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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS TARIFF AMENDMENT (INCORPORATION OF PROPOSALS) BILL 2021
EXPLANATORY MEMORANDUM
(Circulated by authority of the Assistant Minister for Customs, Community Safety and
Multicultural Affairs, and Parliamentary Secretary to the Minister for Home Affairs,
the Honourable Jason Wood MP)
Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
OUTLINE
The purpose of the Customs Tariff Amendment (Incorporation of Proposals) Bill 2021 (the
Bill) is to amend the Customs Tariff Act 1995 (the Customs Tariff Act) to:
amend item 57 of Schedule 4 to extend, from 31 December 2020 to 30 June 2021, the
"Free" rate of customs duty for prescribed medical products or hygiene products that
are capable of use in combating the novel coronavirus that causes the disease known
as COVID-19. This measure incorporates Customs Tariff Proposal (No. 1) 2021,
which was tabled in Parliament on 3 February 2021;
insert new item 58 into Schedule 4 to provide a "Free" rate of customs duty for goods
that are for use in the program known as the F-35 Lightning II Joint Strike Fighter
Program. This measure incorporates Customs Tariff Proposal (No. 2) 2021 which
was tabled in Parliament on 17 March 2021;
insert new item 39A into Schedule 4 to provide a "Free" rate of customs duty for
prescribed motor vehicles and motor vehicle components for research and
development activities by automotive service providers previously registered under
the Automotive Transformation Scheme (within the meaning of the Automotive
Transformation Scheme Act 2009) and where the time for working out duty is
between 1 April 2021 and 30 June 2025. This measure incorporates Customs Tariff
Proposal (No. 3) 2021 which was tabled in May 2021.
FINANCIAL IMPACT STATEMENT
The provision of a "Free" rate of customs duty for certain medical and hygiene products to
30 June 2021 is estimated to reduce customs duty receipts by $3.8 million.
The implementation of a "Free" rate of customs duty for goods associated with the F-35
Lightning II Joint Strike Fighter Program will reduce receipts by $6.7 million across the
forward estimates.
The implementation of a "Free" rate of customs duty provided to certain motor vehicles and
their components, imported by automotive service providers who were previously registered
under the Automotive Transformation Scheme (within the meaning of the Automotive
Transformation Scheme Act 2009) is estimated to reduce receipts by $1.7 million across the
forward estimates.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human Rights in respect of the amendments contained in
the Bill is at Attachment A. The Statement assesses the amendments to be compatible with
Australia's human rights obligations.
Page 2 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
CUSTOMS TARIFF AMENDMENT (INCORPORATION OF
PROPOSALS) BILL 2021
NOTES ON CLAUSES
Clause 1 Short title
1. This clause provides that this Bill, when enacted, will be cited as the Customs Tariff
Amendment (Incorporation of Proposals) Act 2021.
Clause 2 Commencement
2. This clause sets out in a table the date on which provisions of the Bill, when enacted, will
commence. It provides that information in column 3 of this table is not part of the Act, and
that the information in this column or information in it may be edited, in any published
version of the Act.
3. Item 1 of the table provides that sections 1 to 3, and anything in the Act not elsewhere
covered by the table, commence on the day that the Act receives the Royal Assent.
4. Item 2 of the table provides that Part 1 of Schedule 1 commences on 1 January 2021.
5. Item 3 of the table provides that Part 2 of Schedule 1 commences on 1 March 2021.
6. Item 4 of the table provides that Part 3 of Schedule 1 commences on 1 April 2021.
Clause 3 Schedules
7. This is the formal enabling provision for the Schedule to the Bill providing that legislation
that is specified in a Schedule to the Act is amended in accordance with the applicable items
of the Schedule concerned. In this Bill, the Customs Tariff Act 1995 (the Customs Tariff Act)
is being amended.
8. The clause also provides that other items of a Schedule to the Bill have effect according to
their terms. This is a standard enabling clause for transitional, savings and application items
in amending legislation.
SCHEDULE 1--AMENDMENTS
Introductory comments
9. The Customs Tariff Proposal mechanism is used for effecting alterations to the Customs
Tariff Act, particularly when such alterations are required to have effect in a short time frame
that cannot be achieved through a Customs Tariff Amendment Bill. Customs Tariff Proposals
are used most commonly for introducing new items, for changing rates of duty or for
restructuring items in the Schedules to the Customs Tariff Act.
10. When the Parliament is sitting, Customs Tariff Proposals are tabled in the House of
Representatives, specifying alterations to the Customs Tariff Act. Where Parliament is not
sitting for a period exceeding 7 days, the Minister may under section 273EA of the Customs
Page 3 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
Act 1901 (the Customs Act) publish a notice in the Commonwealth of Australia Gazette,
giving notice that within 7 sitting days of the House of Representatives after the date of
publication of the notice, the Minister will propose in Parliament a Customs Tariff alteration
in accordance with particulars in the notice and operating as from such time in the notice.
11. Following the introduction of a Customs Tariff Proposal in the House of Representatives, the
alterations contained in the Proposal are incorporated into the Customs Tariff Act by a
Customs Tariff Amendment Bill.
