Second Reading SpeechMr Dutton (Minister for Immigration and Border Protection)
That this bill be now read a second time.
The Customs and Other Legislation Amendment Bill 2016 is an omnibus bill that proposes a number of changes to the Customs Act, as well as amendments to the Commerce (Trade Descriptions) Act, and the Maritime Powers Act.
The amendments proposed in schedule 1 of the bill will allow regulations to be made so that export permits for defence and strategic goods can be revoked where, in the opinion of the Defence Minister, the exportation of those goods would prejudice Australia's national security, defence or international relations. After this amendment to the Customs Act commences, the Customs (Prohibited Exports) Regulations 1958 will need to be amended to give effect to this power.
Following feedback from participants throughout the pilot phase, schedule 2 of the bill will further streamline the accreditation process for the Australian Trusted Trader program, by amending the Customs Act to remove the requirement that the Comptroller-General of Customs enter into an agreement with an entity that confers interim trusted trader status. This is being done at the suggestion of industry, and will reduce the regulatory burden on businesses seeking accreditation under the Australian Trusted Trader program, and incentivise greater industry participation.
The Customs Act does not currently contain any mechanism by which an owner of goods can be exempt from liability to pay the import declaration processing charge. Schedule 3 of the bill will amend the Customs Act to allow a determination that certain parties or goods are exempt from liability to pay this charge. These amendments will allow Australia to comply with international agreements and treaties involving the application of fees and charges at the border. These amendments ensure that people who pay the charge but are exempt from doing so are able to have their payment refunded.
Schedule 4 of the bill will amend the Customs Act to extend the circumstances in which a person can apply to move, alter or interfere with goods for export that are subject to customs control. Outwards duty-free goods, including those issued under the current duty-free 'sealed bag scheme' require the same screening as any other baggage of travellers on international flights and voyages.
Screening staff at an international gateway airport are required to screen all liquids, aerosols and gels presented at a departure screening point. If an alarm is triggered while screening the goods, the goods are required to be rescreened. If the item is a duty-free item, this means removing it from the sealed duty-free packaging. However, the opening of sealed duty-free bags and/or tampering with the contents without permission while they are subject to customs control is an offence punishable under the Customs Act.
These amendments will allow screening authorities to apply for permission to open sealed duty-free bags for rescreening without breaching the Customs Act. Granting this permission will be relevant at international gateway airports, such as Melbourne, where departure screening occurs prior to customs processing.
Schedule 5 of the bill will amend the Customs Act to remove unnecessary requirements for producers when demonstrating that they have made goods in Australia. Currently, when Australian manufacturers apply to have a tariff concession order revoked, or object to the making of a tariff concession order, they must meet two tests. They must demonstrate that at least 25 per cent of factory costs of substitutable goods occur in Australia and that a substantial process of manufacture is also undertaken in Australia.
Where a substantial process of manufacture in Australia is proved, the Australian content always exceeds the 25 per cent threshold as a matter of fact. Therefore, this requirement is to be removed. Providing evidence of factory costs requires detailed and confidential company accounting information and is a significant and costly administrative burden for manufacturers. Its removal is consistent with the government's deregulation agenda.
Schedule 5 of the bill also clarifies the requirements for Australian producers of made-to-order capital equipment when seeking to revoke a tariff concession order, or object to the making of a tariff concession order. If the tariff concession order relates to goods that are made-to-order capital equipment, Australian manufacturers need only demonstrate that they have the capacity to produce substitutable goods. Australian producers of made-to-order capital equipment do not need to have actually made substitutable goods the subject of a TCO application or revocation.
The amendment also extends the evidentiary window for a local manufacturer to demonstrate capability of production of substitutable goods from two years to five years. The current period of two years is often insufficient for an Australian manufacturer to demonstrate such capability in relation to large-scale capital works such as unique mining machinery, given the amount of time and labour involved in such manufacture.
Amendments to the Customs Act proposed in schedule 6 of the bill will repeal an obsolete provision relating to the collection of duty on goods imported for a temporary purpose.
Schedule 7 of the bill amends the Commerce (Trade Descriptions) Act to allow an officer to inspect and examine goods that are, or that the officer reasonably believes are, goods prescribed by the regulations made under that act which are imported, and allows those regulations to prescribe penalties, not exceeding 50 penalty units, for offences against those regulations. These amendments reflect modern drafting practices.
The amendments proposed in Schedule 8 of the bill are intended to confirm the government's clear intent that the powers under the Maritime Powers Act are able to be exercised in the course of passage through or above the waters of another country in a manner consistent with the 1982 United Nations Convention on the Law of the Sea.
Finally, Schedule 9 of the bill will repeal the Customs (Tariff Concession System Validations) Act 1999 and the Import Processing Charges (Amendment and Repeal) Act 2002 as these acts are now redundant.
I commend the bill to the chamber.