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Thursday, 27 June 1996
Page: 2377

Senator COOK(1.39 p.m.) —With the confusion that has reigned here, I wonder if, by leave or by some other device, I can speak briefly to my amendments.

The TEMPORARY CHAIRMAN — Yes, you can speak.

Senator COOK —Thank you, Mr Temporary Chairman. This bill started out with very clear understanding all around, but it has now come down to a degree of confusion. I have to apologise for that outcome to those with whom I have discussed this over the last few days. I must say that I feel that keenly.

These amendments, however, are—in view of the changes the government made just now to the bill during the committee stage—also necessary to be made. As the minister has said, and rightly, they relate to policy by-laws. That is a description or a term that I am sure is clear to everyone. Policy by-laws, in case it is not clear, are a device in which, for a particular product, an application can be made to the minister and the minister can hold, for circumstances relating to that product, that a by-law should issue which would remove any tariff on the importation of that item.

What the act says about the scope of the ministerial discretion here is important. If the discretion is to take the tariff down to zero, then, of course, no tariff would be paid. But, if the act provides that it can go down to, as the present bill would provide, three per cent, then the ministerial discretion is crimped, so that the minister is not in a position of being able to remove all tariffs on an imported good. What this debate is centred around really is—if I might describe it this way—on the part of the Democrats, a view that all of the tariff concession orders should remain intact and that this bill is not necessary at all. I think that is largely the sentiment of the Greens too.

On behalf of the opposition, what this debate has been about is removing the extension by the government away from the concession orders to consumer items and imposing a three per cent tariff—that is to say, a three per cent tax—on the importation of items for consumer consumption. The changes that the government has incorporated, in the face of the Senate's initial rejection of its proposal, have accommodated to a large extent, but not entirely, the concerns of the opposition but, in my understanding, not the concerns of the Democrats and, I think, not the concerns necessarily of the Greens. So that is the background against which these amendments come.

The decision here, though—if, as I hope, our amendment is supported—is for ministerial discretion to be allowed on three areas which are vital inputs to industry and on which, if a case is made under a by-law application, the minister can grant a by-law, meaning that that particular item can come into Australia without a tariff at all. As the bill stands, it could come in with a minimum three per cent tariff. Those items that we have earmarked are quite important items.

There are three areas. The first one concerns machine tools for working advanced metals. That is item 55. The reason why we have put that up is that machine tools for working advanced metals are a high piece of technology. Australia, as an increasingly sophisticated manufacturing country, requires this technology. It is not made in Australia. If it is imported, then a tariff will have to paid on it. So, the cost of that technology being imported as an enabling technology for the development of our industry will be higher than it would otherwise be, simply because the government wishes to recoup revenue and impose a tax on industry inputs.

We would argue that machine tools for working advanced metals, item 55, ought to be included. That would, in addition, reflect the extension of the Bounty (Machine Tools and Robots) Act to cover these items. Under the Customs Tariff Amendment Bill (No. 1), the concessional rate will increase from zero to three per cent.

The other two areas are high-performance raw materials and intermediate goods. This is item 57. They would be chemicals, plastics and paper used in production which offer a performance advantage over substitutable goods produced in Australia. Under the Customs Tariff Amendment Bill (No. 1), the concessional rate will increase from the zero that it currently is to three per cent. That is why it needs to be amended.

The third area is high performance food packaging materials, item 60. These, basically, are metal materials and goods which offer a performance advantage over similar goods produced in Australia. Under this bill, the concessional rate would be increased from zero to three per cent.

In these three areas—machine tools for working advanced metals, high performance raw materials and intermediate goods, and high performance food packaging material: items 55, 57, and 60, respectively—the effect of this bill would be to increase the concessional rate from zero to three per cent. We believe it should be at zero, and that if a case can be made sparking ministerial discretion to be exercised, then it is quite proper that the minister should have the scope to go down to zero.

These are strategic industry sectors for Australia. These are sectors in which it is important for Australia to obtain a greater comparative advantage. These are sectors of growth in the Australian economy and they reflect the higher technological expertise of the Australian workforce. To tax them is to try and stunt their growth at the very time in which it is essential to the economy that we grow our manufacturing base, and that we grow it competitively. So it is a very odd thing for the government to do and we believe that if the bill stood, there would be a massive outcry from Australian industry, which would reject the government's action.

We want to mark the spot that we are not in favour of that. We believe that these amendments should carry. I believe these amendments reflect, indeed, as I understand it, the intent of the position put by the minor parties in this debate. I have to say immediately, so that I do not misrepresent their position, that it does not reflect their entire case, but it reflects part of their case. I would hope, too, that they might find a way in which they can support these amendments. I commend them to the Committee.