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  • Russell Wiese

The 2024 / 25 Federal Budget from a Customs and Trade Perspective




Measures to ease cost of living pressures captured the budget headlines. However, a careful review of the budget papers revealed interesting developments affecting customs and trade.


ABF funding increase

The 2024 / 25 Federal Budget is largely characterised by a lack of new spending. In this context it is relevant that an extra $100 million has been allocated to the Department of Home Affairs to support the performance of core functions, such as Australian Border Force (ABF) operations. This reflects a view that the ABF is currently underfunded and needs a significant funding boost.



There is no guidance on where this funding will be directed. However, there is no doubt that Treasury would love to see the extra funding result in greater customs duty collections.


Illicit tobacco

On top of the $100 million Department of Home Affairs top up, $188 million over 4 years has been allocated to the ABF to deliver a multi-agency, multi-jurisdictional response to the illicit tobacco trade. Illicit tobacco compliance could take the form of:

a)       Licenced depot compliance activities;

b)      SAC compliance with a focus on accurate cargo reporting;

c)       Pre-importation intervention.

Customs brokers need to ensure that due diligence is undertaken regarding importer identity, the goods description and the value of the goods.


EU Free Trade Agreement

Treasury remains optimistic that an FTA with the EU will be negotiated and concluded. This prediction has been in the budget papers for many years. In fairness, Treasury could hardly predict that Australia would cancel an $80 billion French submarine deal and derail the EU FTA negotiations.


As a guide to the Treasury predictions, it is expected that by the 2027 / 28 budget, customs duty receipts on passenger motor vehicles will have fallen from the current $380 million to $110 million.


Before there is any reduction in customs duty, a deal with the EU will need to be concluded and enabling legislation passed in Australia and the EU. For that to happen the EU will need to improve its agricultural market access offering. Australian will likely have to agree to limit on the use of certain geographical indicators, such as feta and parmesan.


Nuisance tariffs

The Government is proposing to abolish 457 nuisance tariffs from 1 July 2024. These tariffs serve little protective purpose with revenue per year running at about $10 million on about $8.5 billion of imports. Most goods imported under the tariff headings are either duty free under a free trade agreement or tariff concession orders.


For those that are actually paying duty on goods covered by these headings, care should be taken with imports arriving around 1 July 2024. Careful timing of the lodgement of the import declaration could be the difference between the nuisance tariff applying, of the goods being duty free.


Until the law is passed, importers are encouraged to still ensure certificates of origin are collected for FTAs and care is taken to ensure that imports meet the terms of any TCO. It may be that there is local industry lobbying to maintain one or more of the 457 nuisance tariffs.


The original list of nuisance tariffs can be found here.


Simplified Trade

$30 million over 4 years will be provided to support coordinate, incremental improvements to cross border trade. The relatively modest amount, and the reference to “incremental” improvements, does not bode well for any significant change to the Australian Border Force or biosecurity processes or interfaces. For instances, the funding could not envisage any significant change to the integrated cargo system.


The Simplified Trade System Taskforce has also communicated that it will transition to a smaller simplified Trade System unit from 1 July 2024 and become part of Austrade. This suggests a smaller simplification agenda.


Defence export controls

Exporters of defence related or dual use goods should take steps to ensure that exports meet Australia’s export control laws. The Government has allocated $28 million over 4 years to support implementation of the Defence Trade Controls Amendment Act 2024.

The funding will include upgrades to the Department of Defence’s export permit ICT system.


The new laws will apply to both the export of goods, plus the transfer of certain technology within Australia.


Anti-Dumping Commission

There is no reported increase in funding for the Anti-Dumping Commission. This is very disappointing given that the ADC is rarely completing investigations and reviews within the timeframes anticipated by the Customs Act and the WTO. The ADC did report that for 4 of its 6 case types, it maintained or improved its average timeframes. This means that for 2 types of cases, timeframes got worse.


On top of increased funding, the ADC desperately needs to incorporate a ruling systems so that importers can have some certainty about whether dumping duties apply. However, without sufficient funding to perform its day to day tasks, its hard to see how the ADC can engage in additional activities.


Biosecurity

There were not significant changes announced in the cost recovery model for biosecurity services. These announcements happened last year. As per those announcements, from 1 July 2023 the Government had shifted to a full cost recovery model. The Government is now reporting that importers and taxpayers are contributing 92 percent of the Commonwealth’s annual biosecurity budget.


Last year the Government announced that it intended to apply a biosecurity protection levy on the importation of low value goods ($AUD 1,000 or less). The cost will be 36 cents per entry and it will be imposed on the reporting entity.


Despite industry lobbying, the Budget Papers did not suggest any change to the proposed low value goods biosecurity levy. More information on the levy can be found here.


If you would like to discuss any of the above budget measures, please feel free to contact Russell Wiese at rwiese@cgtlaw.com.au or on 0431 646 488.

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