12. Schedule 4 of the Customs Tariff Act provides a concessional rate of customs duty for
imported goods specified in an item in the table in that Schedule. Under subsection 18(1) to
the Customs Tariff Act, the concessional rate of customs duty is only applicable to goods
specified in an item if, the duty payable in respect of those goods is less than the duty that,
apart from that subsection, would be payable under another Schedule to that Act.
PART 1--Medical products or hygiene products in combating COVID-19
Customs Tariff Act 1995
Item 1 Schedule 4 (table item 57, column headed "Description of goods",
paragraph (c))
13. Item 57 of the table in Schedule 4 of the Customs Tariff Act provides a "Free" rate of
customs duty for prescribed medical and hygiene products capable of use in combating the
novel coronavirus that causes the disease known as COVID-19, where the time for working
out the rate of customs duty is between 1 February and 31 December 2020. The products
prescribed in Customs By-law Nos. 2019608 and 2041552, are face masks, gloves, clothes or
gowns, goggles, glasses, eye visors, face shields, soaps, COVID-19 test kits and reagents,
viral transport media and disinfectant preparations classified to heading 3808 to Schedule 3
of the Customs Tariff Act.
14. On 16 December 2020, a Notice of Intention to Propose Customs Tariff Alterations was
published in the Commonwealth of Australia Gazette under section 273EA of the Customs
Act. On 3 February 2021, the Customs Tariff Proposal (No. 1) 2021 was tabled in Parliament
in the same terms as the Gazette Notice. Together, the Notice and Proposal created
concessional item 57B in Schedule 4 of the Customs Tariff Act to provide a "Free" rate of
customs duty for the same goods covered by item 57, where the time for working out the rate
of duty on the goods is between 1 January 2021 and 30 June 2021.
15. The Notice of intention and the related Proposal is necessary an ongoing need to combat and
prevent the spread of COVID-19 within the Australia community. In this regard, Customs
Tariff Proposal (No. 1) 2021 had the effect of extending the concessional rate of customs
duty to 30 June 2021.
16. This item amends paragraph (c) of table item 57 in Schedule 4 to the Customs Tariff Act to
omit "31 December 2020" and substitute "30 June 2021" to incorporate Customs Tariff
Proposal (No. 1) 2021.
PART 2--Goods for use in F-35 Lightning II Joint Strike Fighter Program
Page 4 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
Customs Tariff Act 1995
Item 2 At the end of Schedule 4
17. Under the Memorandum of Understanding concerning the Production, Sustainment and
Follow-on Development of the Joint Strike Fighter, Australia has committed to achieving tax
neutrality under the F-35 Lightning II Joint Strike Fighter Program. However, goods
imported for use in this program, such as parts for general use and certain textile items, may
have an applicable rate of customs duty of up to 5%.
18. A Notice of Intention to Propose Customs Tariff Alterations was published in the
Commonwealth of Australia Gazette on 26 February 2021 in accordance with section 273EA
of the Customs Act, and Customs Tariff Proposal (No. 2) 2021, in the same terms as the
Notice, was tabled in Parliament on 17 March 2021. Together, the Notice and Proposal
created concessional item 58 in Schedule 4 of the Customs Tariff Act to provide a "Free" rate
of customs duty for goods that are for use in the program known as the F-35 Lightning II
Joint Strike Fighter Program.
19. This item inserts new table item 58 in Schedule 4 of the Customs Tariff Act in the same terms
as Customs Tariff Proposal (No. 2) 2021.
Item 3 Application provision
20. This item provides that the amendment made by Part 2 of Schedule 1 to the Bill applies to:
(a) goods imported into Australia on or after the commencement of the item; and
(b) goods imported into Australia prior to the commencement of this item, where the time
for working out the rate of customs duty on the goods does not occur before the
commencement of the item.
PART 3--Goods for use in testing, quality control, manufacturing evaluation or
engineering development of certain motor vehicles
Customs Tariff Act 1995
Item 4 Schedule 4 (after table item 39)
21. Item 39 of Schedule 4 of the Customs Tariff Act, in part, provides for a "Free" rate of
customs duty for prescribed motor vehicles designed or engineered, or in the process of being
designed or engineered, in Australia, imported by automotive service providers previously
registered under the Automotive Transformation Scheme (within the meaning of the
Automotive Transformation Scheme Act 2009) or components for inclusion in such motor
vehicles.
22. All registrations of automotive service providers under the Automotive Transformation
Scheme ended on 31 March 2021 by operation of the Automotive Transformation Scheme
Regulations 2010 and as such, automotive service providers are no longer be able to access
the concessional rate of customs duty under item 39.
Page 5 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
23. Automotive service providers maintain a significant Australian presence, including through
the engineering services and design and product development.
