Australian Government Plans to Abolish 500 ‘Nuisance’ Import Tariffs

Keeping the dishwasher's filter, gasket seal, and spray arms clean will ensure sparkling dishes. Oxanaso/Shutterstock

The federal Labor government plans to abolish nearly 500 tariffs from July 1 this year on a large range of imported goods.

These include tariffs on dishwashers, hand tools, fridges, clothing, and menstrual and sanitary products.

The move is aimed at reducing compliance costs and red tape for businesses and improving productivity.

Abolishing these tariffs will save businesses more than $30 million ($19.9 US dollars) in compliance per year, the government said, and streamline $8.5 billion worth of annual trade.

The Treasury described the reform as the “biggest unilateral tariff reform in at least two decades.”

A consultation on these reforms is now taking place and submissions will close on April 1. A full list of the tariffs to be abolished will be provided in the budget.

Treasurer Jim Chalmers said the tariff reform will help with the cost of living by making everyday items such as toothbrushes, tools, fridges, dishwashers, and clothing a little cheaper.

He said these tariffs impose a “regulatory burden” on Australian businesses and raise the costs of imported goods.

“But they do little to protect our workers and businesses because they apply to goods that are mostly already eligible for duty‑free importation,” he said.

“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.

“This is meaningful economic reform that will deliver meaningful benefits to businesses of all sizes around Australia. These tariff reforms will be better for businesses, better for consumers, and better for the economy.”

The government provided examples of products where a 5 percent custom duty currently applies, with very little revenue delivered to the government.

For example, washing machines with annual imports that are worth more than$490 million, raise lower than $140,000 each year.

And toothbrushes with annual imports worth over $84 million deliver less than $22,000 in revenue per year.

Cost of Living Top of Mind: Opposition

The opposition said cost of living was a concern, especially with recent national account figures showing the “slowest two-quarters of consecutive GDP growth in almost 18 years outside of the pandemic.”

Shadow Treasurer Angus Taylor said on March 6 that for many Australian families, it feels as if they scraped through the pandemic only to find themselves working harder than ever.

“We need to restore our standard of living and build the foundations for continued prosperity. That is why a Peter Dutton Coalition government is committed to strong budget management and a back-to-basics economic agenda that reduces cost of living pressures, cuts red tape, and supports aspiration,” he said.

“A Coalition government will deliver policies that take pressure off small businesses and households, increase home ownership, boost productivity, and reward aspiration and hard work.”

Reform Aimed at Simplifying Trading System

The government said the reforms will simplify Australia’s trading system by removing compliance costs for Australian businesses, especially small to medium enterprises.

“After successive trade agreements, most goods are now imported duty‑free. This means that businesses spend time and money proving their imports are eligible for existing tariff preferences and concessions, a compliance cost they often pass on to consumers,” the government said.

Minister for Trade and Tourism Don Farrell said trade that is “simple, fast, and cost‑effective” can boost Australia’s international competitiveness, create jobs, and reduce cost of living pressures.

“With one in four Australian jobs trade‑related, and 27 percent of Australia’s economic output supported by trade, the importance of trade to Australia’s national wellbeing cannot be overstated.”

Meanwhile, minister for Agriculture, Fisheries, and Forestry, Senator Murray Watt added scrapping these tariffs is good for Aussie farmers and consumers.

“A decade of Coalition inaction was a productivity handbrake on our farms, and we have been determined to fix that,” Mr. Watt said.

Further, Minister for Home Affairs and Cyber Security Clare O'Neil said reducing costs for Australian consumers is a priority.

“Eliminating these tariffs will mean cheaper goods for Australians and less complicated compliance for Australian businesses,” she said.

Australian Economy Grew Only 1.5 percent in 2023

Australian Bureau of Statistics (ABS) figures released on March 7 showed the nation’s economy grew only 1.5 percent in 2023.

Australia’s GDP grew from $600.5 billion (US$398 billion) in December 2002 to $609.8 billion in December 2023

Further, December quarter figures showed Australian GDP rose just 0.2 percent from $608.3 billion to $609.8 billion.

“Government spending and private business investment were the main drivers of GDP growth this quarter,” ABS national accounts head Katherine Keenan said.

In addition, household consumption rose just 0.1 percent during the December quarter, after a fall of 0.2 percent in the previous quarter.

Further, imports of goods and services overall dropped 3.4 percent in the December quarter, due to less consumption and capital goods coming into Australia.