- The Hon Dr Jim Chalmers MP, Treasurer
- Senator the Hon Tim Ayres, Minister for Industry and Innovation, Minister for Science
The Hon Dr Jim Chalmers MP, Treasurer:Okay, really pleased to be here with Don Farrell and Tim Ayres. We've been working very closely on the announcement that we're making today. The Albanese government will slash another 500 nuisance tariffs. This builds on the almost 500 that we already abolished, so that in 2 years the Albanese government has slashed more tariffs than any government in the last 2 decades. This means in total almost 1,000 nuisance tariffs slashed under the life of this Albanese Labor government.
We are abolishing these nuisance tariffs to help cut red tape, ease the compliance costs on businesses, boost productivity and take some of the pressure off prices as well. So what we're doing today is we're releasing the list of the additional 500. That will be published on the Treasury website. People will have until the 10th of December to provide feedback on the additional 500 that we are proposing to abolish, and then between the end of that consultation period and the next Budget, we will finalise the list.
We are doing this for a very simple reason. These nuisance tariffs often do more harm than good. Nuisance tariffs push up compliance costs, they push up input costs, they push up prices for consumers as well. So this decision that we are announcing jointly today is all about making it easier for business and governments when it comes to these nuisance tariffs. Often we're talking about very large sums of imports where there is only a tiny sliver of tariff collected. And so, it often costs more to comply with the tariff regime than the government raises or benefits for industry.
I really wanted to thank these 2 colleagues and other colleagues in the cabinet for the work that we've been able to do jointly. This does capitalise on the momentum that was built at the Economic Reform Roundtable. This was one of the areas where the broad consensus was most obvious. We committed to the group that we would consult, and that's what we're doing from today on the additional 500. But at a time when we are looking for every way we can to reduce compliance costs and reduce input costs for businesses and for consumers, this is a really important step.
We're very enthusiastic, as you can tell, about knocking off these nuisance tariffs. This is the second crack that we've had at it, and we will make a meaningful difference as a consequence. What we're talking about here is streamlining around $23 billion worth of trade that will save around $157 million in compliance costs for Australian businesses. And so that's a good development and it's consistent with the steps that we are taking and it's consistent with the consensus and the momentum that was built at the Economic Reform Roundtable.
You're going to hear from Don and then Tim and then happy to take a few questions.
Senator the Hon Don Farrell, Minister for Trade and Tourism: Thank you, Treasurer. And thank you for the constructive way that you've engaged with our department in removing these nuisance tariffs. Tariffs are the top word that people are using right around the world at the moment. We're a country that believes in free and fair trade. We're putting our money where our mouth is, right here with these changes.
We want countries to remove tariff barriers because the way to greater prosperity for our citizens is through free and fair trade. We're demonstrating to the rest of the world that we're serious about this issue. We are prepared to make changes to our tariff system to ensure that we reduce costs for Australian businesses, and we reduce costs for Australian consumers.
We've got some important free trade agreements coming up with the Europeans, with the Indians right now. Our free trade agreement with the United Arab Emirates came into force on the signing a couple of weeks ago. We're demonstrating to the world that we believe in free and fair trade, and this is just one additional way in which we do that.
We need to send a message to all of those countries around the world that protectionism doesn't work – it actually reduces or introduces the opposite of what you expect it to do. You actually make life more expensive for your consumers and you push up unemployment. We're all about helping business and helping consumers reduce their costs. And I'm very pleased to be working with the Treasurer on this score.
On one personal matter, I was at the Midwinter Ball last night. I read in the Sydney Morning Herald that I'm a factional warrior in South Australia for the Liberal Party. I've been called many things in my life –
Chalmers: Who wrote this?
Farrell: I've been called many things in my life, but this is the most –
Chalmers: Pretty much the least kind of thing you could say about someone.
Farrell: Anyway, can I absolutely say that is not true.
