Bills Digest no. 28 2015–16
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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.
Rob Dossor
Economics Section
12 October 2015
Contents
Purpose
of the Bills
Structure and commencement of the Bills
Important definitions
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issue
Key provisions
Concluding comments
Date introduced: 16
September 2015
House: House of
Representatives
Portfolio: Immigration
and Border Protection
Commencement: See
page two of this Bills Digest.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the Bill’s
home page for the Customs
Amendment (Fees and Charges) Bill 2015, the Customs
Depot Licensing Charges Amendment Bill 2015 and Import
Processing Charges Amendment Bill 2015, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the three Bills discussed in this Bills
Digest form a package that seeks to implement part of the Government’s response
to the Joint Review of Border Fees, Charges and Taxes (the Fees Review) by adjusting
import processing charges and enabling full recovery of custom broker licence
charges and import processing costs.[1]
Each of the three Bills in the legislative package has one
Schedule.
The Customs Amendment (Fees and Charges) Bill 2015 (the
Fees and Charges Bill) amends the Customs Act 1901 by changing the
warehoused goods declaration fees and establishing circumstances when new
warehouse licence charges and customs broker licence charges are payable.[2]
Sections 1 to 3 of the Fees and Charges Bill commence on Royal Assent. Schedule
1 commences at the same time as Schedule 1 to the Customs Depot Licensing
Charges Amendment Bill 2015 (see below).
The Customs Depot Licensing Charges Amendment Bill 2015
(Depot Licensing Bill) amends the Customs Depot Licensing Charges Act 1997
by modifying warehouse licence applications charges and customs broker licence
charges.[3]
Sections 1 to 3 of the Depot Licensing Bill commence on Royal Assent. Schedule
1 commences on 1 January 2016.
The Import Processing Charges Amendment Bill 2015 (Import
Bill) amends the Import Processing Charges Act 2001 by increasing and rationalising
import processing and warehouse charges.[4]
Sections 1 to 3 of the Import Bill commence on Royal Assent. Schedule 1
commences on 1 January 2016.
Warehoused goods declaration fee
Warehoused goods are goods that have been imported into
Australia and are being held in a customs warehouse before being released for
home consumption. Section 71BA of the Customs Act prescribes that ‘an
owner of warehoused goods who makes an import declaration in respect of the
goods is liable to pay a fee (the warehoused goods declaration fee) for the
processing of the declaration’.[5]
Warehouse licenses
Warehoused goods can be stored in either a licensed
warehouse or a customs depot. Part V of the Customs Act provides that a
person or partnership can be licensed to operate a warehouse, while Part IVA of
the Customs Act provides that a person or partnership can be licensed to
operate a depot. The main difference between a licensed warehouse and a customs
depot is that warehouses are used for longer term storage of goods.[6]
Customs broker licenses
A customs broker is a person licensed under section 183C
of the Customs Act to comply with the provisions of or requirements
under the Customs Act on behalf of the owner in relation to those goods.[7]
The Department of Immigration and Border Protection (DIBP) processes and
assesses applications for customs broker licences.[8]
Import processing charges
Import processing charges have been applied since 1997.
They fall into two categories:
- import
declaration processing charges which are imposed by section 71B of the Customs
Act and
- warehouse
declaration processing charges which are imposed by section 71DI of the Customs
Act.
