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Friday, 21 May 1965

Senator O'BYRNE (Tasmania) .- Mr. President,the Bill before the Senate relates to duties of Customs, and comprises 528 pages. It has 4 schedules, 99 chapters, and 29 clauses. It is a monumental piece of legislation. I pay a compliment to the Minister for Customs and Excise (Senator Anderson) and his departmental officers on the drafting of this Bill and its presentation to the Senate. The purpose of the Bill is to translate and recast the Australian tariff into the internationally recognised language of the Brussels Nomenclature.

The Minister and people engaged in the importing business and industry have stressed that the Bill does not make any significant change in tariff levels. A study of the Bill shows that this is true. The Senate has also been assured that the levels of tariff protection and the areas of non-protection remain the same.

Some attention should be given to the reason for the preparation of this legislation. To do that, I intend to recall some of the events that have led up to the introduction of this Bill into the Senate. It is conceded that everyone concerned in international trade is aware of the difficulties which arise by reason of national customs tariffs, as they are based on fundamentally different systems of classification and naming of goods. The Brussels Nomenclature has been formulated as a result of negotiation and arrangements over the years. Various attempts were made before the Second World War to solve such problems. The Draft Customs Nomenclature was prepared under the influence of the League of Nations in 1931. This was revised in 1937 and became known as the Geneva Nomenclature. But it was found to be unsuitable. It was not until 1948 that an organisation known as the European Customs Study Group was formed for the purpose of establishing uniform customs tariffs for use by all the countries in the union. The Group made considerable use of the Geneva Nomenclature and produced a draft of items. This was considered so valuable that it was decided to establish it on a firm international basis and to draw up a convention for that purpose. On 15th December 1950 the Convention on Nomenclature for the Classification of Goods in Customs Tariffs was signed in Brussels.

The aims of the Customs Co-operation Council which was one of the bodies formed were to secure the highest degree of harmony and uniformity in customs systems and especially to study the problems inherent in the development and improvement of customs techniques and customs legislation in connection therewith. The Council was required to make recommendations to ensure the uniform interpretation and application of the Valuation and Nomenclature conventions. Subsequently the Belgian Government offered Brussels as 'the site for the headquarters of the Council. The Convention came into force on 4th November 1952 and the inaugural session was opened in Brussels on 26th January 1953.

The preamble to the Convention which was signed in Brussels on 15th December 1950 is as follows -

The Governments signatory to the present convention, desiring to facilitate international trade, observing that the progressive removal of quantitative restrictions results in customs tariffs becoming an increasingly important factor in international trade, desiring to simplify international customs tariff negotiations and to facilitate the comparison of trade statistics so far as the data for such statistics are based on the classification of goods in customs tariffs; being convinced that the adoption of a common basis for the classification of goods in customs tariffs constitutes an important step towards attaining all these important objects; having administrative work already accomplished in Brussels in this sphere by the European Customs Union Study Group, and considering that the best way of achieving results in this respect is to conclude an international convention . . .

The Convention was then drawn up. It is outlined in a number of articles which are more or less incorporated in principle in the Bill that we have before us at the present time.

The official languages of the Customs Cooperation Council are English and French. We in Australia have an advantage in that respect because the fact that English is one of the official languages means that people associated with the importation, manufacture and distribution of articles subject to tariff are able to have ready access to the Convention and are thus able to know the international interpretation of items subject to tariff. The Convention has as its aim the securing of uniformity in denning value, for the purpose of facilitating international trade and simplifying customs tariff negotiations and the comparison of foreign trade statistics. It is quite obvious that statistics that are issued in various countries annually or monthly could be of great value in international trade. In my view, achieving uniformity in that respect is a great advance upon the practices of the past. This is part of the -whole pattern of simplication. 1 mentioned that the Convention, which brought about the Customs Co-operation Council, directed, its attention to providing a systematic and logical classification of all goods that enter into international trade, to classifying each product suitably and uniformly in the tariffs of all contracting parties, and to providing a simply and precisely worded nomenclature using terms and phrases that are comprehensible to experts and laymen alike. A close study of the Bill and the information that has been circulated reveals that that objective has been achieved. I am most impressed by the neatness of the schedules. The infinite variety of articles that are covered fit neatly into 99 categories. Those who study the Bill will find that the First Schedule commences with chapter 1 of Division and that the first item - live horses, asses, mules and hinnies- bears the reference number 01.01. For the purposes of international trade, those who did not know what a hinny was could easily refer to item 01.01 and all countries that subscribe to the arrangement would know what was meant.

