Businesses are set to save collectively nearly $30m a year in compliance costs with the price of essentials like toothbrushes, washing machines and fridges to fall under major new unilateral tariff reforms.
Australia will abolish nearly 500 “nuisance” tariffs on imported goods under what’s been called “the biggest unilateral tariff reform in at least two decades”.
Starting July 1, tariffs will be scrapped across a range of imported goods, including toothbrushes, fridges, dishwashers, pyjamas, toasters, ballpoint pens and menstrual and sanitary products.
The changes will streamline about $8.5bn worth of annual trade and save businesses more than $30m in compliance costs each year, according to Treasurer Jim Chalmers.
“By abolishing hundreds of import tariffs, we’ll reduce red tape, boost productivity, ease the burden on small businesses and help to cut the cost of doing business,” Dr Chalmers said.
“Tariff reform will provide a small amount of extra help with the cost-of-living challenge by making everyday items such as toothbrushes, tools, fridges, dishwashers and clothing just a little bit cheaper.
“This is meaningful economic reform that will deliver meaningful benefits to businesses of all sizes around Australia.”
According to a 2020 Productivity Commission report, the administrative costs of collecting tariffs cost businesses between $11m to $20m per year.
Tariffs are only applied to a small number of imports, with nearly 90 per cent of imports entering Australia duty-free.
A tariff of 5 per cent is paid on about 10 per cent of imports, raising about $1.5bn in revenue.
Products that will have the 5 per cent customs duty removed include washing machines, where annual imports worth more than $490m raise less than $140,000 in revenue per year, and toothbrushes, where annual imports worth more than $84m raise less than $22,000 in revenue per year.
The government said removing tariffs on menstrual and sanitary items would align tariff policy settings with changes made to the GST.
Trade Minister Don Farrell said with one in four Australian jobs being trade related and 27 per cent of the nation’s economic output being supported by trade, the significance of the changes to the nation’s well being “cannot be overstated”.
“Trade that is simple, fast, and cost-effective can boost Australia’s international competitiveness, help create jobs, and reduce cost-of-living pressures,” Mr Farrell said.
The full list of abolished tariffs will be finalised and provided in the May budget.