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Tuesday, 11 April 1972
Page: 1425


Mr CHIPP (Hotham) (Minister for Customs and Excise) - in reply - This is a relatively minor Bill which aims at closing a loophole that enables the evasion or the avoidance of tariff duty on goods being imported into Australia and gives the Minister for Customs and Excise power to determine the valuations. Due to your great generosity, Mr Deputy Speaker, almost everything else but that has been covered in the debate. I agree that you have been generous, and thank you for it, because I think most honourable members would agree that the opportunities for tariff debates in this House are far too few and the interest taken in them is far too little. Therefore I will try to answer as best I can the many and varied problems that have been raised during the debate by honourable members. The honourable member for Sturt (Mr Foster) sent me a telegram concerning this matter, to which I have replied. I have had a discussion with him personally about it. At the last discussion I had with him I asked him to give me specific cases of hardship - which, to the best of my knowledge, I have not received to this point. I presume that the honourable member for Sturt is referring to the Government's motor vehicle plans. It was quite novel to hear someone criticise the Government's motor vehicle plans as causing unemployment. I have heard a good deal of criticism outside and inside this Parliament of the Government's motor vehicle plans but I would have thought that about the last accusation that could have been made against them was that they are causing unemployment in Australia.

The honourable member for Sturt would know that the whole philosophy of the plans is to try to increase local sourcing - local content - and the Government's plans virtually say philosophically to motor vehicle manufacturers: 'If you have a local content of X per cent - 65 per cent or 85 per cent - we will hold the carrot in front of you' - I hope honourable members will forgive that term - 'to get to that target by giving you by-law entry for the remaining 15 per cent content of the car'. This carrot can be a very juicy inducement to many companies and has proved to be to such an extent that many companies are trying to reach these various levels. That of course means that those companies, in accordance with that plan, can then import the other 15 per cent of parts, if that is what is involved, duty free, while getting to a local content of 85 per cent. Before that, they may well have been down to 60 per cent local content. The net result of this is to increase local content using Australian materials and labour and making greater demands on the Australian workforce to the difference between what they were doing and what it is now doing under the new plan.

It may well be that one industry or a set of factories in the electorate of the honourable member for Sturt or in his knowledge have been disadvantaged by these plans. That may well be possible but I can assure him that, overall, the net result has not been to cause unemployment in Australia. However, I do repeat, and I say this in all good faith, that if the honourable member for Sturt has a specific case where he believes that some injustice has been done in that a doubtful decision has been given, the Government's plans have not been adhered to or some other inequity has occurred, I would be delighted to look at the matter in depth with my Department. If it is not my responsibility, as it probably would not be because the Department of Customs and Excise only administers the motor vehicles plans on behalf of the policy department - the Department of Trade and Industry - I would be pleased to refer those specific inquiries to my colleague, the Minister for Trade and Industry (Mr Anthony).

A great deal has been said about the extent of arbitrary powers of the Minister for Customs and Excise, and, of course, the powers of his officers which he necessarily must delegate in many cases. All I can say is that I am deeply conscious of the repsonsibility of the possession of those powers and I can undertake that my officers similarly are charged with that sense of responsibility. The tariff is a complex matter but at its simplest, after the Parliament has accepted the tariff, it provides 2 variables. One is the value to be ascribed to goods and the rates of duty to be applied to that valuation. Sometimes difficulties arise over the identification of goods and in establishing what classification they should come under. I do not know whether it still applies, but before simplification, which we instituted a short time ago, there were 27 different items of pencils in the tariff schedules and on many occasions identification of the specific item to be imported was difficult. Hence, the tariff classification now gives the rate. That tariff classification is based on the Brussels nomenclature and the rates are derived mainly from the Tariff Board recommendation and the decisions of this Parliament.

The honourable members for Lalor (Dr J. F. Cairns) and Wakefield (Mr Kelly) raised again the question of powers and the use of them in relation to the administration of by-laws. As the honourable member for Wakefield would know, the Minister for Customs and Excise has other powers concerning classifications, separate articles, directions, parts directions, substitute notices and a whole host of others. These essentially are published in the Gazette. I know that the honourable member for Wakefield, with his intimate knowledge of tariffs, can immediately retort that that really does not put them on the table of the House of Parliament where they can be understood by all and debated. I would concede his retort if he did feel that way inclined but I again ask - this matter is under constant review by me and my senior officers - what is the practical solution? In 1970-71 we actually made 21,817 decisions on by-law applications. Obviously it would be bringing the Parliament into chaos if we brought in here for debate something like 22,000 by-law decisions. The number of applications for by-law admissions approved was 17,372 and we refused admission for 4,445 applications. As the honourable gentleman knows, an additional member was recently appointed to the Tariff Board. This may meet the honourable member half way. I would dearly love to be able to send certain difficult by-law matters to an independent arbiter such as the Tariff Board which could develop some sort of case history or basic philosophy on the question of by-law admission.