Senator Morris - What is a hinny?

Senator O'BYRNE - A hinny is a neuter animal.

Senator Cormack - Really it is a jenny.

Senator O'BYRNE - It is referred to as a hinny, but really it is a jenny. We have the ass and the hinny, and the donkey and the mule. The mule is included in the classification, but a mule is only a first cousin to the ass or the donkey. The relatives spread out into the horse field. I say that in passing. I am merely giving an illustration of the scope of the document. The Brussels Nomenclature for these items of great variety will be readily understandable in the countries that subscribe to the Convention. I believe that some of the conditions that have been laid down in an effort to clarify and to simplify the whole matter to the greatest possible extent have been observed and that a great advantage must accrue to people who deal with imports and tariffs.

On 4th January 1961 Australia deposited her instrument of accession to the Convention which established the Customs Co-operation Council. It was formally accepted as a member country at the Council's 18th session on 8th June 1961. Membership of the Council does not carry any obligation to accede to the Valuation and Nomenclature Conventions. However, accession to the Nomenclature Convention will be a matter for consideration when the Australian Customs Tariff in Brussels becomes operative. This Bill will enable the official sanctioning by Parliament of the background work that has been done. When it is passed we shall become a fully fledged member of the Convention. At the time of the preparation of this statement, 19 countries were members of the Nomenclature Convention and 71 countries had adopted the Brussels Nomenclature as the basis of their national tariff. An addition 17, including Australia, are doing so. The fact that Australia is doing so is indicated by the introduction of this Bill. The Council estimates that 70 per cent, of international export-import trade is conducted by countries using the Brussels type tariffs. This is an advancement of international trade, which honorable senators will agree is the life blood of the nation. The wider we can spread international trade and the greater the exchange of goods between countries, the greater will be the prosperity that accrues to those countries, and the greater will be the increase in international understanding.

The grouping of the various items is interesting. There is an overlapping problem, with goods falling under two or more items. This problem has been overcome by the careful drafting of items and the addition of legal notes to aid classification. Interpretative rules are introduced. The Minister outlined the history of tariffs in Australia. It is interesting to recall that on 8th October 1901 the first tariff was introduced as a budget measure. In August 1908 tariff proposals were introduced, also as a budget measure. The next development was on 24th March 1920, with the introduction of a three column tariff, providing for British and dominion preferential tariffs, an intermediate 'tariff and a general tariff. In each division we have the simplification of a reference column which shows the goods, the general rate, the preferential rate and such information as rates applicable to most favoured nations, Canada and New Zealand and the British preferential rate. The older and more cumbersome method of presentation is greatly simplified.

A change of this nature means that the main burden of its interpretation falls on those people who have active tariff interests. The Minister and the Department have given advance information to the various chambers of commerce in anticipation of the change over on 1st July. Perhaps we could call it T - for tariff-day. One can imagine the confusion which would have existed in the business world of this country if suddenly a document of such a massive character were placed in the hands of the various organisations, customs agents and other people dealing with these matters and they had to readjust the office routines and their files and records. There would be utter confusion. To avoid this, the various chambers of commerce and other interested people and organisations have been supplied with advance information. In fact, schools have been conducted which customs agents could attend to be briefed on the implications of the legislation now before us. The schools gave the interested people an outline of how to interpret the rules and the legal notes. Those who attended the schools have complimented the officers of the Department of Customs and Excise for the assistance they gave in the schools to importers, manufacturers and all concerned with imports and rates of duty.

