Key Points:
The overarching ambitions of the Agenda and the specific reforms set out within it demonstrate the Government's commitment to driving change in Australian industry.
The Australian Federal Government's new "Industry Innovation and Competitiveness Agenda: An Action Plan for a Stronger Australia" is a broad-based initiative intended to improve Australian competitiveness both here and overseas. A number of its proposals will have an impact on international trade and customs.
What does the Industry Innovation and Competitiveness Agenda seek to achieve?
The Agenda sets out four overarching ambitions:
- a lower cost-business friendly environment with less regulation, lower taxes and more competitive markets;
- a more skilled labour force;
- better economic infrastructure; and
- industry policy that fosters innovation and entrepreneurship.
Five reforms that will affect international trade and investment
To achieve these ambitions, the Agenda sets out a number of specific proposals for reform, some of which are relevant to international trade and investment, as well as customs regulations more broadly, including:
- Consultations with industry led by Australian Customs and Border Protection Service to co-design a "Trusted Trader Programme" (TTP) to streamline customs procedures, to provide exporters and importers who have strong security practices and a history of compliant behaviour, access to streamlined custom procedures that cut red tape by reducing paperwork and inspections and give priority treatment for any trusted trader cargo selected for inspection.
The TTP will be rolled out in phases, and an Industry Advisory Group has been established to provide input as the programme is developed. An early access programme, open to a limited number of exporters, will commence in March 2015. Phasing-in of the full programme will commence in July 2015. The Government will also work with other governments to facilitate trade through international trusted trader arrangements, consistent with the B20 recommendation for practical trade facilitation.
- Accepting trusted international standards and risk assessments. To reduce duplicative domestic regulation, the Government will adopt the principle that if a system, service or product has been approved under a trusted international standard or risk assessment, then Australian regulators should not impose any additional requirements, unless there is a "good and demonstrable reason to do so".
A key component of this initiative is a review of all Commonwealth Government standards and risk assessment processes in each ministerial portfolio and the objective assessment of the need for unique Australia standards or risk assessments.
- Continuing to examine the existing coastal shipping regulations, which have raised coastal shipping costs and reduced the competitiveness of shipping-dependent industries without a real boost to Australian shipping. This commitment is foreshadowed by review action that is currently underway and was reflected in the Government's options paper for regulating coastal shipping released in April 2014.
The agenda does not specify any clear timeframes or deliverables against this reform objective.
- Encouraging foreign investment generally and through specific initiatives such as the appointment of five Senior Investment Specialists to Austrade from the private sector. These specialists will facilitate foreign direct investment projects in areas of strength, including agribusiness and food; major infrastructure; tourism infrastructure; resources and energy; and advanced manufacturing services and technology.
- Development of Industry Growth Centres. The Minister for Industry will seek expressions of interest from business-led consortia to establish five non-profit Industry Growth Centres in sectors where Australia has recognised competitive strengths. Subject to the quality of the expressions of interest, the five initial Centres will be in:
- food and agribusiness;
- mining equipment, technology and services;
- oil, gas and energy resources;
- medical technologies and pharmaceuticals; and
- advanced manufacturing.
Each Center will be tasked with developing and administering initiatives to address impediments to productivity and competitiveness in its industry sector. Each will receive funding of up to $3.5 million per year with a stated objective to become self-sustaining after four years and will have access to apply for grants from a $65 million Growth Centre Project Fund to implement initiatives to deliver sector-wide impacts.
What does this mean for you, and how can you get involved?
The overarching ambitions of the Agenda and the specific reforms set out within it demonstrate the Government's commitment to driving change in Australian industry. Many of the reforms that are relevant to Australian trade and investment have been in the works for some time and some, such as the commitments to review the Australian shipping regulation remain a "watch this space" area of reform, Overall, there are a number of potentially significant areas of reform foreshadowed in the agenda that we will continue to monitor closely.
Other initiatives, such as the commitment to developing the TTP (and the timeframes for early access and rollout in March and July 2015 respectively ) reflect an interest to implement reforms in the short term.
The TTP has the potential to significantly impact the cost of doing business for eligible Australian exporters. Accordingly it is very important that exporters understand the threshold compliance requirements that will apply to inclusion in the TPP and their options for engaging with Australian Customs and Border Protection Service in advance of roll-out of the Programme in March next year.
We would be very happy to discuss this initiative in greater detail with exporters interested in participating in the program.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.
