EXPLANATORY STATEMENT
Statutory Rules 1982 No. 335
Customs Regulations (Amendment)
Issued by the Authority of the Minister of State for the Capital Territory acting for and on behalf of the Minister of State for Industry and Commerce.
The purpose of these regulations is to amend the Customs Regulations to give effect to the Government’s decision to remove the provisions in the regulations enabling the “manufacture in bond” of wood and articles of wood from imported timber.
The decision to remove this facility forms part of a range of Government measures of long-term assistance for the Timber Industry in Australia. It follows the Government’s acceptance of a recommendation by the Industries Assistance Commission (IAC) in its Report No. 275 of 17 August 1981 entitled “Wood and Articles of Wood”.
In October 1981 the Government announced that a decision on the IAC report would be deferred so that the recommendations of the Commission could be considered along with the Senate Standing Committee on Trade and Commerce report on Australia’s Forestry and Forest Products Industries and the Forest Products Industries Advisory Council report on Australia’s Forest Products Industries. The deferrment has allowed long-term policies for the industry to be formulated after full consideration of the proposals and recommendations contained in the three reports.
The “manufacture in bond” facility provides a means whereby payment of duty on imported timber used for manufacture in licenced warehouses (also known as “bonds” or “bond stores”) may be deferred until manufactured for sale or use.
In its report the IAC commented that “this long-standing facility for “manufacture in bond” of timber and timber products perpetuates a number of undesirable anomalies and distortions:
• It discriminates against users of small quantities of imported timber whose potential duty savings would not offset their costs of operating a “bond”;
• the significant duty savings through allowances for waste are not available to other industries;
• it lowers the rate of tariff assistance which has been considered appropriate for the processing of local timber; and
by reducing the duty payable on imported inputs it raises the level of effective assistance for some manufacturers”.
It was for these reasons that the Commission recommended that the provisions for “manufacture in bond” of the timber products be terminated.