Mr McCLELLAND (Barton) (12.45 p.m.)—As we understand the position, the regime to be implemented by the Import Processing Charges Amendment Bill 2005 and the Customs Legislation Amendment (Import Processing Charges) Bill 2005 must be up and running by 20 July this year, which means that there is some urgency in the passage of the legislation through the parliament. Labor will certainly do everything in our power to pass the legislation, subject to some points of clarification that I understand we are obtaining from the minister’s office. We understand that the reason for the deadline is the cut-over date for the start of the integrated cargo system for imports. The integrated cargo system is an electronic portal through which importers and exporters can make their declarations and generally conduct business with Customs.

The integrated cargo system is a product of the cargo management re-engineering project, which has been the subject of some controversy, though it must be said that as a system it is to be welcomed. Obviously, it is in the interests of all participants to avoid excessive paperwork. Indeed, we understand that there was also a rationale of trying to cut costs for industry participants and public servants engaged in the work on behalf of the deputy of Customs. But it is hard to see how these cost savings could eventuate. The reason is simple: the cost has increased tenfold from an original guesstimate of about $20 million to somewhere in the order of $200 million. It appears that the increases keep coming. Not only is this project over budget but also the news of the consequences for industry is late.

Industry have been wringing their hands for about three years now, waiting to test the final product so they can integrate their own information technology systems and train staff. To those importers who went out and invested in the new IT hardware in anticipation of this system being available sooner, I hope that they will be able to compensate by the depreciation that they have already been able to claim. But, despite three years of depreciation when the system should have been up and running earlier, obviously we would have liked to have seen things happen in a timelier manner.

The Minister for Justice and Customs has tried to portray what can only be described as quite a disastrous administration as the fault of the service. We now have a tenfold budget blow-out and the system is three years late, and the minister is yet to acknowledge responsibility. Regarding the latest delay, the system is supposed to be up and running by 1 July with a transition or cut-over period until 20 July. However, it now looks as though the Australian Customs Service may be unable to meet even this date, and who does the minister blame? Not himself, of course, but industry. The minister says industry has clamoured for an increase in the length of the transition period, and perhaps he is right. What he has not told the Australian public is why there is this call for an increased cut-over period. The reason is that the minister did not have a finished product for industry to test.

To reiterate, the product will not be ready for industry testing until it is too late. The minister has got the timing completely wrong. It now looks as though special legislation may be required to allow an extended cut-over period, and, of course, the final date for crossing to the new system is up in the air to a considerable extent. When can industry be confident the final cut-off date will be—September, October, November? They cannot be sure but they have to run at these potential deadlines as hard and as furiously as they can, with all the required overtime and stress that is involved. We do not know precisely and the minister cannot give us answers. It is an issue of tremendous concern, as I have indicated, to the industry.

I would like to move to the technical matters contained in the bills. The bills deal with legislative change and appropriation to bring about the revenue measure outlined in the 2005-06 federal budget. In the coming financial year, it is estimated that approximately 222,000 importers will generate 3.6 million customer declarations, 99 per cent of which will be electronically lodged. Each of these declarations will attract a processing charge, as they currently do. These bills provide the legislative authority for the structure of the import declaration and the warehouse declaration processing charges contained in the Import Processing Charges Act 2001. Under the existing legislation, these charges are calculated with reference to the value of the goods. Currently, imports valued at less than $250 are self-assessed by the importer. The bills will amend the Import Processing Charges Act so that the charges will be assessed by mode of importation—air, sea or post—without reference to the value of the goods. Further, the bills modify the Customs Act 1901 and the Import Processing Charges Act to remove references to the old system of self-assessed clearance declarations and charges. Considered together, the bills remove the self-assessed clearance declaration charge from lower-value imports of below $250 in value. Instead the revenue will be collected through increases in the processing charges.

As I understand it, industry has been consulted quite extensively on this matter and generally supports the move as a way of freeing itself from unnecessary red tape. Labor will therefore support passage of the bills in the House, but not before saying that we have some further queries concerning the amount of revenue that will be collected from industry. As I have indicated, we understand that the bills will be the subject of a further briefing from the minister tomorrow and, while we will be assisting in the expeditious passage of the bills, we will reserve the right to perhaps move amendments to the bills in the Senate, subsequent to the briefing that we receive from the minister.