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Thursday, 5 December 1985
Page: 3051


Senator CHANEY (Leader of the Opposition)(4.46) —The Senate is now debating the three Customs Bills which are before us-the Customs and Excise Legislation Amendment Bill (No. 2) 1985, the Customs Tariff Amendment Bill (No. 2) 1985 and the Customs Undertaking (Penalties) Amendment Bill 1985-along with a number of sales tax Bills which are effectively consequential to the provision in one of the Bills which provides for inward duty free shopping. The Opposition is happy to deal with the matters together, the only really contentious issue in the Bills being the issue of duty free shopping, with respect to which the Opposition proposes to move amendments. The Bills which are before us contain a very large number of fairly disparate elements which could be grouped together as amendments to industry assistance arrangements, amendments to various Customs arrangements and the introduction of inward duty free shopping, to which I have already referred.

The Customs Tariff Amendment Bill (No. 2) is very detailed and makes numerous changes to the principal Act. If I may touch on a few of those changes, it removes, for example, provisions for temporary assistance. This is simply a tidying up procedure and is the result of changes to the charter of the Industries Assistance Commission following the Uhrig Review of the IAC. There are new rules for the definition of rules of origin to facilitate products from Forum Island countries. Again, it will not make a substantial impact on Australian trade; but it is a matter of importance to those Forum Island countries of the Pacific. There is an amendment to the description of rum which has arisen as a result of the Government's acceptance of the recommendations of the review of wines and spirits legislation conducted by the National Health and Medical Research Council. Rather more significantly, there is the implementation of decisions on metal working machine tools and robots, heavy commercial vehicles and agricultural wheeled tractors. In respect of those matters there have been other opportunities to debate the policy issues involved. I do not intend to touch on them today because of the lateness of the session and because there have been other opportunities to debate the issues which properly arise with respect to the Government's decisions in that area.

I wish to raise with the Minister for Industry, Technology and Commerce (Senator Button) a point with respect to tariffs on metal working machine tools and I will return to that a little later. The Bills also relate to Budget decisions to increase the excise on tobacco and restore levels of assistance for certain goods, the levels of assistance for which have been reduced as a result of Administrative Appeals Tribunal decisions. If I may refer to the metal working machine tools point and the amendments in relation to the AAT rulings, the tariff on certain imported parts and accessories under this Bill is to increase from minimum rates of 2 per cent to 25 per cent. In the House of Representatives the Opposition moved an amendment in relation to this provision. However, after further discussion with the Government we will not put forward this amendment in the Senate, as the major manufacturer has confirmed its preparedness not to oppose tariff concessional order applications and has indicated a general commitment to co-operation in that area. All that I would seek with respect to the amendment that was moved in the House of Representatives is a commitment from the Minister that the Government will expedite any applications for commercial tariff concessions which affect spare parts which are not manufactured in Australia. I understand that there is no difficulty in the Minister giving that commitment to deal with applications expeditiously. We will not pursue an amendment with respect to those parts of the Bill.

The matter which I wish to address principally and which will be the subject of further comment by Senator Puplick, who will be speaking in this debate, relates to the amendments to the Customs and Excise Act which provide for inward duty free shopping. This is also referred to in the Sales Tax Bills, as I said before. We will oppose those Bills if we successfully see the removal of the provisions relating to inward duty free shopping.

The only other matter which I would like to refer to before I deal with inward duty free shopping is the rebate on the diesel fuel excise. That has the very strong support of the Opposition. I simply wish to remind the Senate that we moved an amendment in the Senate on 21 May 1985 to achieve this rebate. The Government resisted that amendment. I note that Senator Button was extremely sceptical at that time about the assistance that the proposed change would provide for the primary producers we were seeking to assist. In May 1985 Senator Button said:

The problems of the wheat growers of Western Australia or the sugar growers of Queensland are not susceptible to the easy solutions suggested in Senator Chaney's speech that if we fix up the diesel fuel rebate, we have gone some way towards solving their problems.

I interjected at that point and said:

They could think it was very helpful.

I am delighted that over the succeeding months Senator Button obviously has come to the same view, and the Government has made this important concession to primary producers. Let me say now that the Government has made this concession that I join with Senator Button in saying that it is certainly no total answer to the very serious difficulties that those primary producers face, but I am sure that the additional concession is one which will be welcomed by them. The Opposition supports this change which has been put forward in the Budget. It regrets that the change could not be wider, but believes that the sections of the community which will benefit from that extended concession warrant the relief which has now been provided.

The only other thing I wish to say on this matter is to remind the Senate that those primary producers had a full fuel rebate until the 1983 Budget, and it was this Government's action in indexing the fuel excise and not indexing the rebate which opened up a gap which persisted over the next two financial years. We think that that was undesirable in principle. We suggest to the Government that where it considers an industry is entitled to an excise rebate it should be given the full rebate rather than the partial rebate which has applied over recent years. We think that would make for a tidier arrangement and also for a more rational one.

