Bills Digest no. 149 2004–05
Customs Tariff Amendment Bill
(No. 1) 2005
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Customs Tariff
Amendment Bill (No. 1)
2005
Date Introduced: 10 March 2005
House: House of
Representatives
Portfolio: Justice and Customs
Commencement: Formal provisions of the Customs Tariff Amendment
Bill (No. 1) 2005 commence on Royal Assent. The measures
contained in the Bill have various commencement dates, which
are referred to in the Main Provisions section.
Mainly consolidating several
tariff proposals, the Customs Tariff Amendment Bill (No. 1) 2005
(the Bill) will make several changes to the Customs Tariff Act
1995 (Customs Tariff Act), including changes to the tariffs
for:
- oil and gas exploration equipment
- the herbicide Paraquat dichloride
- textile, clothing and footwear originating from the Forum
Island Countries, and
- alcohol and tobacco products originating in the United States
(US).
In addition, the Bill will make some technical amendments to the
Customs Tariff Act.
Several of the amendments proposed in Schedule 1 of the Bill are
based on changes contained in Customs Tariff Proposals. These
Customs Tariff Proposals initiate the imposition of customs duties
with the usually undebated proposal becoming, by convention, the
basis for the exaction.(1) The House of Representative s
Guidelines to Procedure (Procedure), notes that:
Periodically, tariff proposals are consolidated by a customs
tariff or excise tariff amendment bill, which incorporates the
provisions of the motions previously moved into the appropriate
Tariff Act. These bills are retrospective in operation to the date
on which collection commenced.(2)
This Bill is, in parts, such a consolidation of various Customs
Tariff Proposals.
The background to the individual measures is briefly addressed
in relation to the discussion of the Main Provisions.
The proposed amendment is based on changes moved as Customs
Tariff Proposal No. 6 (2003). The motion for this proposal was
moved on 16 October 2003 and commenced operation from 18 October
2003.(3) On 23 June 2004, the Government introduced the
Customs Tariff Amendment (Oil, Gas and Other Measures) Bill 2004 to
give the exaction a legislative basis.(4) This bill,
however, lapsed with prorogation of the 40th Parliament.
To safe the measure, a delegate of the Minister issued a notice
under section 273EA of the Customs Act 1901 whilst
Parliament was prorogued. As required under this section, the
proposed change was moved as item 3 of Schedule 1 of the Customs
Tariff Proposal No. 1 (2004) on 1 December 2004 or the sixth
sitting day after the notice was made.(5)
The amendment to the Customs Tariff Act will allow the duty-free
entry of certain goods prescribed by by-laws which are used in
connection with:
- the exploration for petroleum or natural gas, and
- the development of petroleum or natural gas wells in certain
circumstances.
In its 2003-04 Budget papers, the federal government explained
that the amendments are proposed to accommodate technological
changes.(6) The Explanatory Memorandum to this Bill
repeats this point.(7)
Item 1 of the Bill will repeal the current item
22 of Schedule 4 of the Customs Tariff Act and substitute it with
the proposed new item. After the substitution, certain goods used
for the oil and gas exploration as prescribed by by-laws can enter
Australia duty-free.
The provision will commence retrospectively on 18 October
2003.
According to the Financial Impact Statement contained in the
Explanatory Memorandum, this measure will cost approximately
$220 000 per year in duty foregone.(8)
The proposed amendment is based on changes moved as Customs
Tariff Proposal No. 1 (2003). The motion for this proposal was
moved on 27 March 2003 and commenced operation from 1 April
2003.(9) On 19 February 2004, the Government introduced
the Customs Tariff Amendment (Paraquat Dichloride) Bill 2004 to
give the exaction a legislative basis.(10) This bill,
however, lapsed with prorogation of the 40th Parliament.
A delegate of the Minister issued a notice under section 273EA of
the Customs Act 1901 whilst Parliament was prorogued. As
required under this section, the proposed change was moved as item
3 of Schedule 1 of the Customs Tariff Proposal No. 1 (2004) on 1
December 2004 or the sixth sitting day after the notice was
made.(11)
The amendment will remove the current five per cent import duty
imposed on the chemical herbicide Paraquat dichloride containing an
additive that causes vomiting if the herbicide is accidentally
ingested. These substances, called emetics, act as a safety
feature.(12) Currently, other forms of Paraquat
dichloride containing other safety features, for example stenching
agents or colourings, do not attract such a duty. Accordingly, the
measure will remove an anomaly in the treatment of Paraquat
dichloride.
Items 2 and 3 of the Bill will
amend Schedule 3 (Classification of goods and general and special
rates of duty) of the Customs Tariff Act, stipulating that Paraquat
dichloride containing an emetic for safety reasons is
duty-free.
