A global pandemic did not stop the Department of Home Affairs from holding its annual Industry Summit. Fittingly for a virtual event, a major trade theme of the summit was how digital technology could be used to both simplify trade and at the same time, build more resilient supply chains. Below we set out some of the key trade related takeaways from an excellent industry summit.
Simplifying trade
Minister Dutton provided the first speech of the Summit and made the point that inits first 3 years, the Department of Home Affairs focused on threats, but the next 3 years it is expected to focus on opportunities. The simplification of trade was identified as a major opportunity. Minister Dutton noted the following:
· the Department has funding and a goal of simplifying trade
· the immediate focus will be in removing red tape and deregulation
· Industry will be instrumental in looking for trade simplification strategies in 2021
· a longer term goal is a single window system
A single window can mean different things and it is clear that Home Affairs is very open about what its single window would look like. Items discussed included:
a) a single point for information regarding imports or exports
b) a single touch point for dealing with Government
c) the reusing of data across different Government departments
d) different information requested by Government departments on an exception basis – the goal is to only request information once
A recognised challenge is that there is a desire for both immediate gains and a complete system overall. The ambition of the simplification project could prove to be its weakness. It was noted that the Department will have to be careful in the simplification projects it prioritises.
There is a need for change and the time is right
The Department acknowledged that the Integrated Cargo System (ICS) has limitations that were highlighted during Covid. Fundamentally, the ICS has a lack of flexibility and it largely a digital version of a paper based system. An example given was the challenges created by the rerouting of cargo from Sydney to Melbourne with little notice following Sydney port congestion.
The response to Covid has shown the Government and industry that anything is possible. Previously it was unthinkable that Australia could close its international and domestic borders with little notice.
Covid also demonstrated how important it is to have flexible digital systems. A flexible digital supply chain will become even more relevant in a post-Covid world. This has created Government enthusiasm to work together across portfolios a create simplified trade solutions. To this end there will be a trade simplification taskforce that will comprise multiple Ministers. The Department will also be informed by a trade simplification industry advisory council.
The formation of a trade simplification industry body reflected the strong theme of the summit, Government working in partnership with industry. The Department on many occasions said that it is industry that knows what are the real issues at the border. It is industry that will be better at developing IT systems.
There can always be a gap between what is the ideal and what is practical. However, the message from the Department is that it has a genuine willingness to experiment and that business will be the centre of the redesigned system.
Security
Secretary of the Department for Home Affairs, Mike Pezzullo, emphasised that as the Department redesigns trade in a post Covid world, it will not lose sight of the linkage between security and prosperity. Security is not an end in itself. Rather, Secretary Pezzullo emphasised that border security is what enables Australia to achieve its other goals.
There is a tension though. What creates trade facilitation benefits can also create risk. If goods are moving more quickly, there may be less opportunities for intervention. However, better use of technology and simpler trade could actually improve security.
At the heart of this goal was a strong security partnership between Government and industry. If industry is providing more and better quality data, there will be better security outcomes. It also follows if data is received more quickly, it enables the ABF to be quicker in its response to threats.
The Department is also looking for more open and frank exchanges with industry. It was acknowledged that industry may see threats prior to the Government. It is industry that will readily identify if something is unusual. It was noted in this respect that the large take up of the Trusted Trader Programme has influenced and improved this relationship.
What's next
The Industry Summit is about sharing and developing ideas and not necessarily focused on concrete outcomes. The Department has goals, motivation, funding and whole of Government support for simplified trade. The challenge will be translating this into actions and outcomes.
Minister Dutton spoke about seeking ideas from industry in 2021. The ABF spoke of providing an issues paper regarding regulatory reform "shortly".
There was talk of an industry advisory council to guide the Government on its simplified trade agenda. What all of this suggests is that before the Government takes any further steps down the path of trade simplification, it will first seek the views of industry. This means that customs brokers, freight forwarders, importers and exporters should now be identifying the issues that it wants addressed.
· Where can trade be made easier without having a negative impact on security?
· Where is Government doing something only because it is how it has always been done?
· Where are you providing the same information to multiple government agencies – or even worse, to the same agency on multiple occasions?
· What data could you give to Government to replace a regulatory burden?