In his second reading speech the Minister referred to the Melbourne Chamber of Commerce publication of February 1965 in which attention was directed to this document. It mentioned that the document lays down a format of a customs tariff, the exact wording of all the tariff items, the rules of interpretation and a definition of the terms and expressions incorporated in it. The Chamber accentuated the point that the document does not incorporate any changes in the rates of duty. It went on to point out that the adoption by Australia of a tariff incorporating the Brussels Nomenclature will mean that all imports into Aus tralia will be classifiable under the same tariff item as they would be in the tariffs of all countries which have adopted the Nomenclature.

Referring to a statement by the Minister for Customs and Excise the Chamber said that the new tariff presents a logical and systematic approach to the classification of all duties and is in the same form as is used in most of the major trading countries. It also mentioned that the changeover will undoubtedly confer benefits on the Australian public, particularly after users become familiar with its provisions. In addition, consideration benefits are to be gained in the international sphere in respect of trade agreements and trade statistics by adoption of common nomenclature. The article also stated that although the new tariff is not expected to become operative until 1st July - and after the passage of the measure both here and in another place - the Department made certain that customs agents and importers had a good knowledge of the background of the Brussels Nomenclature tariff items. The Chamber of Commerce added that it supports the Government in its move to bring the Australian tariff into line with that of all major trading countries. This indicates 'that the people who have the responsibility of interpretation of the Brussels Nomenclature and of the schedules incorporated in the Bill when it becomes law have been well briefed in its contents and give it support.

The details of the Bill have been explored by the Minister. The measure is of such a technical nature that to understand it fully requires very close study. Those who regarded it as reading material would find it rather dry, but customs agents whose business it is to act as the liaison between the general public and the Government's policy - and this also applies to the shipping people and all the way along the line - now have a common language which they can readily understand and interpret. This is of great importance to them. Although the document has a rather forbidding appearance I am sure it will be of great assistance.

Ample time has been given for the changover. Notice has been issued that the measure will become operative from 1st July next, thus ensuring that there will be no dislocation of other activities such as the issuing of annual reports by the Bureau of

Census and Statistics. This course is preferable to introducing the legislation in an intermediate period so that the change would take place in part of each of two years, thereby disturbing the statistics for two years. The operative date of 1st July has been set deliberately for this purpose and, at the same time, allows an ample period of time for customs agents and other people associated with importing to make a proper study of the proposed legislation.

Another aspect to be considered is the blending of the old legislation into the new legislation. The advice o, various people associated with customs, imports and exports was sought. Discrepancies due to clerical or typographical errors have been noted. In his second reading speech the Minister stated that, where possible, discrepancies had been rectified in the Bill. Others will be adjusted by gazettal and will be corrected in any future printing of the measure. This indicates the close attention that has been given to detail.

Those associated with this completely new phase of the administration of our economic life have had an onerous and complicated task. The Bill deals with tariffs on all kinds of imports and exports involving a great variety of rates and definitions of various commodities. Great credit is due to those concerned for making this transfer possible with such a minimum of error. It says much for the administration of the Minister for Customs and Excise and the efficiency of the officers of the Department.

The subject matter of the Bill can be absorbed only as a result of a close study of the range of commodities and the associated activities it covers. A perusal of this document is most educational. It gives a clear idea of the volume and variety of goods that make up trade between countries. I have referred to the categories covered, such as live animals, but other chapters deal with a variety of meats, edible offal, fish, dairy produce, honey and a great number of other products of animal origin. Other categories cover vegetable products and. in all, the Bill demonstrates how technical the collection of revenue through customs is and can be. Customs tariffs have become a most important factor in the administration and financing of Commonwealth activities. The average layman has only a vague concept of the amount of revenue that flows to the Treasury from customs and excise duties. It represents a substantial portion of Commonwealth revenue.