24. To support continued domestic research and development in the automotive sector and ensure
that previously registered automotive service providers can continue to access the tariff
concession, a Notice of Intention to Propose Customs Tariff Alterations was published in the
Commonwealth of Australia Gazette on 30 March 2021 under section 273EA of the Customs
Act. The related Customs Tariff Proposal (No. 3) 2021 was tabled in Parliament in May
2021 in the same terms as the Gazette Notice. Together, the Notice and Proposal created new
concessional item 39A in Schedule 4 of the Customs Tariff Act. New item 39A provides for
"Free" rate of customs duty for goods, as prescribed by by- law, that are for use in the
testing, quality control, manufacturing evaluation or engineering development of:
(a) motor vehicles designed or engineered, or in the process of being designed or
engineered, in Australia by a person who was registered as an automotive service
provider under the Automotive Transformation Scheme (within the meaning of the
Automotive Transformation Scheme Act 2009) on 30 March 2021; or
(b) components for inclusion in such motor vehicles;
where the time for working out the rate of duty on the goods is in the period beginning on
1 April 2021 and ending at the end of 30 June 2025.
25. The prescribed motor vehicles and components are set out in Customs By-law No. 2100084,
which are motor vehicles and components used in use in testing, quality control,
manufacturing, evaluation or engineering development of motor vehicles designed or
engineered, or in the process of being designed or engineered, in Australia by a person who
was registered as an automotive service provider under the Automotive Transformation
Scheme (within the meaning of the Automotive Transformation Scheme Act 2009) on
30 March 2021, imported under security.
26. This item inserts new table item 39A into Schedule 4 of the Customs Tariff Act in the same
terms as Customs Tariff Proposal (No. 3) 2021.
Page 6 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
This Bill amends the Customs Tariff Act 1995 (Customs Tariff Act) to:
amend item 57 of Schedule 4 to extend, from 31 December 2020 to 30 June 2021, the
"Free" rate of customs duty for prescribed medical and hygiene products that are
capable of use in combating the novel coronavirus that causes COVID-19. This
measure incorporates Customs Tariff Proposal (No. 1) 2021, which was tabled in
Parliament on 3 February 2021;
insert new item 58 into Schedule 4 to provide a "Free" rate of customs duty for goods
that are for use in the program known as the F-35 Lightning II Joint Strike Fighter
Program. This measure incorporates Customs Tariff Proposal (No. 2) 2021 which
was tabled in Parliament on 17 March 2021; and
insert new item 39A into Schedule 4 to provide a "Free" of customs duty for
prescribed motor vehicles and motor vehicle components for research and
development activities by automotive service providers previously registered under
the Automotive Transformation Scheme (within the meaning of the Automotive
Transformation Scheme Act 2009) and where the time for working out duty is
between 1 April 2021 and 30 June 2025. This measure incorporates Customs Tariff
Proposal (No. 3) 2021 which was tabled in May 2021.
These measures commenced on 1 January 2021, 1 March 2021 and 1 April 2021, respectively
through three Notices of Intention to Propose Customs Tariff Alterations and related Customs
Tariff Proposals.
Human rights implications
This Bill engages the following human rights:
the right to the enjoyment of the highest attainable standard of physical and mental
health in Article 12 of the International Covenant on Economic, Social and Cultural
Rights (ICESCR); and
the right to life in Article 6 of the International Covenant on Civil and Political Rights
(ICCPR)
The right to the enjoyment of the highest attainable standard of physical and mental health
The amendment contained in Part 1 of Schedule 1 to the Bill extends, from
31 December 2020 to 30 June 2021, the concessional rate of customs duty, applicable to
Page 7 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021
prescribed medical and hygiene products that are capable of use in combating the coronavirus
that causes COVID-19.
Providing a "Free" rate of customs duty for imported medical products or hygiene products,
capable of use in combating COVID-19 virus promotes the right to enjoyment of the highest
attainable standard of physical and mental health under Article 12 of ICESCR. This Article
requires that States Parties take steps to achieve the full realisation of this right, including
those necessary for the prevention, treatment and control of epidemics.
The amendment, in extending the period for which a "Free" rate of customs duty to
30 June 2022, will promote the right by continuing to facilitate essential products that prevent
the spread of the COVID-19 virus to be imported into Australia at a lower cost. Together
with such products manufactured in Australia, the amendment will facilitate continued
greater access to such products to people in Australia.
The right to life
The amendment in Part 1 of Schedule 1 positively engage the right to life in Article 6(1) of
the ICCPR; specifically, the responsibility that a States Party has to take appropriate steps to
protect the right to life.
The right to life includes a duty on governments to take appropriate steps to protect the right
to life of those within its jurisdiction.
This amendment facilitates the continued access to medical products or hygiene products
imported into Australia at a lower cost. Access to these products inhibits the spread of the
coronavirus and limits the potential for death due to the spread of COVID-19. As a result,
this amendment promotes the right to life as it results in the availability of prescribed medical
and hygiene products for use in Australia, at a lower cost, which significantly lowers the risk
and potential harm to life posed by COVID-19 in the Australian community.
Conclusion
This Bill is compatible with human rights because it promotes human rights, specifically the
rights in Article 12 of the ICESCR and in Article 6(1) of the ICCPR, and does not otherwise
raise human rights issues.
Page 8 Customs Tariff Amendment (Incorporation of Proposals) Bill 2021