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Thursday, 13 September 1973
Page: 1031

Mr Bourchier (BENDIGO, VICTORIA) asked the Treasurer, upon notice:

(1)   What will be the loss to revenue as a result of the 25 per cent tariff reductions.

(2)   What steps has he taken to recover this amount in the estimates.

Mr Crean - The answer to the honourable member's question is as follows:

(1)   The 25 per cent reduction in protective tariffs has, on the one hand, a downward effect on customs revenue in 1973-74 due to the lower rates applying and, on the other, an upward effect due to the consequential increased flow of imports. It is not possible to estimate the net impact on revenue in 1973-74 with great confidence but for the purposes of estimating revenue from customs duty in 1973-74 a net cost to revenue of $80m was assumed.

(2)   The Budget comprises numerous proposals involving expenditure increases and decreases and changes in rates of taxation and other charges. There is no question of taking specific steps to offset specific expenditure increases or revenue losses - the Budget is framed as a whole. It may be of interest to note, however, that despite the reduction in protective tariffs, revenue from customs duty is estimated to rise in 1973-74. As shown in Statement No. 5 attached to the Budget Speech revenue from customs duty at then existing rates of duty (that is, those applying after the cut In protective tariffs) is estimated to be $540m in 1973-74, $26.5m more than actual customs revenue in 1972-73. New measures affecting customs revenue announced in the Budget brought the estimate to $563. 8m, $50.3m more than in 1972- 73.

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