Following the 2022-23 Federal Budget handed down on 29 March 2022, there are further matters of interest for the freight forwarding and customs broking industry (or their clients).
They are as follows:
Customs revenue – Excise and customs duty
The temporary reduction in fuel excise will help reduce the burden of higher fuel prices by halving the excise for 6 months from the March 2022 Budget.
COVID-19 tariff concessions
From 1 July 2022, the Government will make permanent the temporary tariff concession that is currently in place for certain medical and hygiene products to treat, diagnose or prevent the spread of COVID-19. The range of products to which the concession applies will be expanded and the end use restriction removed.
Deregulation benefits
The Australian Government is providing significant deregulation benefits to fuel and alcohol producers, importers, and distributors through streamlining the administration of fuel and alcohol excise and excise-equivalent customs goods. The changes estimated from 1 July 2023 will:
- enable fuel and alcohol businesses with an annual turnover of less than $50 million to lodge and pay excise and excise equivalent customs duty on a quarterly basis, rather than weekly or monthly as at present.
- enable businesses that import fuel and alcohol products for further manufacture or distribution and want to defer payment of excise or excise-equivalent customs duty, to transfer the fuel or alcohol straight into a warehouse administered by the Australian Taxation Office (ATO) once the products have gone through Australian Border Force (ABF) customs clearance. The ABF will still collect tax on direct imports.
- streamline and align licensing requirements across the excise system, by:
- removing all renewal requirements for excise and excise equivalent customs goods licences; removing licence fees; enabling the ATO and ABF to issue entity level licences in addition to site level licences; and providing blanket permission to move goods between sites controlled by licensed businesses
- removing onshore producers of crude oil and condensate from the excise system until and unless they exceed the relevant production threshold to be liable for excise payments
- extending the time limit to apply for a refund of excise overpayments from 12 months to 4 years after payment, to align with refunds of customs duty
- creating a public register of excise and excise equivalent customs goods licences administered by the ATO.
- amend the excise and excise-equivalent customs duty regime for fuel by:
- introducing a refund provision, similar to that in the excise law, for excise equivalent customs duty on petroleum-based oils used in the further manufacture of petroleum lubricants, ending double taxation of these oils
- removing the requirement to pay and then claim Fuel Tax Credits in respect of excise or excise equivalent customs duty on fuels used in domestic commercial shipping (‘bunker fuels’), aligning their treatment with the duty-free treatment of bunker fuels for international voyages
- setting a single rate for businesses to calculate and claim Vapour Recovery Unit refunds.
- amend the excise law to provide a targeted exemption from excise licensing requirements, up to a threshold of 10,000 litres per year, for licensed hospitality venues to fill beer from kegs into sealed, non-pressurised containers of no more than 2 litres capacity and not designed for medium to long term storage (‘growlers’).
Road to rail
The Australian Government is providing funding for road and rail infrastructure through the Infrastructure Investment Program under the funding agreement on land transport infrastructure projects. The Australian Government has established a 10-year funding allocation for this program. The program assists economic and social development regionally and nationally by providing funding to improve the performance of land transport infrastructure.
The Australian Government is providing funding to Queensland, Western Australia and the Northern Territory for infrastructure projects that are essential to the movement of people and freight to support economic development in the region. Projects include links to roads connecting communities and regional towns to ports and airports..
The Australian Government is providing funding to enhance capacity and improve transport infrastructure in Sydney’s western suburbs. This includes infrastructure to support the new Western Sydney airport at Badgerys Creek.
The Government will provide an additional $25.2 million over 2 years from 2022 23 to maintain appropriate oversight and environmental management at Commonwealth leased airports to ensure compliance with airport building control and environmental regulations. Funding includes:
- $16.3 million over 2 years from 2022 23 to support airport building control services, including during peak construction at Western Sydney Airport
- $8.9 million over 2 years from 2022 23 to continue to support airport compliance with environmental standards.
The Government will provide $7.1 billion over 11 years from 2022-23 to support existing programs and turbocharge the economies of 4 key regional hubs across Australia.
Investment will be targeted at strategic infrastructure projects that drive economic and jobs growth in existing and emerging industries. Program funding will focus on connecting infrastructure and developing supply chains to ensure long term economic and national security. The 4 regions are:
- The Northern Territory to fund infrastructure projects that support the manufacturing industry, promote the onshore processing of critical minerals and to strengthen the region’s position as an industrial and renewable energy hub
- North and Central Queensland to invest in water infrastructure and supply chain projects that promote water security and open up agriculture and industry growth opportunities
- Pilbara region in Western Australia to fund infrastructure projects that support the mining, mineral processing and manufacturing sectors and accelerate growth in the hydrogen and renewable energy industries
- Hunter region in New South Wales to fund transport infrastructure projects that will improve supply chain efficiencies and help diversify the economy, building on the region’s existing strengths and facilitating the development of new industries.
International Freight Assistance Mechanism (IFAM)
The Government will provide $267.1 million over 4 years from 2022 23 (and $4.4 million per year ongoing from 2026 27) to modernise and improve Australia’s trade system and support Australian exporters. Funding includes:
- $127.4 million to continue and expand the Digital Services to Take Farmers to Market initiative to transform the delivery of Government agricultural export systems
- $80.0 million to provide additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program
- $48.0 million to modernise Australia’s trade system, reduce the regulatory burden on exporters and to identify opportunities for further reforms
- $11.7 million to expand the Trade Information Service to provide exporters with a single source of online information to facilitate access to international markets.
EU FTA/India FTA
The Australian Government continues to be optimistic and continues to include provisions for the Australia-European Union Free Trade Agreement (FTA) and the Australia-India Comprehensive Economic Cooperation Agreement, however these agreements have not yet been finalised. These agreements are likely to increase the value of imports going forward but decrease customs revenue for the Government due to the nature of the free trade agreements. A number of other FTAs are currently under negotiation but are not expected to have a material impact on revenue over the forward estimates.
Department of Agriculture
The Government will provide $267.1 million over 4 years from 2022 23 (and $4.4 million per year ongoing from 2026 27) to modernise and improve Australia’s trade system and support Australian exporters. Funding includes:
- $127.4 million to continue and expand the Digital Services to Take Farmers to Market initiative to transform the delivery of Government agricultural export systems
- $80.0 million to provide additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grants program
- $48.0 million to modernise Australia’s trade system, reduce the regulatory burden on exporters and to identify opportunities for further reforms
- $11.7 million to expand the Trade Information Service to provide exporters with a single source of online information to facilitate access to international markets.
Anti-dumping
Last year’s budget announcements yet to progress.