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Wednesday, 27 May 1987
Page: 3419


Mr MARTIN(3.47) —The Customs and Excise Legislation Amendment Bill and the Customs Tariff (Commonwealth Authorities) Amendment Bill seek to implement three of the measures announced by the Treasurer (Mr Keating) in the Government's May economic statement. I think that it is rather opportune that the Bills have come before the House today. What they seek to do is threefold. Firstly, they seek the payment of customs duty by Commonwealth authorities so they are not treated in any different fashion from any other group in the country; secondly, they seek the imposition of a $200 fee on application for a refund of customs duty; and, thirdly, they seek new arrangements to strengthen the diesel fuel duty rebate system. I propose to touch on each of those issues, and perhaps pick up a couple of points that have been made by speakers during the debate.

The proposal to require Commonwealth authorities to pay customs duty-this appears in clause 6 of the appropriate legislation-stems from the Government's acceptance of the recommendations of the Committee of Review on Government High Technology Purchasing Arrangements. It is most appropriate, once again, to reflect on the fact that the Government, in deciding to go down any particular track, does so in the full knowledge of the industry which is under consideration and through the full process of consultation. This Government prides itself on the fact that it adopts such consultative methods and talks with people who are involved-in this case, in the customs and excise area-and arrives at a particular determination after careful consideration.

The Committee concluded that the concession of duty free entry of imports granted to most Commonwealth agencies leads to economic distortions and promotes a loss of allocative efficiency for the whole economy. I think that that phrase is a very important one in our consideration of the Bill. I emphasise those words: It was found that it `leads to economic distortions and promotes a loss of allocative efficiency for the whole economy'. In three words, we are talking about efficiency and cost recovery. That is most important in terms of what this Government is all about. It demonstrates once again its bona fides, its economic capabilities and it clearly indicates that, as far as this Government is concerned, government authorities are to be subjected to the same sorts of pieces of legislation and requirements in terms of customs and excise as are ordinary importers.

The second part of this legislation concerns the $200 fee for refund applications and it is set out in clause 7. This clause has been included because the Australian Customs Service receives thousands of such applications yearly and many of these are time consuming and they involve a complicated assessment and examination of goods. Quite clearly, again, the twofold aim of the legislation, namely efficiency and cost recovery, is being addressed by the application of this $200 fee. Again, I point out that it has come about because of the concern that this Government has for ensuring that all sectors of the economy pay their way. It is a payment for service or a user pays principle, to some extent, and it is to be applauded.

The third part of the legislation sets out the changes to the diesel fuel rebate arrangements in Parts II and III of the Bill. Most of these matters were recommended in the efficiency scrutiny review. Again, there are the words `efficiency' and `review'. The Government is going down the track, as it has always, of conducting very complex reviews and extracting recommendations which will lead to efficiency within this area of government administration.

The Government has accepted the scrutiny conclusion that a greater onus should be placed on rebate claimants to substantiate their claims, and why not? Why should rebates be given willy nilly without any substantiation? We know that the Government has gone through the process of substantiation in a variety of areas in relation to taxation. Of course, this is all part of the Government's drive to improve the system and to make it a great deal fairer. Consistent with the requirement for persons to substantiate their claims, the Government will now require more information to be provided about claimants' operations and the methodology used to calculate eligible usage of diesel fuel. Again, we are stopping the rorts and we are endeavouring to ensure that there is a fairer allocation when people apply for these rebates.

Other important changes which have emanated from this diesel fuel rebate arrangement are threefold: First, there is a provision to permit a reduction in the amount of rebate claimed if satisfactory details are not produced; secondly, the averaging of the rate of rebate because of continual fluctuations in the duty rates as a result of import parity price changes, which is most important; and, thirdly, the introduction of an on the spot penalty system which provides, as an alternative to prosecution, a penalty of three times the amount of rebate wrongfully obtained. Looking at the whole question, efficiency and cost recovery are at the basis of these changes.

During the debate on these Bills some points were made about the need for this sort of legislation and why Commonwealth authorities should be subject to levies and excise recovery. Quite clearly, one of the spin-offs will be to encourage local producers. Hopefully, it will mean that the Commonwealth departments affected by this will swing into import replacement and change the purchasing policies which they have adopted over a number of years. I can think of a number of areas where this will be most important. Over the past few months I have been made aware of difficulties being faced in the electricity industry in New South Wales as a consequence of electronic components which have to be purchased and used, but which are not available in Australia. That is one example in relation to a State authority, but through electricity authorities and other Commonwealth Government authorities that purchase these sorts of materials one would hope that we will see an encouragement of import replacement policies and that a flourishing local industry will produce a lot of the material that is now purchased overseas. Because of the devaluation of the dollar, I believe that incentives have been provided for local industry to enter the import replacement area. It is now more attractive to bring in capital equipment to re-establish industry and we should take advantage of this. We should now continue along that track of import replacement and try to ensure that, in the case of Commonwealth purchases, statutory authorities and Commonwealth Government departments look very carefully at Australian made components for a variety of things which they need.

In his contribution to the debate the honourable member for Dawson (Mr Braithwaite) raised an issue with which I find myself in total agreement. I refer to a comment that he made in relation to consideration being given to public authorities paying their way in their obligations to local authorities. Prior to entering Parliament, some time ago I represented local government in the Wollongong area and it did not take me long to realise that substantial amounts of money were escaping local government through Commonwealth and State government entities. I refer to rates. There were Metropolitan Water Sewerage and Drainage Board properties, State Government buildings and so on scattered throughout the length and breadth of the city of Wollongong, but those properties could not be rated. A valuable source of funding which could be returned to local government did not exist. I support the comments made by the honourable member for Dawson on this matter, because I believe that they would go some way down the track towards offsetting some of the very difficult circumstances in which local governments find themselves in relation to obtaining enough rate revenue to do the things for which local governments are responsible. I refer to the old rates, rubbish and roads type of syndrome. There must be some redirection of funds back to that area.

As is the case with all measures that were announced by the Treasurer in the May economic statement, I find a great number of things that recommend this legislation. I believe that it will lead to import replacement by Australian industry. I hope that Commonwealth departments and statutory authorities will now look to local producers and, if they are not in Australia, perhaps some encouragement will be given to local producers to start up. I have given one example of where that might be possible. The whole question of efficiency and cost recovery has been addressed by this legislation. I commend the Treasurer and the Minister for Industry, Technology and Commerce (Senator Button) for taking this initiative.