ECA submission to proposal to recover costs for low value imports—2018 submission

The ECA supports the Australian Government’s focus on free trade and globalisation. ECA seeks policy outcomes which support this focus and facilitate the free flow of goods in and out of Australia. To support this outcome, ECA advocates for policies which seek to minimise the costs associated with the movement of goods and services in and out or Australia.

The 2017 Australia’s International Business Survey (see here) found that around 42% of exporters incorporate goods or services which they import into Australia. Enabling imports to come into Australia as cheaply and simply as possible supports Australian exports, and must be a high priority for Australia’s border agencies. It is also important for Australian exporters that Australia continues to advocate for freer trade internationally, and does nothing domestically to undermine its international advocacy.

The ECA has three main concerns about the introduction of cost recovery for trade and cargo activities on low value imports:

(1) the flat fee structure proposed in the discussion paper would substantially distort the Australian market for low cost goods. Under a flat fee, the lower the cost of an import, the higher the fee would be as a proportion of its value. The higher the fee as a proportion of a good’s value the more the demand for that good is suppressed.

(2) self-assessed clearances (SACs) and the proposed fee collection model has the potential to place a much higher burden on entities lodging between 1,001 and 10,000 SACs per year, relative to those lodging more. This would damage the commercial viability of these entities and hurt competition in the import supply chain.

(3) the policy would be seen internationally as a protectionist measure, particularly coming so soon after extending the GST to low value imports. By substantially increasing its charges on low value imports, the Australian Government would make it more difficult to achieve further ecommerce trade liberalisation, and potentially invite retaliation from trading partners.