Senator the Hon Tim Ayres, Minister for Industry and Innovation, Minister for Science: I want to assure the person who wrote that column that Don Farrell does not hold grudges. He forgets, he forgives, he moves on.
I also want to thank Jim Chalmers and Don Farrell for the work that we've done together on this important set of reforms. And I'm very pleased to announce today that in terms of anti‑dumping reform, that safeguards measures will move across from the Productivity Commission to the Anti‑Dumping Commission.
I have in this job since my appointment been working across industry, across heavy industry, across those smaller contractors in structural steel right through to big industry. And that requirement for a cohesive, effective anti‑dumping regime that is modern and fit for purpose in the different world that we're in, that question of having all of these – all of the tools at the government's disposal in one place is at the top of industry's list.
We have looked at it carefully. We've looked at it in the context of this set of reforms which will remove another 500 nuisance tariffs. That is a good outcome for the economy, but I can tell you that is an important outcome for Australian industry. And I'm delighted that we've worked this through and got, I think, a very high‑quality outcome for Australia. It is an essential building block for a Future Made in Australia to make sure that we're engaged in anti‑dumping reform. Very pleased at the outcome and look forward to talking to you about it over the coming weeks.
Chalmers: Do you want me to drive? Okay. Colleagues, yeah, Matt, then Shane.
Journalist: Do you have any feedback from other countries around these sort of nuisance tariffs, any complaints, that sort of thing? And also can I just ask, this being the first major action you've taken since the roundtable, what will be your first action you'll take on business investment?
Chalmers: You go first, Don, and then I'll take the second part.
Farrell: Look, none of these tariff changes will affect our negotiating positions on those agreements that I just mentioned. These tariffs have tended to cost more to implement than you collect. So I don't think – we don't really need to consult with other countries about whether we do or don't do this. This is a good thing to do for the Australian economy, but other countries will no doubt benefit by that. I suppose the point we're really making here is we want to show the rest of the world that we can lead the way on free, fair, and open trade. And I think this will be welcomed by those countries that we have free trade agreements with and those that we don't.
Chalmers: Yeah, I'll add briefly to that and then I'll answer the second part of your question, then we'll go Shane then Phil.
There are good reasons to swim against the tide a bit on tariffs. You know, as Australians we've got more to gain than most and more to lose than most when it comes to the free and fair and open trade that Don champions as our Trade Minister. And one of the reasons I pay tribute to him and his efforts is because this work that we're doing now is happening in the context obviously of decisions taken out of DC but also the negotiations that he's leading on behalf of our country with the Europeans and with the Indians and others.
And so obviously the tariff landscape in the world is developing quickly, let's say. And so, Don's doing this work in the context of that. It's making it easier for Australian businesses and consumers to get their costs down, and that's why we're doing it. I would contest the point you made about this being the first major action out of the Economic Reform Roundtable. I think the blitzing the backlog of housing approvals is a very important step, pausing and streamlining the Construction Code, accelerating Murray Watt's good work on the EPBC reforms, you know, these are some of the areas where we have already taken urgent action following the welcome consensus that was built at the Economic Reform Roundtable.
But on the question of business investment, we are considering affordable ways that we can encourage more investment in our economy. One of the reasons it's not productive enough is partly because of these compliance costs that we're helping to eliminate today, but also because we haven't had that capital deepening that we need in our economy. The tax system is one lever that we could pull, but it needs to be affordable, it needs to be responsible. And so we'll continue to engage not just with the business groups but more broadly as well to see if there's something more that can be done there. Shane then Phil.
Journalist: Treasurer – and maybe the Minister might want to have an opinion on this – the decision by the Trump administration on de minimis arrangements around low value packages, are you worried that this, given every global postal agency has actually had to stop sending packages into the US, are you worried about how this may have a macro economic effect? And what does that say about the trading – the trade sector given that this going to, as Senator Farrell just said, drive up costs for consumers and unemployment in the United States?
