Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

Australia's participation in world trade organisations is particularly important. Countries that trade together and engage in enterprise and commerce together are less likely to have disputes and are more likely to engage in amity and goodwill amongst countries. Australia is a willing and important middle power in that field and we have participated in many, many organisations internationally which have improved trade, commerce and intercourse between nations.

This legislation, the Customs Tariff Amendment (Expanded Information Technology Agreement Implementation and Other Measures) Bill 2016, is important. This legislation comes under the World Trade Organization's expanded Information Technology Agreement, as does the World Customs Organization fifth review of the International Convention on the Harmonized Commodity Description and Coding System, which we dealt with recently.

I will say at the start that Labor will support this legislation. Australia is a net importer of information technology and imports an estimated $18.9 billion worth of expanded Information Technology Agreement products every year. The bill will specifically amend the Customs Tariff Act to create new tariff subheadings to allow certain IT products to be separately identified, amend the customs duty rates for selected tariff subheadings so that they incrementally reduce to free and remove obsolete customs duty rates. This will reduce the size of the Customs Tariff Act.

In the 2016-17 budget, the government committed to reducing the customs duty rates for information technology products over time to free to be consistent with Australia's requirements under the World Trade Organization's expanded Information Technology Agreement. Those reductions will begin incrementally from January 2017. I must say the government has kept a fine line. It has just got this legislation in. It could have done it a bit earlier, but it has decided to bring it in at this late stage, and we will support it.

In certain circumstances, commitments were made to reduce the customs duty rate for particular goods within a classification while the customs duty rate for other goods within the classification will remain unchanged. This will require the creation of new tariff classifications to separately identify the subset of goods. The bill will reduce customs duty rates, with the amount and timing dependent on the particular category of items belonging to the particular group. It is expected this will benefit both businesses and individuals. It has an $80 million cost to the taxpayer, but we will support it anyway.

The Department of Industry, Innovation and Science and the Department of Foreign Affairs and Trade undertook consultation with affected industries, which identified potential domestic manufacturers and suppliers that would potentially require a longer time to adjust to reduced prices of competing imported products. This input from industry is reflected in the two categories—phase-in rates at F and G--which account for eight of the tariff subheadings and will reach free by 2020-21. The staged categories A through to E represent 106 tariff subheadings and will achieve free by two years earlier, by 2019, for items like printer ink circuits.

Some Australian items will be affected by these changes, including speakers and car components, but, overall, I am satisfied the bill will provide opportunities for Australian businesses in new markets. As I said earlier in this very short speech, that is particularly important. It will reduce documentation requirements for those businesses currently claiming preferential rates or tariff concessions. Just for the information of those who might be listening, in 2019, for example, arcade machines, sound amplifiers, staple machines and cards incorporating magnetic strips will go to free. In 2021, car speakers, time switches, battery clamps on cars and other components in cars will go to free. It is expected that all changes will be effected by the middle of 2021.

Labor supports the legislation. It is important for there to be certainty in business, certainty in commerce and certainty internationally, and that is why Labor supports this legislation. As I said, the government kept it fine. The timeline is pretty close, but we see that the reduction in tariffs will begin early next year. We will support the legislation.

See this speech in context