Businesses to save as government scraps tariffs

Businesses to save as government scraps tariffs

Businesses to save as government scraps tariffs

Toothbrushes, sanitary products, washing machines and freezers may become cheaper in a move retailers say will reduce the costs of doing business.

Almost 500 nuisance tariffs will be scrapped in the new financial year, saving companies more than $30 million in annual compliance costs.

The move will eliminate 14 per cent of Australia’s taxes on imported goods from July 1 and is the single biggest tariff reform in two decades

The change aims to make it easier to do business and boost productivity by cutting costs and reducing red tape, Treasurer Jim Chalmers said.

“This is meaningful economic reform that will deliver meaningful benefits to businesses of all sizes around Australia,” he said.

“These tariff reforms will be better for businesses, better for consumers and better for the economy.”

The Productivity Commission defines nuisance tariffs as levies that raise little revenue, have negligible benefits for producers but impose compliance burdens on businesses.

Removing the levies will streamline $8.5 billion worth of trade.

Australian Retailers Association chief executive Paul Zahra says every little bit helps when it comes to reducing business costs.

“Whilst this tariff reduction will provide only modest cost relief for retailers, the simplified system will eventually have a flow on benefit to business productivity – a critical issue this year whilst retailers aim to get back on their feet,” he said.

The full list of tariffs to be dumped will be finalised and revealed in the federal budget.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar lauded the decision, saying it could also lower costs for consumers.

“Removing these tariffs is an important step in simplifying the trade system and driving productivity,” he said.

“It will deliver broader economic benefits, especially welcome during the current cost of living crisis, with consumers benefiting from lower costs of imported goods.”

Agriculture Minister Murray Watt and Home Affairs Minister Clare O’Neil said the reforms would make compliance less complicated for companies while helping farmers.

Business Council chief executive Bran Black welcomed the changes but said the government must take further steps to address other red tape regulations that mandate the use of outdated technologies like paper.

 

Tess Ikonomou and Kat Wong
(Australian Associated Press)



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