For more information on Import Processing Charges see the
Bills Digest to the Import Processing Charges Amendment Bill 2013.[9]
In 2012, the Low Value Parcel Processing Taskforce
concluded that Customs and Border Protection fees and charges were crossed-subsidised
and that ‘a more cost reflective fee structure could be established’.[10]
Prior to December 2013 only a proportion of all cargo and
trade functions provided by DIBP were cost recovered. In the 2013–14 Budget, it
was announced that DIBP would restructure the import processing charges to
recover all import related cargo and trade functions provided by DIBP.[11]
Import processing charges and warehouse declaration processing charges were
subsequently increased in December 2013 (through the Import Processing
Charges Amendment Act 2013).[12]
This legislation was supposed to make import processing charges fully
cost-recoverable.[13]
In September 2014 the Australian Government commissioned a
review by the Australian Customs and Border Protection Service (ACBPS) and DIBP
jointly with the Department of Agriculture to, among other things, investigate
current and future cost recovery based charging for services, particularly
those resulting from industry demand factors.[14]
At the time of commissioning the review, no evidence was cited suggesting that
import processing (including customs broker) charges were not fully
cost-recovered after the December 2013 changes.[15]
The goals of the Fees
Review included:
-
exploring deregulation opportunities to minimise, where possible,
the administrative burden for industry and Government and to consider better
aligning border charges levied by the Commonwealth
- achieving
at minimum a revenue neutral position, balancing user charging arrangements for
the management and protection of our border without unduly impeding economic
growth and Australia’s international competitiveness
- exploring
opportunities to consolidate the number of border fees, charges and taxes and
reduce complexity associated with their collection and
- aligning
fees and charges with future border initiatives, new services being requested
by industry and longer term objectives.[16]
The report of the Fees Review has not been made public, but
has been summarised by DIBP. It is said to have identified, among other things,
that charges for the three licence types (customs broker, warehouse and depot
licences) are ‘currently misaligned’.[17]
It recommended ways in which charges could be aligned across all licence types
including:
- the
introduction of an application charge for broker and warehouse licences, along
with a reduction in licence grant fees for warehouse licences and
- the
introduction of a variation charge for warehouse licences.[18]
According to the Explanatory Memorandum of the Fees and
Charges Bill, the Fees Review found that full-cost recovery of import
processing charges is not occurring and that custom broker charges only recover
approximately 30 per cent of the total expenditure base.[19]
Senate Standing Committee for the Selection
of Bills
At the time of writing the Senate Standing Committee for
the Selection of Bills had delayed its consideration of the Bills discussed in
this Bills Digest until its next meeting.[20]
Senate Standing Committee for the
Scrutiny of Bills
At the time of writing the Senate Standing Committee for
the Scrutiny of Bills had not considered the Bills in this legislative package.
The Bills in this legislative package do not appear to
have raised concerns or commentary from non-government parties or independent
senators or members.
The Freight and Trade Alliance (FTA) stated in relation to
the finalisation of the Fees Review:
Winners are the express courier and internet trade sectors.
Losers are commercial importers who continue to carry the
bulk of the cost recovery burden and now face a price increase on air and post
import declarations.
Whilst the rest of the industry remains relatively untouched,
customs brokers face an astonishing 100% grant and renewal fee increase.[21]
The Fees and Charges Bill and the Depot Licensing Bill marginally
increase licensing charges and together will generate an estimated $1.1 million
over the forward estimates.[22]
The Import Bill rationalises and generally increases import and warehouse
declaration processing charges to the current highest rate for all modes of
receival. It is estimated that this will generate $106.4 million over the
forward estimates.[23]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bills’ compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. [24]
The Government considers that each of the Bills is compatible.
Parliamentary Joint Committee on
Human Rights
At the time of writing the Parliamentary Joint Committee
on Human Rights had not considered the Bills in this legislative package.
Lack of transparency
According to the Explanatory Memoranda to each of the Bills,
a Regulatory Impact Statement has been prepared, but will not be published
until all recommendations arising from the Fees Review have been considered and
finalised.[25]
Similarly, no finalised, current Cost Recovery
Implementation Statement (CRIS) has been made public incorporating the changes
to import processing fees. While a revised CRIS would not be required until
1 January 2016, the lack of publicly available information around the
proposed changes provides the Parliament with less information about the need
for the changes to import processing charges.[26]
The Australian Government Cost Recovery Guidelines state ‘the documentation for
a specific cost recovered activity should be detailed enough to allow the Parliament,
those who pay cost recovery charges, and other stakeholders to analyse the
activity’.[27]
Fees and Charges Bill
The Fees and Charges Bill makes amendments to the Customs
Act.[28]
Items 1 to 4 make changes to the warehoused
goods declaration fee, slightly decreasing the electronic declaration rate and
increasing the document declaration rate. The amendments change the fees
currently set out in the Customs Act and also change the upper limits on
the fees that can be prescribed under the regulations. The current and proposed
fees are set out in Table 1 below:
Table 1: Current and proposed warehoused goods
declaration fees
|
Type of declaration
|
Current
|
Proposed
|
|
|
Amount set out in Act
|
Maximum amount that may be
prescribed
|
Amount set out in Act
|
Maximum amount that may be
prescribed
|
|
Electronic
|
$23.20 |
$34.80 |
$23.00 |
$34.00 |
|
Documentary
|
$60.00 |
$90.00 |
$63.00 |
$94.00 |
Source: section 71BA of the Customs Act and items 1 to 4
of the Fees and Charges Bill.