There is a good deal of material in the form of submissions which were made to the IAC on the pluses and minuses of inward duty free shopping. The Opposition is not opposing in principle the idea that there should be inward duty free shopping, although I do raise the question of what precisely is the logic in providing additional shopping concessions for those Australians who are fortunate enough to travel overseas. It does appear to me that we have come quite a long way from what I would have thought was the original rationale behind those general concessions; namely, that people who were overseas were likely to make some purchases and that they might be given some concessions on their return to Australia. There is now such a range of opportunities to pick up concessions that, effectively, we seem to be providing additional cheaper shopping possibilities for those Australians who are fortunate enough to be able to go overseas.

Having looked at the arguments put forward by the Treasury and by others with respect to the pluses and minuses, the Opposition does not take a stance that inward duty free shopping should be opposed as a matter of principle. In the lead-up to the last election, as part of our aviation policy, we did commit ourselves to inward duty free shopping. I make that quite clear. We are, however, particularly concerned about one aspect of the proposal, and that is the extent to which it will lead to a weakening of the barrier control which is imposed by the Australian Customs Service to prevent the illicit entry into Australia of goods on which duty has not been paid or, more importantly in this context, the illicit introduction of drugs into Australia.

It is quite clear that there are concerns within the Customs Service about the further insertion of people between the point of exit from an aircraft and the Customs barrier. The proposal which the Government has put forward will mean that more individuals will be coming to work behind the barrier. There will be an opening up of opportunities for the transfer of goods from passengers to other people. Notwithstanding that, of course, there will be Customs supervision of the people who will work behind the barrier. It is undoubtedly true that the introduction of inward duty free shopping will simply add further complexities to an already complex situation within which control of drugs is a very real difficulty.

It is the intention of the Opposition to move amendments which would remove provisions from two of the Bills which are before us which relate to inward duty free shopping, and, as I evidenced in a notice of motion this morning, to send the relevant provisions off to a Senate standing committee for examination and report to the Senate. Our purpose is not to determine whether or not it is desirable as a matter of economics or of general policy to introduce inward duty free shopping. We do not propose at this stage to oppose the Government's policy in that regard. What we are saying is that we wish to have a careful examination of the doubts which have been raised by the Customs Service and which are reflected in the IAC draft report on passenger concessions about the effect of this proposal on barrier control. The IAC report states:

A number of submissions including Customs have expressed concern about difficulties which supermarket style inward duty free shops would pose for control of prohibited imports.

Part of the conclusion in the draft report of the IAC states that the Commission does not believe that inward duty free shopping helps to achieve any of the objectives proposed by those in favour of the arrangements. The Commission went on to say:

Indeed, the probability is that it would hinder Customs in processing passengers and achieving the other objectives of barrier control.

If there is any doubt in this matter, that doubt should be exercised in favour of delay and of referring this matter for inquiry by a Senate committee. It is reasonable that the Senate be quite satisfied that the changes proposed by the Government will not result in a further significant opening for the illicit introduction of drugs to this country, and we should have a very high degree of satisfaction about that matter before we are prepared to allow these provisions to pass.

I know that the Australian Democrats will be raising some other arguments relating to the advantages which will flow to Qantas Airways Ltd in not having grog on board the plane, and various other matters. To avoid double treatment, I will leave them to be dealt with by my colleague Senator Puplick. I wish to make it very clear on behalf of the Opposition that we do not believe that any commercial advantage should be taken in circumstances where it may be possible for Australia to become more open to elicit drugs. We think that the balance in this matter is quite clear and that no arguments relating to commercial advantage can carry any great weight in a proposal of this sort.

The argument relating to safety is likely to be raised, and Senator Puplick will address that matter also. I simply wish to say, as someone who flies on 200 or 300 flights a year, since I live a long way from Canberra, that the least of my fears is that I will be killed by a flying or flaming bottle. I suspect that, if I run the risk in flying, along with my fellow passengers, that risk is very minimally increased by the carriage of alcohol on flights. Given that commercial flights invariably carry large quantities of alcohol for the consumption of passengers, that there are inevitably large amounts of alcohol in evidence on aircraft and that it may well lead people who have bought alcohol and carried it on to the aircraft-which they are entitled to do-to feel free to drink it on the aircraft, knowing that they can replenish their supplies on arrival, I can only say that that is a very marginal argument. Again, it is one that I do not think should carry too much weight with us.

I know that serious consideration has been given already by the Democrats to the proposition the Opposition is putting forward, but I say to them with great earnestness that a few months delay with respect to this proposal for inwards duty free shopping is a very small price to pay for a high element of certainty that we are doing our duty with respect to the question of barrier control. Having said that, I commend the rest of the legislation to the Senate and indicate the Opposition's support for it.