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Tariff Reform To Cut Costs For Businesses and Boost Productivity In Australia

The Albanese Labour Government plans to eliminate nearly 500 nuisance tariffs starting July 1 this year. These tariffs, which currently apply to goods like toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products, will be abolished to reduce compliance costs, simplify trade, and enhance productivity. This move marks the most significant unilateral tariff reform in at least twenty years.

Although Australian workers and businesses are not shielded by these tariffs, they are burdened with compliance costs and red tape associated with the current tariff system. The reform aims to simplify Australia’s trading system, alleviate compliance costs for businesses, especially small-to-medium enterprises, and allow them to focus on their core operations.

The abolition of these tariffs will eliminate approximately 14% of Australia's total tariffs, streamlining about $8.5 billion worth of annual trade and saving businesses over $30 million in compliance costs each year. For instance, customs duties on products like washing machines, fridge-freezers, agricultural vehicle tires, protective footwear, toothbrushes, menstrual and sanitary products, X-ray film, chamois leather, pyjamas, fishing reels, rollercoasters, dodgem cars, ballpoint pens, toasters, electric blankets, and bamboo chopsticks will be removed.

The removal of tariffs on menstrual and sanitary items will align tariff policy settings with changes made to the GST. Consultation on the proposed reforms is currently open, with submissions accepted on the Treasury website until April 1, 2024. The tariffs selected for abolition have been carefully chosen to benefit businesses without negatively impacting Australian industries or impeding Australia in sensitive Free Trade Agreement negotiations. A comprehensive list of the tariffs to be abolished will be finalised and provided in the Budget.

Treasurer Jim Chalmers has stated "These tariffs impose a regulatory burden on Australian businesses and raise the costs of imported goods but they do little to protect our workers and businesses because they apply to goods that are mostly already eligible for duty‑free importation.

Tariff reform will also provide a small amount of extra help with the cost of living challenge by making everyday items such as toothbrushes, tools, fridges, dishwashers and clothing just a little bit cheaper."


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