The provision will commence retrospectively on 24 March 2003.
This retrospective commencement date for the proposed legislation
will precede the commencement date for the Customs Tariff
Proposal No. 1 (2003).
The proposed amendment is based on changes proposed in
Customs Tariff Proposal No. 1 (2004). The motion for this
proposal was moved on 1 December 2004 and it commenced operation on
1 January 2005.(13) The changes are based on an
announcement made the Prime Minister, the Hon. John Howard, on 8
August 2004 during a doorstop interview in
Samoa.(14)
The amendment will extend the preferential duty-free status for
certain textiles, clothing and footwear products originating from
the Forum Island Countries covered by the South Pacific Regional
Trade and Economic Co-operation Agreement (Textile, Clothing and
Footwear Provisions) Scheme (SPARTECA (TCF Provisions) scheme) for
another seven years.(15) The scheme was to expire on 31
December 2004 and will now end on 31 December 2011.
Item 4 of the Bill will substitute the current
end date in item 68 of the Customs Tariff Act 1995 with the new end
date 2011 for the duty-free status of the covered goods to reflect
the extension of 7 years.
The provision will commence retrospectively on 1 January
2005.
The Australian government granted the Forum Island Countries
preferential access to the Australian market with respect to
certain textiles, clothing and footwear originating from these
countries. This support has been described as important for the
region. For example, it was noted that
SPARTECA was critical, for example, to the birth of the textile
and garment industry in Fiji and the survival of small export
sectors in most of the islands.(16)
However, there has also been some criticism of the scheme as it
allegedly supports and protects inefficient local industries,
keeping those industries alive at the discretion of the Australian
government and its foreign policy.(17)
According to the Financial Impact Statement contained in the
Explanatory Memorandum, this measure will cost approximately
$1.2 million per year in duty foregone. (18)
The amendments proposed in items 5 and
6 of the Bill make technical amendments to the
Customs Tariff Act with respect to the country abbreviations for
Poland and Wake Island.
The proposed amendment is based on tariff changes proposed in
Customs Tariff Proposal No. 1 (2004) which commenced
operation on 1 January 2005, immediately after the commencement of
the Australia-US Free Trade Agreement.
The amendment will change the duty rates for products including
alcohol and tobacco products that originated in the US in line with
an increase in the Consumer Price Index in August 2004. The result
of the amendments will be a tariff harmonisation between alcohol
and tobacco products originating in the US and in other
countries.(19)
Items 7 to 59 of the Bill will change the duty
rates for products including alcohol and tobacco products that
originated in the US in line with increase in the Consumer Price
Index.
The provision will commence retrospectively on 1 January
2005.
The proposed amendment is based on changes proposed in
Customs Tariff Proposal No. 1 (2005) which was gazetted
under section 273EA of the Customs Act on 31 January 2005 to take
effect from 1 February 2005. The proposal was subsequently tabled
in Parliament on 16 February 2005.(20)
The amendment will change the duty rates for alcohol and tobacco
products originating in the US in line with an increase in the
Australian Consumer Price Index in the last quarter of
2004.(21)
Items 60 to 112 of the Bill will change the
duty rates for products including alcohol and tobacco products that
originated in the US in line with increase in the Consumer Price
Index.
The changes will commence retrospectively on 1 February 2005.
They will ensure that the rates applicable to alcohol and tobacco
goods originating in the US are tariffed at the same tariff rates
as similar products originating in different
countries.(22)
Concluding Comments
As noted above, Customs Tariff Proposals initiate the imposition
of customs as usually undebated measure which becomes, by
convention, the basis for the exaction until the measure is
properly enacted.(23) The exaction of monies without a
legislative basis, however, is contrary to established
constitutional principle. Professor Ratnapala has argued that:
The executive government cannot impose taxes except under the
authority of an Act of Parliament. This is not expressly stated in
the Constitution, but is an application of the most fundamental
rule of constitutionalism and indeed the basic proposition of every
constitution properly so called.(24)
With this in mind and given that some of the Customs Tariff
Proposals date back to 2003, the question maybe asked how long
Customs Tariff Proposals may exist or be valid.
