Uniform Capital Allowance System Release of Exposure Draft LegislationDecember 18, 2000
2001-02 Pre-Budget SubmissionsDecember 20, 2000
Treasurer and Minister for Industry, Science and Resources
Government Response to the Productivity Commission Report on Australias General
The Federal Government today announced its decision to retain the general tariff rate
at 5 per cent and to retain the 3 per cent duty on business inputs under the Tariff
The decisions follow the Governments consideration of the Productivity
Commissions Review of Australias General Tariff Arrangements. The Commission
was asked to review General Tariff Arrangements covering all tariffs under reference
(except the textiles, clothing and footwear and passenger motor vehicle industries).
The Commissions report was released today by the Treasurer, Peter Costello.
The Government believes the general tariff can be removed when there are clear and
substantive benefits including trade benefits in doing so, and duty on business inputs can
be removed when there are clear net benefits, both to be addressed within the context of
responsible fiscal policy.
“The Government accepts the Productivity Commissions view that there are
benefits to be obtained from the removal of the general tariff, but that such benefits
would be relatively small”, Mr Costello said.
“The Commission has estimated that removal of the general tariff would provide a
small increase in GDP rising from less than 0.04 per cent in the first year to
about 0.08 per cent after nine years. However, the Commission also identified that there
would be transitional costs as a consequence of reducing the general tariff to zero”.
“We consider there would be benefit in holding these current arrangements for the
present and moving to withdraw them at a time consistent with trade and fiscal
Senator Minchin noted that Australias current tariff regime put it at the
forefront of trade liberalisation in the Asia Pacific region. He pointed out that
Australia had reduced its tariffs significantly over the past decade and they were now
among the lowest in the world.
“These changes have delivered greater efficiency to our manufacturing
industries.” Senator Minchin said. “Its now time to consolidate and call
on the rest of the world to catch up with Australias lead.”
Australia remains firmly on track to meet its international obligations, especially the
APEC goal of free trade by 2010. Australias strong record of reform provide it with
a powerful bargaining position in future trade negotiations.
The Commission also suggested changes to the Project and Policy By-laws Schemes to
streamline the administration and reduce compliance costs for industry. The Government
will consider changes to the Project and Policy By-laws Schemes in the new year.
Copies of the review are available from the Productivity Commissions website (www.pc.gov.au).
19 December 2000
Contact: Minister Minchins Office
08 8237 7190
03 9650 0244