Item 9 inserts definitions for warehouse licence
application charge, warehouse licence charge and warehouse
licence variation charge. Items 10 and 11 establish that
applications for warehouse licences and variations to such licences must be
accompanied by a warehouse licence application charge (item 10)
or warehouse licence variation charge (item 11).
Item 12 repeals section 85 and provides new
sections which make the warehouse licence charge payable in respect of
the grant of a warehouse licence or the renewal of a warehouse licence (proposed
section 85) and establish that the warehouse licence charge must be
paid in accordance with the regulations (proposed section 85A).
Item 14 inserts proposed section 87A which
establishes when a refund of the warehouse licence charge is required,
specifically, if the licence is cancelled before the end of the financial year
(proposed paragraph 87A(a)) and the former licence holder has paid some
or all of the licence in that financial year (proposed paragraph 87A(b)).
The amount of the refund will be determined in accordance with a formula that
will be set out in the regulations.
Item 15 provides definitions for customs
broker licence application charge and customs broker
licence charge. Item 16 requires that a customs broker
licence application charge accompany an application for a broker’s licence.
Items 17 and 18 repeal section 183CL (item
18), which currently allows fees in respect of broker’s licences to be
prescribed in the regulations, and insert proposed section 183CJA
(item 17), which requires a person seeking to be granted a customs
broker licence to pay the customs broker licence charge (proposed
subsection 183CJA(1)) by the end of the day the customs broker
licence comes into force (proposed subsection 183CJA(2)).
The customs broker licence charge must also be paid for the renewal of a
customs broker licence (proposed subsection 183CJA(3))
before the end of the day the renewal of the licence comes into force (proposed
subsection 183CJA(4)).
Section 270 of the Customs Act allows regulations
to be made to give effect to the Act. Item 20 inserts proposed subsection
270(1A) which allows regulations to be made in relation to the charging,
paying and recovery of fees in respect to any matter under the Act or the
regulations.
Items 21 to 23 outline that the amendments
made by the Fees and Charges Bill apply as follows:
- the
new fees for import declarations apply to declarations made on or after 1 January
2016
- application
fees for warehouse or broker licences apply to licence applications made on or
after 1 January 2016
- fees
for applications for variations to warehouse licences apply to variation
applications made on or after 1 January 2016
- the
revised fees for the grant of warehouse or broker licences apply to licences
granted on or after 1 January 2016 (regardless of whether the application
for the licence was made before that time)
- the
revised fees for the renewal of warehouse or broker licences apply to renewal
decisions made on or after 1 January 2016 (regardless of whether the
licence was granted before that time)
- the
existing fees for the grant or renewal of warehouse or broker licences, and the
current requirements for paying those fees, continue to apply in relation to licences
granted or renewed before 1 January 2016.
In other words, applications, grants of licences, renewals
and fees will remain the same until 1 January 2016.
Depot Licensing Bill
The Depot Licensing Bill makes amendments to the Customs
Depot Licensing Charges Act.[29]
Items 1-3 amend both the short and long title of
the Act to reflect that the Act will now also deal with the imposition of
charges in relation to warehouse licences and customs broker licences.
Currently the Act only deals with charges imposed in relation to depot
licences. The Act will be renamed the Customs Licensing Charges Act 1997.
Item 4 inserts definitions for broker’s licence,
Comptroller-General of Customs, customs broker licence
application charge, customs broker licence charge and warehouse
licence as well as those inserted by item 9 of the Fees and
Charges Bill (above).
Item 6 inserts new Part 3 to Part 5 in the renamed Customs
Licensing Charges Act.
Proposed Part 3 deals with when warehouse licence
charges are payable (proposed section 6B), the amount of the
warehouse licences charges, specifically warehouse licence application
charges (proposed section 6C), warehouse licence charge
(proposed section 6D and section 6E) and warehouse
licence variation charge (proposed section 6F). The current
and proposed fees are set out in Table 2 below:
Table 2: Current and proposed warehouse licence fees
|
Type of charge |
Current charge |
Proposed charge
|
|
|
Amount set out in Act
|
Amount set out in Act
|
Maximum amount that may be
prescribed
|
|
Warehouse licence application charge
|
$0 (no current fee)
|
$3,000
|
$4,500
|
|
Warehouse licence charge
|
$7,000
|
$4,000
|
$6,000
|
|
Warehouse licence renewal charge
|
$4,000
|
$4,000
|
$6,000
|
|
Warehouse licence charge—dual-licensed place
|
$1,000
|
$1,000
|
|
Warehouse licence renewal charge—dual-licensed place
|
$0 (no current fee)
|
$0
|
|
Warehouse licence variation charge
|
$0 (no current fee)
|
$300
|
$450
|
Source: regulations 35 and 36 of the Customs Regulation 2015 and proposed sections 6C to 6F of the Customs
Licensing Charges Act.
