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Tuesday, 26 November 1974
Page: 2811

The PRESIDENT -Is leave granted? There being no objection, leave is granted. (The document read as follows)-

This Bill provides for the amendment of the Customs Act in three respects- rules of origin for goods from New Zealand; rules of origin for goods from developing countries; valuation provisions for imported goods.

The rules of origin for goods from New Zealand are being changed by agreement between the two countries. The present legislation provides for three alternative qualifying criteria for goods partly manufactured in New Zealand: (i) not less than one-half of the factory cost is represented by New Zealand and /or Australian labour and materials; (ii) for goods of a class or kind not manufactured in Australia, not less than one-quarter of the factory cost is represented by New Zealand and /or Australian labour and materials; (iii) not less than three-quarters of the factory cost is represented by New Zealand and /or Australian and /or United Kingdom labour and materials.

The amendment relates to the second and third criteria. The second will be replaced by a criterion which would allow the Minister to determine the New Zealand and /or Australian proportion of the factory cost to be a figure above or below the one-half provided in criterion (i), as he deems appropriate. The third criterion is to be deleted since it is clearly no longer in our interests that goods should qualify for New Zealand preference by reason of their United Kingdom content. Parallel legislation will be introduced by the New Zealand Government, providing the same rules for Australian goods entering New Zealand. This portion of the Bill is specified to come into operation on a date to be fixed by proclamation. The present intention is that the new rules of origin will come into effect in each country on 1 July 1975. The amendments to the rules of origin in relation to goods from developing countries are merely textual changes to align the wording of the Customs Act to that of the Customs Tariff.

The amendment to section 154 is designed to remedy a deficiency revealed by a recent High Court decision. The section specifies the method of valuing imported goods as the basis of ad valorem customs duties. It provides that the value for duty shall be the higher of the current domestic value in the country of export or the actual money price paid by the Australian importer. The provision for the use of the current domestic value serves as a protection against under-valuation where the money price paid is influenced by association or by some special arrangement between the buyer and seller. It is defined as the amount for which the seller of the goods to the purchaser in Australia is selling or would be prepared to sell for cash, at the date of exportation of those goods, the same quantity of identically similar goods to any and every purchaser in the country of export for consumption in that country.

It has always been believed that the wording of this section allowed the construction of a current domestic value in all cases where the goods are the subject of a sale. The effect of the judgment is to restrict severely the number of cases in which the current domestic value may be constructed where the seller of the goods to Australia is not selling identically similar goods to any and every purchaser in the country of export. The purpose of this amendment is to allow the continued administration of the provision in the way intended when it was introduced in 1922. Honourable senators may recall that I announced last month that the Australian customs valuation system was being reviewed. This amendment to section 154 will not affect the review; it is designed merely to allow the Department to continue to administer the present valuation system effectively while the review is proceeding. A summary of the clauses to the Bill is being circulated to honourable senators. I commend the Bill.

Debate (on motion by Senator Greenwood) adjourned.

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