Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Customs Tariff Amendment (Incorporation of Proposals) Bill 2006 contains amendments to the Customs Tariff Act 1995 that were included in Customs Tariff Proposal No. 4 of 2005 and Customs Tariff Proposal No. 1 of 2006.

Firstly, the bill will alter item 47 of schedule 4 to the Customs Tariff Act by reducing the rate of customs duty from three per cent to free for goods entered under this item. Item 47 applies to machinery that incorporates, or is imported with, other goods which for technical reasons render the machinery ineligible for a tariff concession order. Item 47 allows such goods to be dutiable at the same rate of customs duty that would apply if the goods were subject to a tariff concession order.

The lowering of the duty rate applying to goods entered under item 47 maintains consistency with the 2005-06 budget decision to remove the three per cent duty on business inputs that are subject to a tariff concession order.

This measure will be of particular benefit to the mining industry, which is the main importer of goods covered under item 47. It will reduce costs to Australian business by $2 million per annum. This is in addition to the approximately $300 million per annum already saved through the original budget decision to remove the three per cent duty on business inputs that are subject to a tariff concession order.

This measure took effect from 11 May 2005.

Secondly, the bill alters item 31 of schedule 4 to the Customs Tariff Act. This item allows for duty-free entry of certain aircraft parts, materials and test equipment for use in the manufacture, repair and maintenance of aircraft. The bill proposes to alter item 31 by extending duty-free entry to certain goods used in the modification of aircraft.

The extension of item 31 to include goods for use in the modification of aircraft will reduce costs to business and will provide a clear incentive to continue heavy maintenance work in Australia. This will strengthen the international competitiveness of Australia’s aviation and maintenance industries, and is consistent with the government’s policy to improve the international competitiveness of Australia’s aerospace and aviation industries.

The main beneficiaries of this measure will be domestic airline and defence contractors, as well as Australia’s vibrant general aviation aircraft manufacturing and modification industry. Many of the firms in this sector are located in regional Australia and this alteration to the Customs Tariff Act will provide a new certainty to underpin their competitiveness in the world market.

This measure was announced in the 2006-07 budget, and took effect from 1 July 2006.

Finally, the bill will alter item 71 of schedule 4 to the Customs Tariff Act by expanding the Enhanced Project By-law Scheme to include the duty-free entry of qualifying goods for the power supply and water supply industries.

Currently, item 71 underpins the Enhanced Project By-law Scheme offering tariff concessions to major projects in the mining, resource-processing, agriculture, food-processing, food-packaging, manufacturing and gas supply industries, for imported eligible goods that are not available from Australian production.

The inclusion of the power supply and water supply industries in the terms of item 71 will encourage investment, increase opportunities for Australian industry to participate in major projects, and lower business input costs.

The above amendment was also announced in the 2006-07 budget, and applies to goods imported and entered for home consumption on or after 1 July 2006.

Debate (on motion by Mr Crean) adjourned.