Government pledges to abolish 500 ‘nuisance tariffs’ at next budget

Tyres, televisions, wine glasses and air conditioners are among the imported products that could be cheaper following the abolition of 500 “nuisance tariffs”, Treasurer Jim Chalmers said in a release.

The pledge to cut 500 additional tariffs came after 457 tariffs were removed in July last year, a move which the government has said would reduce compliance costs for businesses.

“With this reform, we’ll have removed around 1,000 tariffs over two years and streamlined approximately $23 billion worth of trade, saving Australian businesses $157 million in compliance costs annually,” Chalmers said in a joint statement with senators Don Farrell and Tim Ayres.

Abolishing “nuisance tariffs” had been one of the government’s ‘quick wins’ listed for rapid action following its August economic reform roundtable, which sought to garner ideas and consensus for productivity-boosting reforms.

The Business Council of Australia (BCA) welcomed the tariffs’ abolition, calling it a “common sense” reform that would reduce business costs and boost investment.

“Analysis by the Productivity Commission shows that for every dollar collected in tariff revenue, the broader economy can lose up to around $1.60 — that’s a trade-off no modern economy can afford,” BCA chief executive Bran Black said.

“This is a smart and sensible decision that will help clear away outdated barriers and make the economy work more efficiently.”

The Treasury predicted that the tariff cuts could save businesses millions in compliance costs per year, while not severely denting government revenue.

Over $1.4 billion worth of televisions were imported to Australia per year, but they raised less than $43,000 in revenue per year in tariffs, according to Treasury figures. Abolishing tariffs could save businesses in that space over $13 million in compliance costs per year, the Treasury predicted.

Similarly, almost $4 billion worth of tyres were imported into Australia per year, but less than $80,000 in revenue was raised. The government predicted that removing ‘nuisance’ tariffs would save businesses in this area over $32 million in compliance costs annually.

The Treasury said it would consult on the proposed list of almost 500 additional tariffs to be abolished by the government. Submissions would remain open on the Treasury website until 10 December.

A full list of tariffs to be abolished would be published in the next budget.

The government said that Australia would remain committed to open trade, even as “other nations” put up trade barriers.

“We’re proud of the progress that we’ve been able to make unilaterally because tariffs push up compliance costs on business and risk pushing up prices for workers and families as well,” the joint statement read.

“While other nations are putting up trade barriers, we’re tearing them down.”