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526-EM
1996-97
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
CUSTOMS TARIFF AMENDMENT BILL (No. 2) 1997
EXPLANATORY MEMORANDUM
(circulated by authority of Senator Cook)
Customs Tariff Amendment Bill (No. 2) 1997
Outline
The purpose of the bill is to alter certain provisions of the Customs Tariff Act 1995 which deal with the tariff on passenger motor vehicles and certain motor vehicle parts.
At present the Act provides for a progressive reduction in certain rates of tariff. The relevant provisions now provide for rates of 15% from 1 January 2000. They contain no provisions as to how long that rate will apply, but it has been proposed that the rates should be reduced to negligible rates by 2004.
The purpose of this bill is to provide a level of certainty to both employers and employees in Australia’s motor vehicle and components industry by providing that the tariff should remain at 15% until at least 31 December 2004.
This measure is a key element in the future development of Australia’s automotive industry. It will allow the industry some degree of stability so that it can consolidate over the period to the year 2005. The policy provides that a comprehensive review of the industry’s position be undertaken in 2003 so that decisions can then be made in light of this review as to the appropriate level of tariff to apply from 1 January 2005.
Other elements necessary to complement this measure are a commitment to maintain Australia’s obligations under APEC; the establishment of a transparent measure by which the progress of Australia’s trading partners in reducing their tariff and non-tariff barriers can be judged; a commitment to the continuation of measures designed to enhance the industry’s integration into the global marketplace (administrative arrangements to be designed to ensure the measure is consistent with Australia’s WTO obligations), continuation of the duty-free allowance to support domestic market value adding, and a commitment to measures to ensure a more supportive industrial research and development environment.
Notes on clauses
Clause 1
Short title Customs Tariff Amendment Bill (No. 2) 1997
Clause 2
Commencement The clause provides for the Act to commence on the day on which it receives Royal Assent.
Clause 3
Schedules This clause provides that the Customs Tariff Act 1995 is amended as set out in Schedule 1.
Schedule 1 This Schedule provides for amendment to the Customs Tariff Act 1995 by providing that the 15% rate of tariff to apply from 1 January 2000 will continue at least until 31 December 2004. The various items deal with particular subheadings of the tariff as follows:
Item 1 This item provides for the changes in respect of spark-ignition reciprocating or rotary internal combustion piston engines with a cylinder capacity greater than 250 cm 3 but not exceeding 1000 cm 3 for use in the assembly or manufacture of passenger motor vehicles.
Item 2 This item provides for the changes in respect of spark-ignition reciprocating or rotary internal combustion piston engines with a cylinder capacity exceeding 1000 cm 3 for use in the assembly or manufacture of passenger motor vehicles.
Item 3 This item provides for the changes in respect of other engines for use in the assembly or manufacture of passenger motor vehicles.
Item 4 This item provides for the changes in respect of diesel or semi-diesel engines for use in the assembly or manufacture of passenger motor vehicles.
Item 5 This item provides for the changes in respect of passenger motor vehicles, including station wagons, with a cylinder capacity not exceeding 1000 cm 3 .
Item 6 This item provides for the changes in respect of passenger motor vehicles, including station wagons, with a cylinder capacity exceeding 1000 cm 3 but not exceeding 1500 cm 3 .
Item 7 This item provides for the changes in respect of passenger motor vehicles, including station wagons, with a cylinder capacity exceeding 1500 cm 3 but not exceeding 3000 cm 3 .
Item 8 This item provides for the changes in respect of passenger motor vehicles, including station wagons, with a cylinder capacity exceeding 3000 cm 3 .
Item 9 This item provides for the changes in respect of other vehicles with compression-ignition internal combustion engines (diesel or semi-diesel) of a cylinder capacity not exceeding 1500 cm 3 .
Item 10 This item provides for the changes in respect of other vehicles with compression-ignition internal combustion engines (diesel or semi-diesel) of a cylinder capacity exceeding 1500 cm 3 but not exceeding 2500 cm 3 .
Item 11 This item provides for the changes in respect of other vehicles with compression-ignition internal combustion engines (diesel or semi-diesel) of a cylinder capacity exceeding 2500 cm 3 .
Item 12 This item provides for the changes in respect of other vehicles with compression-ignition internal combustion engines (diesel or semi-diesel).
Item 13 This item provides for the changes in respect of chassis fitted with engines for use in the assembly and manufacture of passenger motor vehicles.
Item 14 This item provides for the changes in respect of bodies for use in the assembly or manufacture of passenger motor vehicles.
Item 15 This item provides for the changes in respect of gearboxes for use in the assembly or manufacture of passenger motor vehicles.
Item 16 This item provides for the changes in respect of drive axles with differential (whether or not provided with other transmission components) for use in the assembly or manufacture of passenger motor vehicles.
Item 17 This item provides for the changes in respect of clutches and parts thereof for use in the assembly or manufacture of passenger motor vehicles.
Item 18 This item provides for the changes in respect of chassis and parts thereof for use in the assembly or manufacture of passenger motor vehicles.
Item 19 This item amends item 41A of Schedule 4. Item 41A allows for amounts of duty otherwise payable in respect of goods (vehicles) classified under subheadings under headings 8702, 8703 or 8704 (including replacement components) imported by the owner of a determination under the existing Export Facilitation Scheme (or any future WTO-consistent arrangement) to be reduced by the amount of any import credits issued to the owner of the goods. (The details of the operation of the scheme are provided for in administrative arrangements. These are to be designed in such a way as to be consistent with Australia’s international trade obligations.)
The amendment proposed by item 19 of this bill is to insert “before 31 December 2004” into item 41A, thus spelling out the intention that the arrangement, amended as necessary to ensure consistency with Australia’s international trade obligations, should remain in force at least until the end of 2004, with a further decision able to be made in light of the review proposed for 2003.
Item 20 This amendment parallels item 19 of the bill and applies the same change to existing item 41B of Schedule 4, which deals with components and provides for reductions in the amount of duty otherwise payable by the amount of any export credits issued to the owner of the goods.
The amendment made by item 20 inserts the words “before 31 December 2004” ( and see further explanation under item 19 above).