise after the destruction under Thatcher. I predict that even the conservatives here, as they did in England, will come to realise that there will be a need to rethink the position that they've taken, and there will be a more bipartisan approach to preserving the capabilities of the automotive industry, especially in engineering and design, so that we can attract new investment and keep jobs in Australia. The recommendations of the Senate committee into the future of the automotive industry are a way of actually achieving those outcomes.

This bill's extension of the concessional arrangements for importing an automotive prototype and components can be seen as a step along that way. It's necessary because the original wording of the act refers to 'motor vehicle producers' under the Automotive Transformation Scheme. 'Motor vehicle producers' will of course become 'automotive service providers', so their classifications will now change. The bill provides that, under the classifications, they will be able to benefit from the extension of a concession that was first announced in the budget.

The bill's other provision that affects the automotive industry is the one that removes a $12,000 customs duty on used or second-hand vehicles imported from other countries. In fact, I believe I was actually responsible for the imposition of this duty when I was minister. This duty was there as a reserve power, so that the market couldn't be flooded with grey imports. In practice the duty was rarely used because other opportunities were taken to protect the Australian public from the importation of second-hand vehicles—which I believe is a very poor policy approach. A vehicle import approval issued by the Department of Infrastructure and Regional Development is one way that can be done. It is an offence to import a road vehicle into Australia without such a permit, and, because the duty is so rarely applied, Labor doesn't object to its removal.

But it is appropriate to sound a note of caution. The existing restrictions on the number of used vehicles that can be imported into this country are an important protection for consumers, a very, very important protection in terms of ensuring that we modernise the car fleet in this country, and, of course, a very, very important protection for the network of automotive dealerships in this country. Dealers are major providers of training and skills, particularly in rural communities. They are crucial to the future of the industry, which is in very substantial transition. I trust the government will continue to resist calls to make further changes to the importation of grey imports. I would urge the government not to inflict further damage on the industry above and beyond what they have already done.

David Leyonhjelm (NSW, Liberal Democratic Party) Share this | Link to 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.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

The government says in the common explanatory memorandum to these two bills that it seeks to harmonise the rates of tax on different tobacco products.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Hanson, we are on the Customs Tariff Amendment (Incorporation of Proposal and Other Measures) Bill.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

No comments; thank you.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I thank senators for their contributions and commend the bill to the Senate.

Question agreed to.

Bill read a second time.