The official release of the 2014 Budget by the Federal
Government last night has made the anticipated cuts and mergers a
reality, consistent with the Coalition's commitment to bringing
the budget back to surplus and streamline government
But the increased spending on border protection shows a change
in focus away from the traditional role and identity of customs in
Australia, creating uncertainty for industry.
CUSTOMS AND IMMIGRATION MERGER
Further to our eAlert on Friday 9 May 2014, to better manage
services at Australia's borders, the merger between the
Australian Customs and Border Protection Service
("Customs") and the Department of
Immigration (which will include the creation of the Australian
Border Force ("ABF")) will cost $480.5
million with 480 jobs lost.
According to Immigration Minister Scott Morrison, this will
include the movement of policy, strategy, planning, trade
facilitation and customs services officers from Customs to the new
Department of Immigration and Border Protection and the
establishment of a training college for officers.
This significant commitment is inconsistent with the substantial
cuts to almost all Federal Government functions and the
Government's focus back to "small government".
With a focus on enforcement and border protection key to the
merger, there are still a lot of unanswered questions. Mr Pezzullo
(the CEO of Customs) said that the ABF "will draw together the
operational border, investigations, compliance, detention and
enforcement functions of our service and the Department of
Immigration and Border Protection," and that "Policy,
regulatory and corporate functions will combine within the broader
There has been little discussion on the how this will affect the
more traditional (albeit the less exciting) functions of Customs
such as tariffs, import and export controls, reporting and revenue
collection. However the Customs portfolio Budget Statement has
announced a commitment to design a trusted trader programme to
foster legitimate trade.
Nonetheless, the merger will now rank Customs alongside the
Australian Federal Police, ASIO and the Defence Force, which
represents a change in focus, evident with the removal of the words
"Customs" and "Service" in the new title of the
Department of Immigration and Border Protection.
MERGER OF COMMONWEALTH TRIBUNALS
Consistent with the speculation leading into the announcement of
the 2014 Budget, there have been cuts to 36 government agencies.
This includes the merger of the Australian Administrative Appeals
Tribunal ("AAT") with the Social
Security Appeals Tribunal, Refugee Review Tribunal, Migration
Review Tribunal and Classification Review Board. The single body
will retain the name of the AAT, which should not impact those in
the trade and transport environment too heavily in their day to day
operations. However, we are yet to see how this will work with the
NATIONAL AUDIT REPORT RECOMMENDATIONS
In addition to these mergers, the Budget has addressed a number
of other issues identified by the National Commission of
Audit's Report ("Report"), on which
we provided comments in our CTT Update on 2 May 2014.
While the Report recommended abolishing Austrade and the Export
Finance & Insurance Corporation EFIC, this has not been done in
However, the budget will deliver on a number of industry
assistance programmes that the Report recommended to be cut (where
there to be no genuine market failure deemed and where benefits
accrue entirely for the Government largely to the firm or industry
supported) with the closure of the Automotive Transformation Scheme
and the Ethanol Production Subsidies to name a few.
SUBSIDIES FOR SMALL BUSINESS EXPORTERS
Despite the large cuts to almost every facet of the Federal
Government's functions, Agriculture Minister Barnaby Joyce has
secured $15m for small business exporters so that they may remain
competitive and profitable internationally.
Those in the meat, dairy, fish, horticulture and grain
industries will be able to apply for a rebate in of up to $5000 in
2014-15, which will cover 50% of export registration charges.
FINALISING THE BUDGET
Of course all of these changes still need to be passed through
Parliament, including the Senate (of which the Government does not
have control). So it remains to be seen whether politically all of
these changes can be achieved.
As always, we'll keep you updated with more details as they
come to hand.
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