Wednesday, 17 February 2021
Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Bill 2020; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
The Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Bill 2020 makes important amendments to the Customs Tariff Act 1995 that will strengthen Australia's customs practice. The Bill will incorporate the Customs Tariff Proposals that provided concessional rates of customs duty for goods required to combat the COVID-19 pandemic. The Bill will also make a series of changes to further enhance the operation of the Customs Tariff Act and realign certain aspects of that Act with international practice.
Customs Tariff Proposal (No. 1) 2020 and Customs Tariff Proposal (No. 2) 2020, were tabled in parliament in May and August this year. The Proposals created temporary concessional items in Schedule 4 of the Customs Tariff Act that provide a Free rate of customs duty for medical supplies, such us face masks, soaps and eyewear, urgently required to combat the COVID-19 pandemic. Initially, the concessional item covered a 6-month period from 1 February to 31 July 2020. A review determined that the concession helped facilitate the import of crucial medical and hygiene goods and had been enthusiastically received by business and the public. As such, the Government extended the concession for a further 5 months until 31 December this year. The Bill confirms the application of those temporary concessions.
This Bill also makes a series of Customs Tariff Act changes that implement six measures designed to improve the functionality of the Act and bring it back into line with international practice.
The first of these measures introduces new tariff sub-headings for 'formulated caffeinated beverages', 'formulated supplementary foods' and 'formulated supplementary sports foods'. The new subheadings for these goods reference the definitions provided in the Australian New Zealand Food Standards Code. These subheadings will allow the identification and monitoring of the products as they cross the Australian border as part of the Imported Food Inspection Scheme. This will help ensure that these goods meet Australian standards and are safe for consumption by the public.
Measures 2, 3 and 4 realign the Customs Tariff Act with international tariff classification practices. The Customs Tariff Act incorporates the World Customs Organization's Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System. The Harmonized System is used by 183 countries and covers 98 per cent of global trade. The Harmonized System provides means for identifying a good as it moves from one country to another, ensuring that what Australia calls a 'tomato' is the same as what every other user of the Harmonized System calls a 'tomato'.
The fundamental principle of the Harmonized System is that all tradeable goods have one, and only one, classification. The structure of Harmonized System Headings, Section and Chapter notes and Interpretive Rules that have been incorporated into the Customs Tariff Act, determine a good's classification. The World Customs Organization periodically issues binding rulings on the classification of goods, where the classification is uncertain or disputed, and all countries, including Australia, are obliged to make every effort to adopt these rulings.
Measure 2 will introduce an Additional Note into the Customs Tariff Act stating that wheeled garbage bins, commonly referred to as 'wheelie bins', are not un-motorised vehicles of Chapter 87 of the Customs Tariff Act. This new Additional Note will restore the classification of wheelie bins to a classification that is consistent with international practice after a decision of the Administrative Appeals Tribunal held that wheelie bins be classified as un-motorised vehicles
Measure 3 introduces a series of Additional Notes that clarify the difference between vitamin products and other supplements which are medicaments with proven therapeutic and prophylactic benefits, and those intended to supplement a person's diet. This division is required by the Harmonized System. The distinction between these two classes of goods will be made through reference to Schedules 2, 3, 4 and 8 of the Poisons Standard which refer to Pharmacy Medicine, Pharmacist Only Medicine, Prescription Only Medicine and Controlled Drug respectively. The medicines listed in the Schedules of the Poisons Standard are the product of an objective and well established process undertaken by experts in this field. These amendments are required because domestic tribunal and court decisions have caused Australia's classification to become misaligned with international practice.
Measure 4 introduces a series of Additional Notes that clarify the distinction between goods which should be classified as specialised parts of another good and goods that should be classified as pieces of metal of various shapes. Again, these amendments are required because domestic tribunal and court decisions have caused Australia's classifications to become misaligned with international practice.
Measure 5 removes the $12,000 special customs duty on used and second-hand motor vehicles applied under the Peru-Australia Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Both of these agreements were negotiated using versions of Customs Tariff Act which predated the removal of the $12,000 special customs duty. The terms of both agreements required they be implemented as negotiated, meaning the $12,000 special customs duty had to be included in the enabling legislation. This measure unilaterally removes the $12,000 special customs duty applied to Peruvian and Trans-Pacific Partnership originating goods, bringing them in line with the rest of the Customs Tariff Act.
Lastly, measure 6 makes a number of technical amendments, which remove redundant provisions from Schedules 5 to 12, covering Australia's numerous free trade agreements. These redundant provisions are phasing rates that have been fully implemented, are no longer required in the text of the Act.