INDUSTRY OPINION:

Paul Zalai - Sydney

pzalai@FTAlliance.com.au @FTAlliance More by Paul Zalai

March 13 2017 - 16:00:00

THE Federal Government is examining the concept of introducing a United States (US) style Department of Homeland Security, bringing together the Department of Immigration and Border Protection (DIBP), its enforcement arm being the Australian Border Force (ABF), the Australian Federal Police (AFP) and the Australian Security Intelligence Organisation (ASIO).

On the surface this makes a lot of sense as integration of these intelligence and enforcement agencies into a single department has the potential of enhancing coordination of national security.

While some media reports suggest high profile Ministers are resisting the concept, it appears to have the support of Peter Dutton, Minister for Immigration and Border Protection and Prime Minister Malcolm Turnbull.

The merging of Immigration and the Australian Customs and Border Protection Service on 1 July 2015 has delivered efficiencies in the passenger processing environment. From an international trade perspective, this merge has had minimal impact with cargo management systems and processes relatively unchanged.

A move to a Homeland Security regime will be a significantly greater paradigm shift with a distinct and increased focus on safeguarding Australians against terrorist activities. Traditional "customs" community protection activities could sit neatly in the new department but what about the role of revenue collection?

Unlike the US government which is in the process of building walls and re-establishing tariffs to protect local industry, Australia continues to remove barriers through Free Trade Agreements which includes the ongoing reduction of import duty revenue.

It is quite possible that over time the residual revenue collection task will transfer to the Australian Taxation Office (ATO).

The Treasury Laws Amendment (GST Low Value Goods) Bill 2017 was introduced by the Treasurer, Scott Morrison and is currently before the Australian Parliament's House of Representatives. This Bill takes the onus away from the traditional revenue collection at the border to a model whereby the Goods & Services Tax (GST) is collected by overseas vendors and remitted to the ATO.

Interestingly, the government is prepared forego duty collection on this category of low value goods due to diminishing tariffs and the complexity and costs of collecting this revenue. From a GST collection perspective, the ABF will take a back seat with the compliance task transferred to the ATO.

Is this a signal of things to come?

What are your views, will processing of cargo at the border continue in line with that of today or will the formation of a new department become the catalyst for change of cargo management processes?

Paul Zalai is an advocate for the Australian Freight and Trade sectors
www.FTAlliance.com.au

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