Proposed Part 4 deals with when customs broker
licence charges are payable (proposed section 6G), the amount of the customs
broker licence application charge (proposed section 6H) and
the amount of customs broker licence charge (proposed section
6J). The current and proposed fees are set out in Table 3, below:
Table 3: Current and proposed customs broker licence fees
|
Type of charge
|
Current charge
|
Proposed charge
|
|
|
Amount set out in Act
|
Amount set out in Act
|
Maximum amount that may be
prescribed
|
|
Customs broker licence application charge—natural person
who does not intend to act as broker in own right
|
$0 (no current fee)
|
$130
|
$195
|
|
Customs broker licence application charge—any other case
|
$0 (no current fee)
|
$1,300
|
$1,950
|
|
Customs broker licence charge—natural person who does not
intend to act as broker in own right
|
$120
|
$240
|
$360
|
|
Customs broker licence charge—any other case
|
$1,200
|
$2,400
|
$3,600
|
Source: regulation 115 of the Customs Regulation 2015 and proposed sections 6H to 6J of the Customs
Licensing Charges Act.
The proposed Part 5 makes current section 7, which
deals with the making of regulations, a new part and extends the power to make
regulations to include the new provisions.
Import Bill
The Import Bill makes amendments to the Import Processing
Charges Act.[30]
Section 5 of the Import Processing Charges Act sets
out the current import declaration processing charges and warehouse declaration
processing charges. Under the current section charges differ according to whether
the imported good arrived by air, sea or mail. Item 1 of the Import Bill
repeals and replaces section 5 to remove the differentiation between
goods received into the country through different methods and provide different
import declaration processing charges for electronic declarations and for
documentary declarations. The current and new charges are set out in Table 4 below:
Table 4: Import and warehouse Declaration Processing
Charges
|
Import and warehouse declaration processing charges |
Current
|
Proposed
|
|
Value of goods
|
Less than $10,000
|
Equal to or greater than $10,000
|
Less than $10,000
|
Equal to or greater than $10,000
|
|
Imported by air— electronic declaration
|
$40.20 (up to $45.00 may be prescribed)
|
$122.10 (up to $183.15 may be prescribed)
|
$50.00 (up to $75.00 may be prescribed)
|
$152.00 (up to $228.00 may be prescribed)
|
|
Imported by air— documentary declaration
|
$48.85 (up to $73.30 may be prescribed)
|
$122.10 (up to $183.15 may be prescribed)
|
$90.00 (up to $135.00 may be prescribed)
|
$192.00 (up to $288.00 may be prescribed)
|
|
Imported by mail— electronic declaration
|
$40.20 (up to $45.00 may be prescribed)
|
$122.10 (up to $183.15 may be prescribed)
|
$50.00 (up to $75.00 may be prescribed)
|
$152.00 (up to $228.00 may be prescribed)
|
|
Imported by mail— documentary declaration
|
$48.85 (up to $73.30 may be prescribed)
|
$122.10 (up to $183.15 may be prescribed)
|
$90.00 (up to $135.00 may be prescribed)
|
$192.00 (up to $288.00 may be prescribed)
|
|
Imported by sea— electronic declaration
|
$50.00 (up to $74.00 may be prescribed)
|
$152.60 (up to $228.90 may be prescribed)
|
$50.00 (up to $75.00 may be prescribed)
|
$152.00 (up to $228.00 may be prescribed)
|
|
Imported by sea— documentary declaration
|
$65.75 (up to $98.60 may be prescribed)
|
$152.60 (up to $228.90 may be prescribed)
|
$90.00 (up to $135.00 may be prescribed)
|
$192.00 (up to $288.00 may be prescribed)
|
Source: Section 5 of the Import Processing Charges Act and
item 1 of the Import
Processing Charges Amendment Bill 2015.
Item 2 states that amendments to import and warehouse
declarations charges will to declarations communicated to the Department on or
after 1 January 2016.
It is hard not to criticise the lack of transparency during
this legislative process. The full cost recovery of import processing was meant
to have been achieved through the Import Processing Charges Amendment Act. This
costing model likely reflected the costs at the time. These costs may have
evolved since then and necessitated a review and further changes. The lack of
evidence and information presented, however, introduces doubts as to whether
either the Fees Review or the subsequent changes to import processing charges are
justified.