Chalmers: Yeah, I'll throw to Don on the specifics of it, but in terms of the macro impacts, you know, anything that gums up the system, global or domestic, obviously has implications for the more efficient, more productive, more resilient economy that we are trying to build. And so I think Danny Wood and others – and I also thank the PC for their work on nuisance tariffs – they've made the point, as have we as a government, that you need to act on multiple fronts at once. And this is part of ensuring that we do that in the trading system. When it comes to the Australia Post issues, obviously very concerning developments because they risk making that system of free and open trade that Australia benefits so greatly from that much harder. But I'll throw to Don.
Farrell: Yeah, thank you. Look, the – our whole message to the United States has been we don't support the introduction of these tariffs that you've imposed on us, even though we have the lowest tariffs of any country in the world. We continue to prosecute the argument with the Americans that they're actually going down the wrong path. This is actually an action of self‑harm by the American government, and we're going to continue to prosecute that argument. When we first came to government just over 3 years ago we had $20 billion worth of trade impediments imposed on us by the Chinese. People said you've lost that, you're never going to get it back. Over that last 3 years we managed to remove all of those trade impediments, whether they be tariffs or other non‑tariff impediments to the point now where that whole $20 billion worth of trade has been recovered and some more. The last of the products was crayfish. It got back into China just before Christmas last year. Already $400 million worth of Australian crayfish has been delivered to China.
It's worth putting into perspective that $20 billion of trade that we've now got back from China isn't that much short of our total trade to the United States. So, you've got to put that American situation into perspective. America only represents 5 per cent of our trade. Sure, at the international level they represent 13 per cent of world trade, but you've got another 87 per cent of other countries out there for whom we can trade. And, of course, our whole strategy has been diversification. Diversification doesn't mean spending or dealing less with China; it means dealing more with the rest of the world.
I raised with the General Counsel of the United States Trade Representative earlier this week, Jennifer Thornton, our disappointment about the application of these tariffs on small businesses in Australia – about 3,000 of them. They're often mum and dad operations that have had a successful product going into the United States. We've said to the Americans, look, firstly, we don't agree with what you've done, but if you're going to do it, then you've got to do it in a way that people can comply with. These operators were given less than a month to make changes to get their product into the United States, and I'm hopeful that as a result of our representations, we can do something to ensure that our products, our great products, continue to get into the United States.
Chalmers: Let's take 3 more. I said Phil – maybe we'll take more than that. Phil, Katina, Charles, and then I'll see where we're at.
Journalist: Thanks, Treasurer. Look, as to the message you hope – the secondary message you hope to send to the high tariff people in the US and elsewhere, without having seen the list, were any of these directly applied to goods that came in from the US, or were they already all tariff free because of the FTA? And just a quick sneaky in the same theme, did Marles, Richard Marles, raise any of these things in this sort of quick visit over the last few days?
Chalmers: Well, in very reverse order – I haven't had a chance to debrief with Richard yet on this trip to the US. Obviously, he got very senior access and obviously there are a number of important issues at play. I'll have a chat with Richard before long. They're meeting with the Indonesian counterparts today, as you know.
On the American part of these considerations, we came at this primarily from the position of how can we help Australian businesses and Australian consumers. And no doubt it will be seen in the context of tariff developments in DC and around the world, the negotiations that are underway with other counterparts and colleagues. But primarily we came at this from a domestic impact point of view for the reason that Don set out a moment ago. Tariffs are bad for the country that levies them. Tariffs impose additional costs on the people and workers and businesses of the country that levies them. And so what we're trying to do here is to get those compliance costs down, those business and input costs down to put some downward pressure on prices in the economy more broadly. There are – clearly the world will look at developments here, but primarily we've come at it from a domestic point of view.
Farrell: I just might add to that, Treasurer. All of the American products that come into Australia come in tariff free in accordance with our free trade agreement. We continue to honour our obligations under that agreement. And that's especially important because we import twice as much from the United States as we export to them. We haven't sought to apply any tariff, any retaliatory tariff, to the United States. Why is that? Well, I haven't seen any example of where those retaliatory tariffs actually get you a better result. And, importantly, when we had these issues with China, we did not put any reciprocal tariffs on China, and we still managed to resolve those issues.