Some of the problems can be very difficult. The by-laws essentially say that if there is a suitable equivalent of an item reasonably available in Australia - they are the 4 magical words to the Customs Department - the Department refuses by-law admission. But what is a suitable equivalent? What is 'reasonably available'? One can enter into fascinating philosophical discussions on what is a suitable equivalent. Is a Holden motor vehicle a suitable equivalent for a Rolls Royce. The Lord Mayor of a city might well argue that it is not, but a person who wants to get from point A to point B might well argue that it is simply a means of transport. If I may take the time of the House for a minute, I remember a classic case which involved grand pianos. Upright pianos are manufactured in Australia but grand pianos are not manufactured in Australia or at the time this decision was taken they were not. Somebody wanted to bring in a grand piano. Is an upright piano a suitable equivalent? Here we come into the fascinating area of end use. If it were the Bandywallop symphony orchestra which made the application for the importation of the grand piano or if the application were made by some of the country friends of the honourable member for Wakefield who grouped together and formed themselves into a philharmonic society, one could argue reasonably that for them an upright piano would be a suitable equivalent. However, if an Australian concert pianist wanted to import a grand piano, perhaps he could reasonably argue that in those circumstances an Australian made upright piano would not be a suitable equivalent. So, difficulties do exist and we are hopeful that the new member of the Tariff Board will be able to examine individual cases, make a decision and build up a case law and, of course, that would be exposed on the table of the House. Perhaps that meets the honourable member for Wakefield's point to some extent.

I also appreciate that the Minister for Customs and Excise has great power to alter the tariff. I agree with the honourable member for Lalor that sometimes a decision by the Minister or by his officers in fact can alter the wishes of Parliament by altering classifications and so on. But when we come to laws we find that they are so specific. I have given one illustration to show that sometimes, although words in the English language might appear to mean something, when we come to interpret them in the light of real life situations they get us into a bind. Therefore discretion is necessary. I would have thought that, looked at in the other way, unless the Minister for Customs and Excise is given the power of discretion the spirit and the true meaning of the wishes of this Parliament and the Tariff Board could not possibly be implemented because there would be so many clever people who would grab on to a form of words to avoid tariffs and evade the wishes and will of the Parliament.

Like the honourable member for Wakefield I listened again to every word of the honourable member for Lalor, hoping that, on this occasion when we had limited time for debate and when we were considering a simple Bill, we would get some clue as to Labor's policy on tariffs. At least I-


Mr Foster - It is too restrictive.


Mr CHIPP - The honourable member did not seem to be particularly restrictive in what he had to say. My friend and I listened in vain. We had a form of words that the Labor Party would give protection to efficient industries on measureable Australian standards. I wish that the honourable member would tell me what that meant. He then said that the Labor Party would use the tariff in respect of protected industries to ensure that excess prices were not being charged. I listened carefully to my friend from Wakefield who said: 'Well, this Parliament has not got the constitutional powers to do that'. I think that he believed that if the honourable member for Lalor ever became the Minister for Trade and Industry or the Minister for Customs and Excise there would not be much fear that he could use price control vis-a-vis the tariff. I do not share his confidence. I would think that a Labor government could do this without constitutional powers.

Perhaps I could give honourable gentlemen an example. If the honourable member for Lalor were Minister for Trade and Industry and took a set against one particular company which in his view was charging too high a price for a certain commodity-


Mr Foster - That is ridiculous.


Mr CHIPP - Then I wish the honourable member for Lalor would explain it to us, my dear friend. If the honourable member for Lalor took the view that a certain industry was charging a price which he did not like, he could do one of several things, not the least of which would be to amend the relevant schedule of the Tariff Act and decrease protection for that particular tariff item. He would not need necessarily a Tariff Board report to do this. But before he took this action he would go up to the company and say: 'Look here, I think that your prices are too high'.


Mr Foster - This is all assumption on your part.


Mr CHIPP - He would then say: 'If you do not reduce the price to a level which I believe to be credible I am going to get my Party to use its numbers in the Parliament to reduce the tariff on your level'.


Mr Kelly - This is a frightening picture.


Mr CHIPP - I hope now that I have removed the assurance of my honourable friend that a Labor government would not need constitutional powers to bring about this carrot and stick way of standing over business and implementing price control through the back door. My friend the honourable member for Sturt interjected to say that this was my assumption of how the Labor Party would act. Of course it is my assumption because that is all I can do. We have listened in vain for the honourable member for Lalor to say something concrete so that we do not have to make assumptions. We have interjected on the honourable member, with courtesy and dignity of course, until we are hoarse to try to elicit further information. However, our efforts have been to no avail.

Finally I would like to refer to the last 2 matters that were raised by the honourable member for Wakefield. When the honourable member raised the matter of 'to the nearer dollar' about 2 or 3 weeks ago I immediately sent a memorandum to my Department. This is not as easy as it looks. The matter is under investigation in depth as indeed is the other matter relating to the c.i.f. - cost, insurance freight - vis-a-vis f .o.b. Mr Deputy Speaker, thank you too for your generosity to me in giving me the opportunity of replying to most of the matters raised in the debate.

Question resolved in the affirmative.

Bill read a second time.







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