Additionally no current CRIS or regulatory impact
statement has been made available to accompany the legislation despite the fact
that the legislation will marginally increase total import processing charges.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Department
of Immigration and Border Protection (DIBP), ‘Joint
review of border fees, charges and taxes’, DIBP website, accessed
7 October 2015.
[2]. Customs Act 1901,
accessed 24 September 2015.
[3]. Customs Depot Licensing
Charges Act 1997, accessed 6 October 2015.
[4]. Import Processing
Charges Act 2001, accessed 6 October 2015.
[5]. Customs Act 1901,
accessed 7 October 2015.
[6]. Explanatory
Memorandum, Customs Amendment (Fees and Charges) Bill 2015, p. 5, accessed
9 October 2015.
[7]. Customs Act 1901,
sections 183C and 181.
[8]. Department
of Immigration and Border Protection (DIBP), ‘Cargo
and trade related activities 2015–16’, cost recovery implementation
statement (CRIS), p. 3, accessed 30 September 2015. Note, while this CRIS
includes information on the proposed changes, it is not the final CRIS which is
required to be released prior to the proposed changes taking effect.
[9]. H
Gobbett, Import
Processing Charges Amendment Bill 2013, Bills digest, 28, 2013–14,
Parliamentary Library, Canberra, 2013, accessed 25 September 2015.
[10]. Low
Value Parcel Processing Taskforce, Final
report, The Treasury, Canberra, ACT, 2012, p. 12, accessed 24 September
2015.
[11]. Australian
Government, ‘Part
1: revenue measures’, Budget measures: budget paper no. 2: 2013–14, p. 10,
accessed 25 September 2015.
[12]. Import Processing
Charges Amendment Act 2013, accessed 25 September 2015.
[13]. S
Morrison, ‘Second
reading speech: Import Processing Charges Amendment Bill 2013’, House of
Representatives, Debates, 3 December 2013, p. 980, accessed 29 September
2015.
[14]. Australian
Customs and Border Protection Service (ACBPS) and Department of Immigration and
Border Protection (DIBP), ‘Joint
review of border fees, charges and taxes’, industry consultation paper, 17
September 2014, p. 2, accessed 24 September 2015.
[15]. S
Morrison (Minister for Immigration and Border Protection), Review
of border fees, charges and taxes, media release, 17 September 2014,
accessed 30 September 2015.
[16]. Australian
Customs and Border Protection Service (ACBPS) and Department of Immigration and
Border Protection (DIBP), ‘Joint
review of border fees, charges and taxes’, op. cit., p. 3.
[17]. Department
of Immigration and Border Protection (DIBP), ‘Joint
review of border fees, charges and taxes’, DIBP website, accessed
24 September 2015.
[18]. Ibid.
[19]. Explanatory
Memorandum, Fees and Charges Bill, op. cit., p. 2.
[20]. Senate
Standing Committee for the Selection of Bills, Report,
12, 2015, The Senate, 17 September 2015, accessed 24 September 2015.
[21]. Freight
and Trade Alliance, ‘Finalisation of the
Joint Review of border fees, charges and taxes’, media release, 5 June
2015, accessed 25 September 2015.
[22]. Explanatory
Memorandum, Customs Depot Licensing Charges Amendment Bill 2015 (Depot
Licensing Bill), p. 3, accessed 25 September 2015; Explanatory Memorandum, Fees
and Charges Bill, op. cit., p. 3.
[23]. Explanatory
Memorandum, Import Processing Bill, op. cit., p. 2.
[24]. The
Statement of Compatibility with Human Rights can be found at the following
pages of the Explanatory Memoranda to the Bills: page 4 for the Fees
and Charges Bill and Depot
Licensing Bill and page 3 for the Import
Processing Bill.
[25]. Explanatory
Memorandum, Depot Licensing Bill, op. cit., p. 3.
[26]. Department
of Finance, Australian
Government cost recovery guidelines, 3rd edn, resource management
guide, 304, Canberra, July 2014, p. 48, accessed 29 September 2015.
[27]. Ibid.,
p. 12.
[28]. Customs Act 1901,
accessed 7 October 2015.
[29]. Customs Depot Licensing
Charges Act 1997, accessed 6 October 2015.
[30]. Import Processing
Charges Act 2001, accessed 6 October 2015.
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