Chalmers: Okay, Katina, Charles, Josh, Chloe, then we're done.
Journalist: Thanks, Treasurer. Just on other measures out of the roundtable, what advice have you had from Treasury about the hole in petrol excise that will come as EVs rise over the next 5 or 10 years? And given we've sort of seen a trend over the last year of more people buying hybrids than pure EVs, how does that affect your thinking in terms of where you'll put a road user charge on first?
Chalmers: Yeah, first of all, no new advice since the reform roundtable. Obviously that was only knocking off kind of this time last week. We've been working through these issues for a little while now. And, you know, broadly, as you're aware, over time our petrol excise will decline eventually I think to nothing or almost nothing. And the way that trajectory unfolds will partly be about take‑up, including take‑up of hybrids. I'm going to discuss these issues with my state and territory colleagues tomorrow week – Friday of next week. And these sorts of things will be considered, but I don't have kind of new numbers to provide you. We've been working on the assumption for some time that the revenue base will change quite substantially over a period of time – not overnight but over a period of time. We will take the time to get this right, and part of that means discussing it with my state and territory colleagues. And I've also asked that'll Catherine King join those discussions as well because she's doing a mountain of work in this area, and I appreciate it. Charles.
Journalist: Treasurer, Usman Khawaja is in the building today. Have you had a chance to meet with him or someone from the government, and of equal importance, Senator Farrell, because he is the Australian Test opener. The relationship with the US, given the confusion that came out of the Pentagon and the happenstance encounter between the Deputy Prime Minister and the Defence Secretary this week, as someone at the coal face, can you give your read on how the relationship is going at the moment?
Chalmers: Do you want me to go first on Uzzy?
Farrell: Sure.
Chalmers: I have spent time with Usman Khawaja this morning. He's someone I've got a great deal of respect for. He's a friend of mine, and I think I've said this before publicly, in the best way to understand Usman Khawaja is that he is a great cricketer, but that's not his best quality. He's a wonderful humanitarian and a very fine Australian. And I had a good discussion with him this morning. I was also able to join a discussion between Usman and the Prime Minister – a good discussion – in the Prime Minister's office between Usman Khawaja and Prime Minister Albanese. Grateful to the PM for making time for Uzzy, and I'm grateful for Uzzy for making the trip.
Farrell: All right, well, I've now met or spoken to my American counterparts 6 times since the change of government in the United States. We have an open relationship. We obviously have some differences of opinion about tariffs. But I find it's very easy for me to express Australia's point of view to them. Equally, they're very forthright in presenting their arguments to me. This week I've had 3 meetings with the American Chargée, Erika, and, of course, you know, tariffs have come up. And I've met 2 very senior officials of the United States government this week. Their message to us is really positive.
You know, they want a good working relationship with Australia. We're very open to working with the Americans. I don't think – you know, they're our great military ally. Nothing is going to change about that. We don't seek to mix our military issues with our trade issues. We've kept them quite separate, contrary to what the opposition was proposing to do in the last term. We have a very strong relationship with the Americans. We're going to continue to have a strong relationship with the Americans. I'm sure I'm going to continue to receive Americans. I've written to the United States Trade Representative, Jamieson Greer. I had 2 meetings with him in Paris in June. I have written to him to invite him to Australia – in fact, to Adelaide , in fact, to the Clare Valley, South Australia – and I have had a very positive response from him as to his intentions to come.
So, look, we have our differences of opinion. We're going to continue to represent our national interest in our discussions with the United States. But these – you know, our approach has been cool, calm, as it was with China. And we're going to continue to do that with the United States.
Chalmers: Josh then Chloe and then we're done.
