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Wednesday, 27 May 1987
Page: 3394

Mr BRAITHWAITE(12.28) —As indicated earlier, I second the amendment which has been moved by the honourable member for Ryan (Mr Moore), the Opposition spokesman in this area, and I now speak to the Customs and Excise Legislation Amendment Bill 1987 and the Customs Tariff (Commonwealth Authorities) Amendment Bill 1987. As has been indicated to the House, these two Bills are part of the Government's May mini-Budget. They cover three main measures announced by the Treasurer (Mr Keating): Firstly, the imposition of customs duty on Commonwealth authorities that are not Federal departments; secondly, the changes in the administration and eligibility requirements of the diesel fuel rebate system for off-road users; and, thirdly, the imposition of a $200 administration fee for the processing of applications for refunds of customs duty.

Let me say at the outset that this Bill makes a lie of the Government's claim that the May mini-Budget does not impose any new taxes. In fact, the $4 billion reduction in the forward Estimates deficit that was promoted was not confined exclusively to expenditure cuts. The so-called administration fee is clearly a new and, in the opinion of the National Party of Australia, a totally unwarranted tax. If we look at the breakdown of the $4 billion that has been promoted as expenditure cuts, we find that $1 billion is to come from the sale of Commonwealth assets. It is ironic that in the Whitlam years we had a Federal Minister trying to borrow money to buy back the farm, and now this Treasurer is selling the farm, as it were. The $400m associated with additional revenue items is in no way related whatsoever to expenditure cuts. There is a $1 billion expenditure cut off the State budgets, which either has to be borne by the States or made up by the States. Effectively, we cannot say that that is a genuine $1 billion reduction right across the board. Six hundred million dollars is a deferment of payments. Only $1 billion can legitimately be claimed as expenditure cuts. So the promotion of a $4 billion expenditure cut, of course, is a myth. The requirement to make Commonwealth authorities pay customs duty also imposes a fresh charge and is in no way connected to reducing the size of the Government's functions.

The National Party will not be opposing these Bills as we believe that they are part of the Government's Budget. However, we will be highlighting their adverse consequences on the community, and the fact that these adverse consequences have been brought about by the Government's budgetary incompetence. Since the last conservative Budget was presented in this place, the extra spending that has occurred under the Treasurer has seen a $10 billion rise in real spending between those two years. So there is a capacity for government expenditure to be cut on that basis alone. As well, I will be moving an amendment at the Committee stage to remove an unacceptable situation of retrospective payments that is embodied in one of these measures.

This Government has complained that, because of international conditions beyond its control, Australians have had to accept lower living standards. The fact is-and these three measures are evidence of this-that this Government is dragging living standards and community facilities down because of its inability to meet its Budget deficit figures. I repeat that in the four Keating Budgets the deficits have blown out to an aggregate of $24 billion, which is a further commitment on the loan program, an increase in interest rates and a further reduction in the living standards of all Australians as a result. It is because there was a $4 billion blowout in the Government's spending that people will have to do without new phones, to fill in more forms and to wait longer to get imported goods.

The first section concerns the changes to the Customs Act making public authorities liable for customs duty. It is the biggest revenue raiser of the three changes, raising an extra $75m for the Government every year. I must agree with the Minister for Science (Mr Barry Jones) in his second reading speech when he said that this decision will bring public authorities into line with private enterprises engaged in the same field of commerce. No one can argue that a public authority engaging in the same industry as other enterprises should enjoy preferential taxation treatment.

I also note the report of the Committee of Review on Government High Technology Purchasing Arrangements, which also recommended that Commonwealth agencies be required to pay customs duty, as the concession had led to `economic distortions and the promoting of a loss of allocative efficiency for the whole economy'. So if this change makes the purchase of Australian equipment more attractive to Commonwealth authorities, it is to be welcomed.

However, this change will also adversely effect many Australians. Already our two biggest public authorities, Telecom Australia and Australia Post, have announced they will have to reduce services and increase charges to compensate for the extra expense that occurs. Other public authorities, without being as specific as Telecom, have indicated they will also be forced to reduce their services.

In a Press release of 14 May, the National Media Manager of Telecom spelt out some of the reductions caused by this new requirement. Firstly, the rural and remote areas program which aimed to provide modern automatic telecommunications services to rural and remote area customers by 1990 will be severely curtailed and will not be completed by its target date. That is a real tragedy. Secondly, the network relief activity, meant to improve congestion levels in country areas, will have to be scaled down, and work to modernise switching equipment in central business districts to provide enhanced services will be put at risk. Thirdly, material orders in the short term to Australian manufacturers will have to decrease by about $50m. Fourthly, it is likely that the number of applicants experiencing serious delays will rise significantly. All these delays, these extra charges and reduced services are because of Labor's deficit blowout. They are not the fault of Telecom. They are the result of Labor's economic mismanagement.

In my home State of Queensland, especially in the electorates of my colleagues the honourable member for Maranoa (Mr Ian Cameron) and the honourable member for Kennedy (Mr Katter), which take in large areas of rural Australia, these reduced services will be particularly felt. The supply of these services will also be curtailed. The rural and remote area program, an excellent program which has brought a reliable telephone service to thousands of Queenslanders who live in isolated areas, will be put on the backburner. Installation fees will rise and Telecom is apparently planning to reduce its Queensland work force-all a consequence of the May expenditure statement.