The rules governing Customs Tariff Proposals are contained in
the Customs Act 1901 (Customs Act). However, the Customs
Act does not stipulate how long a Customs Tariff Proposal may last
without implementing legislation. Only the House of Representatives
Practice (Practice) suggests that the lifespan of a proposal, and
therewith its validity, is limited to the periods set out in
section 226 of the Customs Act 1901. This provision
stipulates the circumstances and period of time during which
customs officers are immune from actions brought against them in
relation to the exaction based on the Customs Tariff Proposal. The
Practice states that a proposal may only be valid:
- until the close of a parliamentary session in which a customs
or excise tariff or tariff alteration is moved, or until the expiry
of 12 months, whichever happens first; or
- where a notice of a tariff proposal has been published in the
Gazette, under section 273EA of the Customs Act [ ], within seven
sitting days of the House or six months from the date of
publication of the notice, whichever happens first. Where the
details of the notice are subsequently proposed in the Parliament
within seven sitting days, the protection outlined in the [bullet
above] applies.(25)
This view is ultimately based on the possible enforceability of
the exaction without proper legislative foundation. However, this
is not the only possible interpretation of the above legislation
and the issue has not been comprehensively determined either by the
legislator or the judiciary.
- Department of the House of Representatives, House of
Representatives Practice , 4th edition, Canberra,
2001, p. 420.
- Department of the House of Representatives, Guide to
procedures , Canberra, August 1999, p. 73.
- The Hon. P. Slipper, Parliamentary Secretary to the Minister
for Finance and Administration, Customs
Tariff Proposal No. 6 (2003) , motion moved on 16 October
2003.
- No Bills Digest has been prepared with respect to this
bill.
- The Hon. G. Hunt, Parliamentary Secretary to the Minister for
the Environment and Heritage, Customs
Tariff Proposal No. 1 (2004) , motion moved 1 December
2004.
- The Hon P. Costello, Treasurer, and the Hon. N Minchin,
Minister for Finance and Administration, Policy Decisions taken
since the 2003-04 Budget Revenue Measures , Budget 2003-04, Midyear
Economic Forecast, Appendix
A, Canberra, December 2003.
-
Explanatory Memorandum to the Customs Tariff Amendment Bill
(No. 1) 2005, p. 6.
-
Explanatory Memorandum, ibid., p. 3.
- The Hon. P. Slipper, Parliamentary Secretary to the Minister
for Finance and Administration, Customs
Tariff Proposal No. 6 (2003) , motion moved on 16 October
2003.
- B. Bailey, Customs Tariff Amendment (Paraquat Dichloride) Bill
2004 , Bills
Digest, no. 96, Department of Parliamentary Library, Canberra,
2003-04.
- The Hon. G. Hunt, Parliamentary Secretary to the Minister for
the Environment and Heritage, Customs
Tariff Proposal No. 1 (2004) , motion moved 1 December
2004.
- The herbicide Paraquat Dichloride is highly toxic to humans,
especially when ingested orally. For further information see B.
Bailey, op. cit., p. 2 and Food and Agriculture Organisation of the
United Nations, FAO Specifications and Evaluations for Agricultural
Pesticides, Paraquat Dichloride , Report, Rome, 2003, available at
http://www.fao.org/WAICENT/FAOINFO/AGRICULT/AGP/AGPP/Pesticid/Specs/Pdf/Final_Paraquat_%20Specs_%202003.pdf,
accessed 14 March 2005.
- The Hon. G. Hunt, Parliamentary Secretary to the Minister for
the Environment and Heritage, Customs
Tariff Proposal No. 1 (2004) , motion moved 1 December
2004.
- The Hon. J. Howard, The Prime Minister of Australia,
Subject: Pacific Islands Forum; Australia s
role in the region; US Free Trade Agreement, Doorstop
interview, Samoa, 8 August 2004. See also: The Hon. J.
Howard, Fiji: Support For Textiles, Clothing And Footwear,
media
release, no. 1059, Canberra, 8 August 2004
-
Explanatory Memorandum, op. cit., p. 8.
- A. Yakabi, Australia s new foreign policy in the Pacific
region, speech
delivered at the Conference of the German Pacific Network, Hamburg,
26-27 November 2004.
- See, for example, with respect to the Fijian textile industry:
A. Oxley, Nursing Fiji to economic sickness , ITS Trade Reporter,
August 2004, available at
http://www.tradestrategies.com.au/docs/ITS_Trade_Reporter_August_2004.htm,
accessed 14 March 2005.
-
Explanatory Memorandum, op. cit., p. 3.
-
Explanatory Memorandum, op. cit., p. 10.
- The Hon. G. Hunt, Parliamentary Secretary to the Minister for
the Environment and Heritage, Customs
Tariff Proposal No. 1 (2005) , motion moved 16 February
2005.
-
Explanatory Memorandum, op. cit., p. 10.
-
Explanatory Memorandum, op. cit., p. 11.
- House of
Representatives Practice, op. cit. p. 420.
- S Ratnapala, Australian Constitutional Law, Foundations and
Theory , Oxford University Press, Melbourne, 2002, p. 242.
- House of
Representatives Practice, op. cit., p. 421.
? Copyright Commonwealth of Australia 2004
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Thomas John
10 May 2005
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ISSN 1328-8091
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