House of Representatives

Second Reading Speech

Mr WOOD (La Trobe - Assistant Minister for Customs, Community Safety and Multicultural Affairs)

I move:

That this bill be now read a second time.

The Customs Amendment (Product Specific Rule Modernisation) Bill 2019 (the bill) amends the Customs Act 1901(Customs Act). Similar to the 2018 act of the same name, this bill will streamline the implementation of our free trade agreements (FTAs) and help facilitate smoother trade between Australia and our existing FTA partners.

Australia's FTAs contain rules of origin for determining whether goods are eligible for preferential tariff treatment under the FTA. These include product specific rules of origin (PSRs). The PSRs apply to goods containing material sourced from a nonparty. PSRs are based upon the Harmonised Commodity Description and Coding System, also called the Harmonised System.

The six FTAs addressed by this bill each have a separate PSR annex that is implemented domestically by being replicated in regulations (the FTA regulations). Currently importers consult both the text of the FTA and the FTA regulations in order to work out whether their goods are eligible to claim preferential tariff treatment.

The amendments in this bill mean that businesses importing goods under any of the FTAs covered by the bill will, in future, only refer to the PSRs in the FTA.

The 2018 amendment act resulted in the repeal of some 2,692 pages of regulations, reducing them to 48 pages. It is expected that this bill will significantly reduce the size of the regulations for the six affected FTAs, from over 3,000 pages to about 90 pages.

The changes proposed by this bill are technical in nature and are not controversial. They do not make any changes to the benefits that are available under any of the FTAs.

The changes proposed by this bill will also mean no delay in Australia implementing changes under the Harmonised System. It will reduce the likelihood of errors that could occur in prescribing the PSRs in FTA regulations. The bill will also greatly reduce the use of government resources in amending and updating large regulations in the future.

Importantly, the changes will make it easier for businesses new to using FTAs to understand their obligations by using consistent and simpler language across the legislation that implements the FTAs negotiated by the Australian government.

In introducing this bill, the government honours its commitments to its FTA partners to ensure our agreements remain up to date.

Debate adjourned.