A 5% import tax (tariff) on nearly 500 products will be scrapped from 1 July, Treasurer Jim Chalmers has.
It means businesses will save money on imported products including pads, tampons, washing machines, toothbrushes and pens.
Thewere designed to boost government revenue on imported goods and ensure fair competition between Australian and international producers.
However, Chalmers said the penalties had become a costly “nuisance” for businesses and customers.
Tariffs scrapped
Hundreds of goods are regularly imported into Australia without penalties or taxes thanks to free trade deals with other countries.
However, Australian tariff rules mean governments and businesses still have to prove they don’t need to pay extra charges to import their products.
Chalmers said it’s led to an unnecessarily costly process for businesses which could be increasing prices and directly affecting customers.
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Costs of tariffs
Chalmers estimated that Australian companies are spending $30 million a year to prove the goods they’re importing comply with tariff systems and trade agreements. He said these tariffs “do nothing” to support businesses.
14% of Australia’s total tariffs will now be scrapped, which Chalmers said would remove this burden and support productivity.
The government will look to repeal more tariffs as trade negotiations continue.
What happens next?
Members of the public can submit their thoughts on the proposed tariff cuts before the measures are expected to be finalised.
The full list of scrapped tariffs will be detailed in the Federal Budget in May.
Crossbench Senator Jacqui Lambie downplayed the importance of repealing the tariffs, saying businesses would “hardly notice” the measure.
