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Wednesday, 23 June 2021
Page: 1


Mr WOOD (La TrobeAssistant Minister for Customs, Community Safety and Multicultural Affairs) (09:34): I move:

That this bill be now read a second time.

The Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 will amend the Customs Tariff Act 1995 to implement the changes agreed to in the sixth review of the Harmonized Commodity Description and Coding System—the Harmonized System. The measures in this bill will ensure that Australia's customs tariff, which is based on the Harmonized System, reflects the changing patterns of international trade, the emergence of new technologies and the international will to regulate certain goods of concern.

The Harmonized System is a hierarchical system of four-digit and six-digit codes, legal notes and interpretative rules which enable the identification of any internationally traded goods. The World Customs Organization developed the Harmonized System to strengthen and support trade between countries with different trade regulatory arrangements. Australia is one of almost 200 countries that use the Harmonized System.

Australia's Customs Tariff Act 1995—the Customs Tariff Act—and the Australian Harmonized Export Commodity Classification implement the Harmonized System in Australia. These domestic instruments customise the structure of the Harmonized System to better identify goods that are of unique importance to Australia.

Every five years, the World Customs Organization reviews the Harmonized System. The purpose of these reviews is to update the Harmonized System's tariff headings and subheadings to better reflect changing patterns of international trade, for example, due to technological developments, changing volumes of trade, and the relative growth and decline in importance of certain goods.

Australia was an active participant in the World Customs Organization's sixth review of the Harmonized System. Through this process, Australia secured several priority changes that will benefit Australian industry, such as the development of new tariff codes for placebos for clinical trials and virgin olive oil. The outcome of the review, accepted by World Customs Organization member countries in early 2020, makes approximately 350 amendments to the Harmonized System. Australia is committed to fulfilling its international obligation to implement these changes by 1 January 2022.

The Harmonized System is of critical importance to Australian traders and industry. Ensuring that Australia's tariff is consistent with the international Harmonized System used by our trading partners is an important part of the government's support for our importers and exporters.

This bill will make amendments to the legal notes and four-digit to eight-digit tariff codes in the Customs Tariff Act. It will remove tariff subheadings in schedule 3 of the Customs Tariff Act, where the goods classified to these subheadings are no longer traded in sufficient volumes, such as world globes and answering machines. The bill will insert new tariff subheadings to reflect the development of certain new technologies, such as smartphones, drones and hybrid and electric vehicles. It will also insert new tariff subheadings to accommodate the increased trade of other goods, such as insect-based food products.

Other proposed changes in the bill will enable improved monitoring of the trade in particular goods. For example, the insertion of new seven-digit and eight-digit tariff subheadings and changes to the wording of notes and additional notes in schedule 3 will enhance international monitoring of the global trade in wood products, cultural articles and goods for use in e-cigarettes and vaping. Similar amendments will enable easier identification and monitoring of goods that are the subject of international agreements, such as synthetic diamonds, certain chemicals and dual-use goods.

The amendments proposed under this bill will preserve existing rates of customs duty for the majority of goods. There are exceptions to this general approach for three categories of goods: flat-panel display modules, semiconductor based transducers and electronic waste and scrap. The bill will simplify the tariff classifications of these three categories of goods, so they are no longer required to be imported under multiple tariff classifications that may have different rates of customs duty. Instead, each of these categories of goods will have new dedicated tariff subheadings and will apply a 'free' rate of customs duty.

Where there are changes to tariff subheadings in schedule 3 of the Customs Tariff Act, this bill will reflect such changes in relevant schedule 4 concessional items. This approach will ensure that goods currently eligible for concessional treatment continue to be able to access a 'free' rate of customs duty.

Finally, the bill will amend schedules 4A to 13 of the Customs Tariff Act, to reflect the insertion of new subheadings in schedule 3 that have a duty rate other than 'free' under Australia's 14 established free trade agreements.

To implement the changes made by the sixth review of the Harmonized System, the government will also amend the Customs Act 1901 through the Customs Amendment (2022 Harmonized System Changes) Bill 2021.

Debate adjourned.