Journalist: To go back to the Usman Khawaja question, [indistinct] with the PM. He was in the building today with 2 very strong messages – one about asking the government to go further on gambling advertising, to take action on that issue, and for the government take further action on sanctioning Israel. I believe I'm not verballing, I believe there was some talk about cutting trade ties and things of that nature. You've met with him twice. The PM has met with him as well. Are either of those issues that the government is planning to work on? Were there any commitments given? What was the nature of that discussion? I realise that when you have meetings with people you don't always, you know, walk away with the same, you know, agreement on every point. But what was the outcome of that and are these issues the government is working on?
Chalmers: Yep, both of those discussions were about the Middle East solely – or apart from the Ashes. They were about the Middle East. And from my personal point of view, I talk to Usman about these issues all of the time. His views privately are the views that he expresses publicly. We have a lot of respect for Usman, and we listen to him on these issues, as you'd expect that we would. In my own local community, he's a leader of real substance, not just the leader in the faith community but a leader more broadly. And so I take his contributions very seriously. I'm grateful, as I said to Charles, I'm grateful that he's made the time to come and talk with us directly about these issues. It was solely about the Middle East. Chloe is the last one.
Journalist: Uzzy had said in his presser earlier that the PM meeting had been cancelled. Can you just clarify why it was cancelled and then how and when it got reset? And also, just a follow‑on from Charles's question about Minister Marles in the US and with Hegseth, so meeting, encounter, what's kind of going on there? And what really was the purpose of this trip for the Deputy Prime Minister to go over to the US for a couple of days during a sitting week?
Chalmers: Okay, well, in reverse order – I don't know if Don wants to add to this, and Tim's gotten off lightly, so you might want to think of a tough follow‑up for Tim – I mean, the Deputy Prime Minister of Australia met with the Vice President of the United States. And Secretary Rubio has a number of roles, crucial roles. And, you know, I haven't had a debrief from Richard on the discussions he with the Defence Secretary as well, but by any objective measure going to the US and meeting with people of that seniority in the administration when we have so many issues at play, you know, I find it quite strange, frankly, to see some of this kind of kickback about the trip. I think Richard, as always, is engaging with the American counterparts enthusiastically, diligently, professionally. And he got very, very senior meetings when he was in the US. I also pay tribute to Ambassador Rudd for the role that he would have played in securing those meetings. Can you remind me of your first question?
Journalist: Yeah, and can I throw in another one about tariffs?
Chalmers: The first one was a scheduling one.
Journalist: Yeah.
Chalmers: Yeah, okay. Let me answer that and then I'll – yeah. I think, as always, on sitting days, the diary of the Prime Minister and senior ministers is pretty fluid, pretty hectic. The meeting went ahead, and I was pleased and proud to be able to join it. I did see that there was some coverage about whether that meeting would go ahead, and I'm pleased to have played a role in making sure that it did because it was an important discussion between 2 people who think very deeply about issues in the Middle East.
Last one, and this time I mean it.
Journalist: On the tariffs, you mentioned that it will ease pressure on prices. Will that change be big enough for consumers to notice and, if so, what kinds of products are we talking about?
Chalmers: Yeah, we don't want to overclaim on this front. It will have a modest impact on consumer prices. I think the more meaningful impact will be in terms of getting compliance costs and input costs down. It's a bit mad, frankly, that in some of these areas where we're importing a lot of goods we spend a lot of time and money – 'we' being business and governments – complying with a regime that nets us almost no income and just adds a bigger compliance burden. And so the primary impact here is on compliance costs and input costs – very, very important. We are champions of Australian business, and we'll do what we can to make it easier for them, but we also expect there to be a modest impact on prices, too.
Katina has left us, but I was hoping to say to her and to everyone who helped organise last night's shindig to raise money for charity that we appreciate it a great deal. A lot of work goes into it. If you can tell Katina that that I said thanks to her at the end, I'd appreciate it. She's come and rejoined us! Thank you, Katina for all the work and all of your colleagues. Really important night raising money for a wonderful charity. Thanks so much.