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Thursday, 28 May 1987
Page: 3467


Mr MOORE(10.01) —The House is debating together the Customs Tariff Amendment Bill, the Excise Tariff Amendment Bill 1987 and the Customs (Valuation) Amendment Bill. The Opposition will be moving in relation to the Customs Tariff Amendment Bill a second reading amendment which will be circulated in my name. We will be opposing one clause in the Customs (Valuation) Amendment Bill 1987 in the Committee stage.

The main provisions of the Customs Tariff Amendment Bill 1987 are to bring about changes associated with the Government's policy for the manufacture of motor vehicles and changes to rates of customs duty applicable to certain refined petroleum products; to implement the Government's decisions on the Industries Assistance Commission report on the chemicals and plastics industries; to bring about various changes associated with the Government's policy for the manufacture of motor vehicles and changes to rates of customs duty applicable to certain refined petroleum products; to implement the Government's decisions on the Industries Assistance Commission report on the chemicals and plastics industries; to bring about various changes associated with the Government's decision on the post-1988 assistance arrangements for the textile, clothing and footwear industries and amendments made in the context of the current TCF sectoral policy; to implement the Government's decision on the IAC's report on the power electronics industry; and to implement the Government's decision on the IAC's recommendation on citrus fruit.

The Opposition notes the general move in the car industry plan and the gradual introduction by 1992 of a base quota of 57.5 per cent for all imported cars. On top of that, changes will be made to the excise in relation to petroleum products in line with changes to excise duty applicable to equivalent locally produced goods in this sector. The Government has also moved in the area of plastics. The IAC's major recommendations are that a maximum long term tariff rate of 15 per cent be implemented and phased in over a period of three to five years. The first reductions proposed by this Bill allow for general tariff rates above 25 per cent to fall to that level. Further, rates on certain basic chemicals are to be reduced to 20 per cent. These proposed reductions can become effective from 1 February 1987, as indicated in the Minister's Press release of 1986. An expectation on the phasing of general applicability in industry is provided in respect of fertiliser grade phosphetic acid. As from 1 November 1986 imports will enter duty free. This will enable Australian manufacturers to increase their output of high analysis phosphatic fertilisers in response to the changes in subsidy arrangements announced in the 1986-87 Budget and to maintain supply to farmers at competitive prices. The Bill also implements that part of the Government's decision relating to the concessional entry of a number of products. These amendments are affected by policy by-laws.

The Opposition, at its December 1986 meeting, decided to support in principle the thrust of the Industries Assistance Commission recommendations. It had previously adopted the view that the Government's proposals on future assistance to the chemicals and plastics industries should provide a predictable and steady basis for necessary change and rationalisation within the industries. The proposal to phase tariff reductions over three to five years will greatly assist downstream industries, such as the plastics, glass, alumina, paper and chemical industries, which utilise large volumes of chemicals as an input product. The Opposition will not oppose this proposal.

In relation to the clothing, footwear and textiles changes, the legislation provides for the general tariff rate of 25 per cent on knitted fabric laminated with expanded or foam rubber to be reduced to 2 per cent. The general tariff rate on knitted towelling is increased from 35 per cent to 60 per cent, which is a very substantial change, and the general tariff rate on interior textile blends is increased from 2 per cent to 25 per cent. The latter two changes are being effected to remove anomalies which permit the goods involved to enter at rates lower than those applying on substitute products.

The proposed amendments in respect of the current textiles, clothing and footwear plan provide for the following: Variations to the developing country exclusions from preference-these amendments are made annually; the enactment of 1987 tender quota rates applying to TCF import allocations; the extension of the validity of the 1986 quota allocation; the phased duty arrangements in respect of a number of articles of the Australian New Zealand Closer Economic Relations Trade Amendment; and changes providing special provisions in relation to footwear from New Zealand and hand made footwear from developing countries to avoid large variations in rates which could occur because of currency fluctuations. The substantive legislation to effect the Government's decision on the TCF industries is yet to be introduced into the Parliament.

In relation to the power industry, about which we propose to move second reading amendment, the Government has accepted the IAC's major recommendations for a uniform 20 per cent tariff for most power electronic goods. Some power electronic goods, presently tariffed at 30 per cent, are to receive a general tariff of 25 per cent for one year and then phase to the long term rate of 20 per cent. Schedule 11 also includes increases in the general tariff rate to the uniform rate of 20 per cent for a number of power electronic goods. These goods are presently free of duty or incur only small amounts of duty levied. The proposed rationale for these arrangements is to ensure uniformity or neutrality in the assessment of goods; that is, substitutable goods should receive similar tariff treatment. The most common duty rate currently applicable to the power electronics industry is 25 per cent. As the Government's decision on assistance to the power electronics industry and, indeed, the current amendments, involve a reduction of only 5 per cent in absolute tariff levels, it may be argued that the proposals do not reflect a strong enough commitment on the part of the Government to curtail protectionist measures. While the 20 per cent rate for the power electronic goods industry aligns its assistance arrangements with those of other electronics based activities, it should not be considered the long term protectionist rate for the industry as a whole. The Opposition will move an amendment to give emphasis to this aspect, and to draw attention to the fact that the proposals in this area do not underscore the importance of making the electronics industry more internationally competitive.

