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Tuesday, 14 May 1985
Page: 1896


Senator BUTTON (Minister for Industry, Technology and Commerce)(4.19) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

This Bill proposes a number of major amendments to the Customs Act 1901 and the Excise Act 1901, and a number of minor and consequential amendments to each of those Acts, and the Distillation Act 1901, the Spirits Act 1906, and the Coal Excise Act 1949.

The major changes to the legislation concerns proposals to:

(a) amend the Customs Act to change the legislative basis for the allocation of import quotas by tender;

(b) amend both the Customs Act and Excise Act to introduce more effective controls over ships' and aircraft's stores, impose liability on bodies corporate in respect of breaches of customs or excise law resulting from certain actions by their directors, servants or agents, and automatically index the rate of the rebate which is payable to those who have paid duty on diesel fuel used for certain off-road purposes, and;

(c) amend the Excise Act and the various other Excise Acts to increase the level of penalties and update the prosecutions provisions.

I will now deal briefly with each of the proposed changes. Clauses 18 to 22 of this Bill amend Part 15 of the Customs Act to provide the required legislative bases for flexible quota periods, which will permit, amongst other things, the implementation of the policy objectives of the Government's plan for the motor vehicle industry. The Clauses will also resolve some practical difficulties in the general administration of the tender quota scheme, facilitating tender-quota arrangements for assistance to the motor-vehicle industry as well as other areas where import quotas are used, notably in the textiles, clothing and footwear area.

In brief, the proposed amendments:

(1) enable the Minister administering the Customs Act to determine the periods of validity for which tender quota schemes are to run;

(2) change the requirements of the tender quota undertaking so that tenderers need only undertake to enter the relevant goods for home consumption and not also undertake to import the goods; and, consequently,

(3) change the importation requirement of quota instruments to a requirement that the goods be entered for home consumption.

In announcing the Government's policy on the motor vehicle industry in May last year, four central aims were highlighted; they were, to give the industry more time to restructure and modernise; to make it more efficient; to hold down the price of cars; and to reduce job losses in the short term and provide job stability.

An important element of that policy concerned tariff quota arrangements for imports. The Government decided, amongst other things, to allocate an increasing proportion of tariff quota by tender in two pools, the first pool for a one year allocation in respect of which 17 300 units of import quota have already been allocated for 1985 and the second pool for an allocation in each of four years commencing in 1986.

Provisions of the existing Customs Act impose the constraint that tenders be called for and dealt with one year at a time. The proposed amendments are necessary so that multiple year tender arrangements can be implemented.

In addition, avenues have been considered by which the tender scheme may be made more flexible in line with the Government's general attitude to the allocation of quota by tender and normal commercial practices. For example, supply and shipping arrangements for quota goods often cannot be organised to exactly correspond with the existing 12-month quota period. Such a rigid quota period also reduces importers' flexibility to react to market changes. The Government considers it appropriate therefore, to provide importers with some degree of flexibility at each end of each quota year. In the context of the motor-vehicle industry, it is anticipated that quota allocations be given 14 months validity, to allow some degree of anticipation and carry-over.

The other parts of this particular amendment package provide for the removal of certain technical requirements from the tender quota undertaking and Ministerial Determinations.

Such changes are consistent with other areas of the Customs Act and established customs procedures, and will have no adverse effect on assistance levels provided through tender quota arrangements.

The amendments proposed in respect of controls over the loading and safe-keeping of, and accounting for, ships' and aircraft's stores (particularly spirituous liquor and tobacco products) in Clauses 7, 9 to 12, 34 to 36 and 44 of the Bill are intended to correct deficiencies in the present system, which is not sufficiently effective in preventing illicit diversions, with a consequent erosion of Commonwealth revenue. The proposed measures accord with those permitted for adoption under the International Convention on the Harmonization of Customs Procedures.

The Bill also proposed in Clauses 17 and 43 to insert provisions to correct present deficiencies with prosecutions attempted against bodies corporate. Bodies corporate against which proceedings are brought, are presently able to escape liability in some cases by proffering the defence that the director, servant or agent whose conduct constituted the offence was acting without the knowledge or consent of the body corporate and without its authority.

Under the proposed provisions, the state of mind and conduct of a director, servant or agent of a body corporate (or the servant or agent of an unincorporated principal) may be imputed to that body corporate (or other principal) where the conduct engaged in was within the person's actual or apparent authority.

In clauses 13 and 37 of the Bill, an important amendment to the diesel fuel rebate scheme is proposed. The amendments will permit the automatic indexation of the rate of the rebate which is payable to those who have paid duty on diesel fuel purchased for off-road use in agriculture, mining, fishing, forestry, households, hospitals and nursing and aged persons homes. The decision to index the rate or rebate to movements in the Consumer Price Index was announced in the Treasurer's 1984-85 Budget speech. The indexation will occur at six monthly intervals and coincide with the automatic indexation presently applied generally to all rates of excise duties and corresponding customs duties.

A further important feature of this Bill is the updating of penalties prescribed for offences against the Excise Act 1901, the Coal Excise Act 1949, the Distillation Act 1901 and the Spirits Act 1906.

Many of the penalties for offences which strike at the very heart of proper revenue flow have been unchanged for over 80 years.

The increases which the Bill proposes have been arrived at in consultation between the Department's of Industry, Technology and Commerce and the Attorney-General's Department.

Particular regard was given to the increases in penalties for offences against the Customs Act 1901, which Parliament approved in 1982, and to comparisons with penalties prescribed for offences against other Commonwealth Acts.

Increases proposed in relation to some particularly revenue sensitive offences are substantial, but are seen as necessary to provide effective deterrents against the increasing sophistication of 'white collar' crime generally, and the high rewards which can be obtained by large scale revenue evasions.

Financial Impact Statement

The only measure contained in this Bill which will require any direct additional financial outlay by the Government is the proposal to index diesel fuel rebates. The estimated costs of indexation for the 1985-86 and 1986-87 financial years is $4.3 million per annum.

I commend the Bill to the Senate.

Debate (on motion by Senator Collard) adjourned.