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Thursday, 16 June 2011
Page: 3230


(Question No. 650)

Senator Abetz asked the Minister representing the Minister for Home Affairs, upon notice, on 5 May 2011:

(1) Can details be provided of the 3 month compliance campaign into low value imports, including the: (a) name; (b) objectives; (c) cost; and (d) outcomes, of the campaign.

(2) What impact did this have on the flow of overseas imports and their timely delivery.

(3) Was there any difficulty in the storage of held goods during the campaign.

(4) How many consumers were contacted about the goods they were importing during the campaign.

(5) How many parcels were determined to be non-compliant during the campaign, and what goods and services tax or duty was payable on these non-compliant items.

(6) (a) How many parcels declared to have a value less than $1 000 arrive each year; (b) how many are found to be non-compliant; and (c) how has this figure fluctuated over the past 10 years.

Senator Ludwig: The Minister for Home Affairs has provided the following answer to the honourable senator's question:

(1) (a) The national campaign is known as Enhanced Compliance - Import Threshold Campaign.

(b) The campaign objectives were to assess the extent to which:

goods imported from overseas were being undervalued to avoid GST and duty; and

shipments were being deliberately broken down into smaller imports to take advantage of this threshold.

(c) Campaigns are regularly under taken by Customs and Border Protection to assess the level of risk or to address non compliance in a particular area of concern. Campaigns run for defined periods of activity and are resourced by re-prioritising effort across the agency. To undertake the Enhanced Compliance - Import Threshold Campaign, 38 officers were allocated from other activities for three months. This level of staffing effort equates to approximately $900 000.

(d) Customs and Border Protection published the outcomes of the campaign on its website on 19 May 2011. These outcomes show the vast majority of people are complying with requirements. During the campaign, Customs and Border Protection undertook:

over 33,000 physical examinations of international mail articles;

over 32,000 assessments of air and sea cargo declarations (approximately 99% of low value declarations are in air mail);

contacted over 13,000 importers to confirm the purchase price paid for the goods;

detected 1,942 instances of non-compliance with the low value threshold; and

collected over $550,000 in additional revenue and identified over $160,000 in deferred GST. This is an average of $369 in additional revenue per detection (note: this is across both air and sea cargo and international mail).

(2) During the campaign, where the value of goods could not be established importers were contacted to confirm the purchase price paid for the goods. In these instances, the goods were held until importers responded to requests for proof of purchase price.

(3) Goods that have not received Customs clearance must be stored in a licensed or approved Customs place and are the responsibility of the operator. During the campaign, Australia Post arranged for some temporary additional storage of held goods awaiting proof of purchase at their Sydney International Mail Gateway (IMG) facility - one of four IMGs that processes imported mail.

In the air and sea cargo environment the majority of held goods were stored by express couriers. There were no indications from the express couriers that they had difficulty storing these goods in their current facilities.

(4) Approximately 13,000 importers were contacted to confirm the purchase price paid for goods.

(5) 1,942 instances of non-compliance with the low value threshold were detected during the campaign. From this, $429,152 in GST, $128,193 in duty and $160,882 in deferred GST was identified.

(6) (a) In 2009-10 there were approximately 44 million items (excluding letters) imported to Australia with a value under $1,000.

(b) The Enhanced Compliance - Import Threshold campaign has shown the vast majority of importers are complying with the existing low value threshold rules. Sampling of the general population during the campaign showed non-compliance rates of:

0.1% in international mail; and

2.0% in sea and air cargo declarations.

(c) Since the increase in the low value threshold in 2005 for air cargo, compliance activities have focused on identifying and targeting high risk consignments, and did not include a sampling program. This makes it difficult to compare fluctuations across of the general population over this time. However, during previous targeted activity (April to September 2010), Customs and Border Protection targeted and assessed 33,632 consignments entered under the low value threshold in air and sea cargo. These assessments resulted in 1,910 detections and recovered $185,140.59 in duty and $487, 917.88 in GST. A further $1,001,588.89 in deferred GST was identified.