Import preference for developing countries has been an area that has been constantly under review and which does cause concern from time to time. In accordance with the principles of the revised Australian system of tariff preferences for imports from developing countries which formed part of the Customs Tariff Amendment Act 1986, all new quotas are to have a margin of preference of 5 percentage points. This is a reduction of 2 1/2 percentage points from that which applied to quotas in existence at the time of implementation of the revised developing countries preference scheme. In many areas the preferences granted to developing countries have been of enormous benefit to those countries. In some cases their implementation has brought about a distortion in the way in which com- panies have acted in relation to the placement of certain manufacturing arrangements. There are also minor changes in relation to duty on goods of New Zealand origin. Some of these changes from time to time are drawn from the comments of industry.

The second Bill is the Excise Tariff Amendment Bill 1987. The amendments involve alterations that have occurred since 1 October 1986 to the excise duty on certain refined petroleum products and naturally occurring liquefied petroleum gas. Once again this brings to the fore the Government's policy in relation to petroleum taxation. We all no doubt remember that when the current Government campaigned in the March 1983 election all Australians were promised a reduction in the petrol price of 3c per litre. So all the electors of Australia should well recall that promises made by the present Government should not be taken too seriously. We were promised that there would not be an early election, and we will be having one. In 1983 all Australians were promised a 3c reduction in petroleum prices. What has occurred? In March 1983 the excise on a litre of petrol was 6.155c per litre. That excise today is 19.84c per litre.


Mr Braithwaite —Almost double.


Mr MOORE —The honourable member for Dawson knows the implications for the farming community in his area and all of those who are so dependent on it. Every member of the House would be well aware that a 3c reduction, when an increase of 13.5c per litre has been promised, is some turnaround. If we hang 13.5c over the average price of 54c a litre, we get some idea of the impact that has occurred. That has occurred since this Government was elected. It promised a 3c a litre reduction. Instead of that, there has been a 13.5c increase in that same period. What can we expect in the future from a Government that increases levies in that manner?

In addition, it should be borne in mind that while the excise has been increased from 6.1c to 19.8c a litre, in the same period the price of oil has gone down around the world. There has been a great reduction across the board from $30 and $40 a barrel down to last night's price of $19 a barrel. Yet the Australian user of petroleum has been hit by this increase in excise charges which provides revenue to the Government. That should not be forgotten. People were promised a 3c a litre reduction. What did they get? They got a 13.5c a litre increase in government charges in that area. That is some record of promises. Petrol is used by all Australians every day in both their commercial and recreational activities. The Government ought to hang its head in shame in relation to its attitude to the general public in this area.

I turn to the budgetary implications. The revenue raised from the crude oil and LPG levy has fallen by 67 per cent while the adjustment to excise has been seen to raise revenue from that source by 95 per cent. As honourable members can see, as the price of petrol has gone down the profit margin that flows to the Government from that sector has fallen by 67 per cent. The excise charged, reflecting the increase from 6c to 19c, has in fact gone up by just short of 96 per cent-95.9 per cent. It must be worrying to the Government that the excise received from the Bass Strait crude will start to decline, and that will occur from about 1990 onwards. The effects of the decrease in crude oil revenue from the Bass Strait will inevitably flow on and affect the whole government sector. The Government cannot continue to sock the petroleum users of Australia with increased excise to make up for the fall in production from that area and therefore in the levy that comes from that.

I do not think there is one person in the House who would not be concerned at the way things have gone. On top of that, honourable members should look at petroleum pricing. The price of petrol in Australia has changed markedly. The Prices Surveillance Authority gave maximum endorsement to the industry price, in other words the wholesale price, based on all capital cities, for motor spirit of 97 octane rating of 44.5c in Sydney on 1 March 1987 and 49c on 16 May 1987. In fact the retail price throughout Australia in that period went from 43c to 54c and, in some cases, such as Hobart, from 48c to 64c per litre. Tasmania is very dependent on petroleum as it is a long way from the mainland. These outlying areas are therefore required to use high levels of petroleum. Darwin is another case in point. The price there was 44c in March 1983 and it rose to 55c in December 1986. In the same period crude oil prices have fallen and the Government catch up has been in the form of excise, which has gone up by just short of 96 per cent. That is quite a record to defend. The Government promised a 3c reduction but, through its actions, and not through the price of oil, it has forced a significant increase in the price of petrol on to all Australian users.

Finally, the third Bill, the Customs (Valuation) Amendment Bill gives effect to some areas in which the Government has felt that people have been importing goods and not paying the appropriate rates of duty. Over the last few years the Australian Customs Service has become increasingly aware of evidence of importers undervaluing imported goods in order to reduce the duty payable. It is worth recalling that in yesterday's debate I instanced the new measures to be introduced on 1 July relating to passengers returning from overseas. When they go through the barrier they will be required to certify their $400 worth of duty free goods. I said at that point that any man's suit would go over that figure and certainly the value of any other duty free items would rapidly add up.