As an illustration of the complexities of classifications I was interested in the apparently simple matter of glass and glassware. There is glass of the variety known as enamel glass, in the mass, rods and tubes, and there is glass in balls, rods and tubes, unworked, not being optical glass. In Chapter 70 - Glass and Glassware - I also rind these items - Figured rolled, cathedral, milled rolled or rough cast glass; unworked drawn or blown glass; clear glass, cast, rolled, drawn or blown glass in rectangular shapes; X-ray protective glass; float glass less than 3/16 inch in thickness; glass in sheets not exceeding 25 square feet; cast, rolled, drawn or blown glass, cut to shape other than a rectangular shape; stained glass windows for installation in churches or public institutions; glass, surface ground or polished; glass mirrors, including rear view mirrors; vanity mirrors; carboys, bottles, jars, pots, stoppers, siphon vases, glass envelopes, glass vacuum flasks, and numerous other categories of glass. It is most educational to peruse a document of this nature because one realises how wide the field of imports and exports is and how much our everyday lives depend on the commodities I have mentioned. We should think of the amount of work that has been put into the manufacture or those goods and then consider their transportation and, eventually, their distribution. We should consider also the amount of work that has gone into the classification of them. All those goods are kept under close supervision and control through the Department of Customs and Excise.

Mr. Deputy President,the Opposition does not oppose this Bill. The Minister has assured us that the main schedule has been translated from the existing -Tariff Act in accordance with the Government's decision or direction that any changes in the level of duty should be minimal but that a rationalisation should be made to produce a workable document. I venture to say that there are reports from people who are actively engaged in and associated with customs and related activities to the effect that this is a workable document. I have already referred to the timing factor. The commencing date, 1st July next, will give those interested in the legislation ample time to study it. The Commonwealth Statistician is geared for the changeover from 1st July.

Another interesting point associated with this Bill is that the transition to a similar tariff to that adopted by the European community, and many African and Asian nations, is in the process of being, or already has been, accomplished. That, in my view, will be a great advantage which will open up and expedite our communications with other countries throughout the world. The Minister for Customs and Excise, in presenting the Bill to the Senate, quoted the following passage from a circular letter sent out by the Melbourne Chamber of Commerce -

An Australian tariff with a common nomenclature to that used by many other countries and one which presents a more logical and systematic approach to tariff classification, will be a benefit to all concerned with imports.

I believe that that is true. The administration of customs and tariffs on an international level in the future will be made simpler and the areas of misunderstanding that aTe so common in other fields of international communication will be still further reduced. The items in the customs schedules deal with material things, with objects that can be seen, handled and classified. As I remarked previously, the neatness of the classifications has impressed me very much. It is perhaps rather a pity that in our international dealings generally we are not able to do something like this with more abstract problems such as the adoption of an international language, differing ideologies and religions, and so many of the other things that are disturbing the minds of men throughout the world.

Senator Wright - Should they be put in a customs schedule?

Senator O'BYRNE - No, I do not mean that, but at some time in the future I think there will be an international language. I believe that the lack of an international language accentuates and perpetuates racial differences. National boundaries create jealousies and differences which keep people apart. In matters such as customs tariffs we see a great number of countries agreeing on a common objective for their mutual benefit. They agree to have a document which makes it possible, for instance, for a man to know that, when someone refers to Item 69.12.1, he is referring to " pudding basins; lipped bowls ". That, to my way of thinking, is a great advance in international understanding.

Perhaps I have not dealt adequately with this subject. It really calls for a long term of experience in the Department of Customs and Excise and a tremendous amount of research if one is to deal adequately with such a complex and technical matter. However, I am sure that people of goodwill have throughout the years realized the importance of the co-ordination of customs activities, and in doing so they have made a great breakthrough. I hope that the nations which have not yet become signatories to the Convention or which have not yet given legislative effect to the Brussels Nomenclature will do so. As we have become a signatory to the Convention, and since we have by means of this legislation shown that we appreciate the advantages of being a signatory to it and have undertaken all the groundwork that is necessary, we can look forward to a period of greater international understanding in this field.

I wish again to express the view of the Opposition that great credit is due to the Minister for Customs and Excise and his Departmental officers for having presented to the Senate in what is virtually a concise form such a vast field of activities and responsibilities covered by the Department. We wish the Bill a speedy passage.

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