Empty ships included in Morrison’s new tax grab

The government is set to expand an “import tax” to cover every international vessel entering Australia, including empty ships.

The charge will apply to all international cargo ships entering Australia, including those arrivin­g empty to take exports. Picture: AAP

The Morrison government is set to expand a new “import tax” to cover every international cargo vessel entering Australia — includi­ng empty ships — in what industry has labelled a blatant cash grab and Australia's “first salvo in the global tariff war”.

Industry was informed the shake-up was to be discussed by cabinet last night. Liberal ­National Party senator Barry O’Sullivan has threatened to withhol­d support for the government’s legislation unless key industri­es were carved out of the impost because “every cent would be passed on”.

The Department of Agriculture and Water Resources held a meeting with stakeholders last Wednesday to propose changes to a controversial biosecurity levy unveiled in the May budget, estimated to raise $108 million a year and due to begin next July. The levy triggered an industry backlash because most revenue was to be raised from imported goods such as petroleum, which do not pose a biosecurity risk.

In a key revision, the department told industry groups it would reduce the proposed $1 per tonne levy on “bulk” cargo to 50c per tonne after being warned the move would increase costs by up to 5000 per cent on key inputs for aluminium, steel and cement production.

However, in what industry labell­ed a “complete ambush”, the department also told stakeholders of new plans to impose a volumetric charge on all inter­national commercial vessels entering Australia, levied at 2.7 cents per gross registered tonne.

The charge will apply to all international cargo ships entering Australia, including those arrivin­g empty to take exports. It means the biosecurity levy is still estimated to raise the forecast $325m by 2022.

A broad-based levy of about $10 will still apply for the equivalent of every 20-foot container coming in by sea as well as an impo­st of $1 per metric tonne on “break bulk” cargo, which will capture items including vehicles and farm machinery.

Shipping Australia chief executive Rod Nairn said the new ship-based charge amounted to double taxation and the biosecurity levy looked like “Australia’s first salvo in the globa­l tariff war”. “International ships already cover their bio­security risk cost, which is a componen­t of the ship arrival fee,’’ he said. “So the additional ship levy is double-charging for the same risk element. The way that this levy is being applied defie­s all logic and looks like a money grab.’’

Senator O’Sullivan, the chairman of the Senate’s rural and region­al affairs committee, said he would move amendments to the legislation and reserved his right not to support the bill.

“There’s no one who can question my commitment to policy and bio­security measures in this country,” he said. “This, however, is the advent of the intro­duction of … an impor­t tax affecting all commod­it­ies coming into the country. There are commodities including fuel, products used in the cement indus­try and fertiliser that have zero potential to contribute to biosecurity challeng­es.”

Mr Nairn said the department had shifted the point of charge for the levy from stevedores to ship operators and agents. He said the only way to implement the levy effectively would be for the government to collect the tax directly through the existing Full Import Declaration system because this would minimise administrative costs.