As I have said, the reason for the introduction of this Bill is that the Government has become aware of evidence that importers undervalue imported goods in order to reduce the duty payable. That is exactly the same argument that I used yesterday against the proposal that a Customs Officer at the barrier from 1 July will be required to ask 65,000 returning Australian tourists to vouch for the value all their duty free items. Does the Government really genuinely believe that all invoices obtained overseas will be genuine? These invoices could be from the Middle East countries, from the United State of America, from South America, or from African countries. I will bet that even the Minister for Science (Mr Barry Jones) would be able to tell an account which was slightly at variance with reality.


Mr Barry Jones —Even the Minister Assisting the Treasurer on Prices.


Mr MOORE —Yes, in that capacity alone, he would know an account which was at some variance with the real value. Those accounts will flock in to the poor Customs officers at the Sydney (Kingsford-Smith) Airport in particular. They will be asked at 7 a.m. to make returning passengers produce vouchers, many of which will be totally false. They will have to enter into discussions at that hour of the day about the genuineness of the vouchers, while the large queues of people wait. I feel sorry for Mr Hayes. Mr Murphy, the New South Wales Collector of Customs, will have a tremendous time answering the complaints that will flow to the Minister, who will no doubt pass them on to the Australian Customs Officer, which will have to have more people not only at the barriers inspecting bills to see whether they exceed $400, but also answering letters of complaint. As $200 now has to be put up each time a complaint is made, a great old time will be had. People coming through the barrier will tell falsehoods about the $400, they will make complaints to the Minister if duty is charged, the Minister will have to write to them, and the people will have to pay $200 if they want to apply for a refund of the duty. What a fiasco. We will have a great paper chase at the Sydney Airport. I ask the Minister to use a little common sense in this area.


Mr Barry Jones —There are opportunities for Brisbane, too, in this.


Mr MOORE —Not so many international flights land there, but common sense abounds in Queensland. To claim that it will be possible to turn up evidence of importers undervaluing imported goods and at the same time to place so much reliance on officers at the barrier to pick up people who front up with falsified documents for imports over $400 is to stretch the bounds of belief more than I care to this morning.

Regrettably, the findings of the review that was undertaken in association with the Attorney-General's Department have not been made available to the public. The review brought to light a number of apparent loopholes and avoidance practices being exploited by importers. That would have required, I would have thought, the Attorney-General's Department taking some action in that regard. If the Attorney-General's Department had always been efficient and quick, many of the problems that afflicted the previous Government would not have occurred. I refer to the bottom of the harbour schemes. In my view the Attorney-General's Department was the principal culprit.

Another proposed change in this legislation involves the granting of new powers to the Comptroller-General in his capacity to review Customs determinations or decisions. The Opposition has been critical of the powers already vested in the Commission of Taxation, and hence extending the powers to another administrative bureaucrat is not desirable. This change involved an exponential increase in the powers conferred on the Comptroller-General when it is more than likely that the current provisions are not being utilised in the most effective manner. Further, the unlimited rule in respect of the Commissioner of Taxation is subject to a number of conditions. While this particular amendment does not apply to the circumstances where duty is short-paid through error, it does, however, result in an intolerable increase in the powers available to the Comptroller-General in obtaining a retrospective charge on customs assessments.

The recommendation which allows for an extension of the ability to go back beyond one year is of some concern in relation to these matters. That ability to go back, tied with what the honourable member for Dawson (Mr Braithwaite) pointed out yesterday was its retrospective nature, is of concern to the Opposition, and is something which I am sure the honourable member for Dawson will expand on. It certainly was my experience that the resources of the Customs Service were heavily taxed to maintain surveillance and service at the required commercial levels. But the extension of discretionary powers to the Comptroller-General is something that we would all be hesitant about and it is something that the Opposition has always been reluctant to do. I can say from personal experience that heads of departments say `Now, Minister, just sign here for a delegation of power' or, as I have heard Commissioners for Taxation, say: `Really, you should not worry about that particular aspect; if you give me the discretionary power, I will look after it for you'. I think those sorts of activities are regrettable and, in the main, are done so that Ministers can shirk their administrative responsibility, at the same time allowing discretion to build up in the hands of Taxation Commissioners or other Department heads such as the Comptroller-General, who has enormous powers under the Customs Act-quite unprecedented powers. To me that is alarming and disconcerting and I do not personally approve of it. This is the Opposition's position: A second reading amendment in relation to the Customs Tariff Amendment Bill and an objection to a clause in the Customs (Valuation) Amendment Bill 1987. I move:

That all words after `That' be omitted with a view to substituting the following words:

`Whilst not opposing the Bill the House is of the opinion that the uniform general tariff rate of duty on power electronic goods under reference should be further reduced in the medium to long term'.


Mr Braithwaite —I second the amendment and reserve my right to speak.