Finally in this regard, if it is good enough for this Government to make Commonwealth authorities pay customs tariff, I suggest that the Commonwealth itself should pay its full way. I refer to the fact that local governments are asked to bear the costs of the rates on government institutions, authorities, and so on, that have those facilities rate free but suffer a substantial loss of revenue as a result. The 2 per cent tax sharing arrangement that was there at one stage was little compensation when the local governments had to pick up the services and everything else required for government buildings-in particular, buildings for local government authorities.

I turn now to the second part of these Bills-the changes in the diesel fuel rebate scheme. These are of a relatively minor nature, saving the Government $6m out of the total cost of the diesel fuel rebate scheme which is estimated to be $500m this financial year. The changes are mainly savings in administration through requirements for farmers to fill out more paperwork and give more information when claiming the rebate. However, there will be virtually no financial disadvantage to the users of the scheme. I want to read into Hansard comments made on this by one of the farmer organisations:

The changes . . . increase the minimum claim that will be processed, from 1000 to 2000 litres, and calculates the rebate on the basis of an average excise rate rather than refunding the actual excise paid.

It is said by the farmer organisation to be mischievous to call the suggested changes efficient. To continue:

They really mean that the Government will do half the job and leave farmers and others to bear the cost. Increasing the minimum claim to 2000 litres would mean that rebates in lots of less than about $400 would not be processed.

It is suggested:

No business would be allowed to refuse to pay its debts until they amounted to more than $400 and neither should the Government.

These complaints are legitimate. The charges will ensure that farmers are put to extra trouble and time. We can hope only that the Government's claim that it will do something to streamline administration will offset the additional imposition on farmers as far as compliance is concerned.

The third feature of these Bills is the imposition of a $200 administration fee for applications for refunds of customs duties overpaid. The National Party believes this is an extremely obnoxious new change from this anti-business Government. It has nothing to do with administration cost recovery and all to do with pocketing money at the expense of the business sector. It totally overlooks the basic fact that all refunds relate to overpaid money-that is, money which the Commonwealth is not entitled to in the first place. As it is, the Customs Service does not alert people if they have inadvertently overpaid customs duty. That is the responsibility of the client and his customs agent. However, quite correctly, it will go to great lengths to collect unpaid or underpaid customs duty. The Government is placing an effective disincentive for those people who have erred on the side of overpayment to reclaim their lost moneys. As well, the commercial reality is that there is often confusion over the exact value, the exact amount or the exact type of goods being imported. The client or his agent will pay the highest rate of duty to ensure speedy delivery of cargo and applies for the refund at a later time when the exact value of the cargo is known. Now, because of this high fee, there will be a strong disincentive to clear the cargo quickly and efficiently.

As well, the Customs Act is extremely complicated. There will be extra, unfair pressure on staff and agents to ensure there is no accidental over- or underpayment of duty as the result is, in effect, a $200 fine for overpayment and substantial penalties for underpayment. The customer cannot win. I understand that the new, international harmonised tariff system is being introduced and it is inevitable that there will be some errors and teething problems before this scheme is up and running.

One of the many customs agents who have contacted the National Party concerned about this legislation outlined his individual situation. He says that many customs entries-approximately 1,500 a year-are inadvertently overpaid either through ignorance of the correct rate or confusion over the nature, quantity or value of the goods.

His firm lodges these applications, typically charging a fee for this service of $50. Under this legislation, the cost of processing a refund will rise to $250. This agent has checked his records and only about 50 per cent of refund claims exceed $250. So we will have a situation where at least half of the current refunds will not be worth pursuing when this $200 fee becomes law.

I put it to the House that this is an unfair and extremely regrettable situation. Small businesses, importers, customs agents and manufacturers are in effect to be punished for making an honest mistake. As well, we will have the unacceptable situation of the Commonwealth receiving revenue it is not rightly entitled to, at the expense of individuals in our community. The level of the charge, that is, $200, is rated far too high by customs agents. They point out that for a similar service they charge $50, a fee which customs agents associations believe the Government should charge also if it is determined to impose a fee. The top rate charged by the Australian Customs Service for its officers time in providing services such as cargo examination, surveys, et cetera, is $16.75 per hour. On this basis, Customs is now charging at a rate of almost 12 hours of officers' time. Surely, to check an overpaid entry and refund the balance does not take 12 hours. If it does, there should be a careful look at the Department's mode of operation. If the Government was genuinely introducing a user pays principle fee, $200 would be by far too high.

This fee is also retrospective in that it is to be imposed on goods lodged before the statement, when importers had no idea that an exorbitant $200 application fee was to be charged for refunds of overpaid duty. The National Party will be seeking to amend the legislation so that the fee applies only to those goods lodged for home consumption after 13 May 1987. The National Party can only assume that this is the manner in which the Treasurer will try to get the reverse on his J-curve. By making it so difficult--

Mr McGauran —And he's failing.

Mr BRAITHWAITE —It is his own failure, not only on that front but also on the economic front. Perhaps all of these issues, one by one, are designed to give an extra twist to the J-curve, which at present is at Z-level.

Mr DEPUTY SPEAKER (Mr Drummond) —Order! It being past 12.45 p.m., the debate is interrupted, in accordance with sessional order 101a. The resumption of the debate will be made an order of the day for a later hour this day.

Sitting suspended from 12.48 to 2 p.m.