Senate debates

Monday, 30 August 2021


Customs Tariff Amendment (Incorporation of Proposals) Bill 2021; Second Reading

12:24 pm

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | Hansard source

I must say it's pleasing to follow my friend from Queensland and to hear that the Labor Party, the other governing party of this country, is prepared to support this legislation and to do so as efficiently and quickly as possible, so I won't speak for too long. I want to make a few points. The first is that the Customs Tariff Amendment (Incorporation of Proposals) Bill 2021 amends the Customs Tariff Act 1995 to incorporate three proposals. Shortly I'll speak to each of them. The first is with respect to medical and hygiene products, the second is with respect to imported goods for the F-35A Lightning II Joint Strike Fighter program, and the third is with respect to certain motor vehicle components.

Firstly, in relation to medical and hygiene products, as Senator Watt mentioned, the specific ambit of this proposal is to capture those medical and hygiene products which have a role to play in combatting the COVID-19 virus. Putting to one side Senator Watt's somewhat gratuitous comments with respect to the federal government, I would commend all the Australian companies within our borders that have been manufacturing those products. They've been doing a sterling job in ensuring that we have the sovereign capacity to manufacture those products which are needed by the Australian people. Having said that, it is important that we remove the customs duty with respect to the products which need to be imported. It should be noted that there will be $3.8 million of costs incurred in the budget over the estimates period in relation to this measure, but I certainly would have thought that it's clearly to the benefit of the Australian community for those costs to be borne and for those medical and hygiene products to be imported free of customs duty and used by the Australian people.

Secondly, for one moment I want to touch on how significant the MOU is that was entered into with respect to the Joint Strike Fighter program. This is an MOU that was entered into by the Australian, Canadian, Danish, Italian, Norwegian, British, US and Turkey governments in relation to the Joint Strike Fighter. It's an extraordinary achievement for those nations to enter into that agreement. I want to read some of the recitals from that MOU to underline the importance of this agreement, because there may be an amendment coming from some in this chamber on this issue. The first is:

Recognizing the benefits to be obtained from international cooperation regarding standardization, rationalization, and interoperability of military equipments ...

The second is:

Desiring to cooperate in the production, sustainment, and follow-on development of the Joint Strike Fighter ...

The third is:

Recognizing the benefits of continued cooperation in the JSF Program ...

The fourth is:

Seeking to establish a model for international cooperative acquisition programs ...

That underlines the significance of this MOU: 'Seeking to establish a model for international cooperative acquisition programs'.

The fifth is:

Affirming their intent to use their best efforts to ensure that international cooperation under this ... MOU will maximize benefits ... that will accrue to each of them ...

That includes the Australian people and the Australian government with respect to manufacturing within the country. The sixth is:

Seeking to establish a robust vehicle of cooperation that will span the life cycle of the JSF Air System ...

The seventh is:

Recognizing the importance of technological and industrial cooperation to the national security of all Participants ...

And the eighth is:

Recognizing that industrial participation will be an important parameter in the Participants' various national decision-making processes ...

You can see the significance of the MOU that was entered into in relation to the Joint Strike Fighter program. It is extraordinarily significant. Nine countries are engaging in international cooperation with respect to a major military procurement project. It's an extraordinary MOU and an extraordinary precedent, which is extremely important.

In the second part of the bill, providing that the custom duties will be free with respect to the Joint Strike Fighter program—and I'll speak about that in a moment—gives effect to the obligations that this country has entered into under the MOU. Australia actually has obligations under the MOU in this regard. We already have those obligations under that international agreement which has been entered into by this country, and everyone in this chamber should recognise those obligations which have been entered into under that agreement.

I want to talk about section 16 of the MOU, the agreement which has been entered into by the Australian government. Section 16.1 provides:

Customs duties, import and export taxes, and similar charges will be administered in accordance with each Participant's respective laws and regulations.

So it is recognised on the face of the MOU that our customs duties will be governed by Australian laws—Australian customs governed by Australian laws, and that's as it should be. Second, it says:

Insofar as existing national laws and regulations permit, the Participants will endeavor to ensure that such readily identifiable duties, taxes and similar charges, as well as quantitative or other restrictions on imports and exports, are not imposed in connection with work carried out under this MOU …

That's the obligation in the MOU which has been entered into by the Australian government. It requires the Australian government to actually go through the process, which has now been gone through, with respect to the Joint Strike Fighter Program, so we're actually meeting our obligation.

It should also be recognised that, if this legislation were not passed for any reason—and that obviously isn't going to occur given the opposition is supporting the government in relation to this legislation—that wouldn't change the situation; the Australian government would still have to bear the cost of the duties, because there's another clause under section 16 which provides that, in the event this legislation were not passed, that cost would simply be added to the costs Australia has to bear under the Joint Strike Fighter program. Some may wish to vote against this bill, and we'll wait and see if they do, but, under section 16 of the MOU, even if they did, it wouldn't change the economic result at all. Australia would still have to bear the cost, which has been estimated to be in the order of $6.7 million. Australia would still have to bear its share in relation to that customs duty. So, even if those who are thinking of voting against this bill were to do so, it wouldn't really change the economic consequence, which I again stress has been entered into by the Australian government.

The third section of this bill deals with the motor vehicle industry and componentry industry with respect to goods imported in pursuit of the Automotive Transformation Scheme. In that respect, I fully support all of the government's measures; I'm passionate about all of the government's measures with respect to enhancing manufacturing in Australia and my home state of Queensland. Senator Stoker, who's in the chamber at the moment, would know there are great companies in Queensland doing wonderful things in the manufacturing space, and that's absolutely important for our Australian manufacturing sovereign capacity. With that, I commend the bill to the chamber.


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