The Optical Distributors and Manufacturers Association (ODMA) is re-energised in its fight to abolish tariffs imposed on European eyewear imports in recent years after news the government is reviewing “nuisance tariffs” hindering Australian businesses.
In an announcement to its member businesses, ODMA said after exhausting several avenues, it had now written to the Treasury Department to ask that tariffs on optical products be included in the list of nuisance tariffs.
This comes after “a legislative technicality penalised our industry and its consumers without providing any broader benefit”, resulting in a 5% border tax hike for eyewear imports into Australia from any country without a free trade agreement.
On 11 March, the Federal Government revealed plans to abolish around 500 nuisance tariffs “in the biggest unilateral tariff reform in two decades” to boost productivity, reduce compliance costs for businesses and ease the cost of living for Australian families by more than $120 million over the next four years.
“We consider that these [optical] tariffs are consistent with the description of the treasurer, the Hon. Dr Jim Chalmers MP when he stated, ‘Australian workers and businesses are not protected by these tariffs, but they still have to navigate the red tape involved and bear the costs of complying with the tariff regime’,” ODMA stated.
“These tariffs do nothing but increase costs to businesses and consumers and achieve no benefit for local manufacturing.”
The saga began on 7 July 2022 when the Australian Border Force (ABF) revoked a tariff concession order (TCO) for plastic spectacle frames that had been in place since 2003, with retrospective effect from 13 May 2022. Several months later, this was extended to metal frames, meaning that all eyewear imports into Australia from the European Union (EU) and other places without a free trade agreement were subject to the border tax.
ODMA said the TCOs had been in place for decades given Australia’s “essentially non-existent domestic manufacturing capabilities in our sector”. However, the ABF’s decision was made following an application from a small, boutique, luxury Australian eyewear manufacturer operating from regional NSW.
“We understand the production capacity of this manufacturer to be in the low thousands,” ODMA said.
“ODMA filed an appeal against the ABF decision on 5 August 2022. However, that appeal was rejected on 15 September 2022. The ABF has since expanded on this decision and revoked an additional TCO (0315708) covering metal frames from 23 May 2023.”
The effect of revoking the TCO means the $4 billion optical dispensing and eyewear industry – which ODMA estimated sells more than five million frames each year – is now faced with a 5% tariff on millions of frames imported annually.
“This decision has, after decades of nil tariffs for the industry, increased costs for retailers and consumers, unnecessarily exacerbated cost of living pressures on the millions of Australians who use optical products and contributed to the upward pressure on inflation,” ODMA CEO Ms Amanda Trotman said in the Treasury Department letter.
“The decision has also created significant additional red tape and uncertainly for our members who are now faced with further administrative burdens when determining which products and countries the tariff applies to. We are aware of a number of instances where this has resulted in members needing to spend time changing paperwork and challenging incorrect tariff charges.”
ODMA said administrative costs associated with the imposed tariffs were particularly concerning for its small business members, many of whom also face cashflow challenges given the retrospective nature of the TCO revocation.
“At the same time, they are also experiencing rapidly increasing power bills and interest rates alongside a declining economic outlook,” Trotman said.
The tone of ODMA’s letter intended to show that removing these tariffs would return the longstanding policy position and ensure Australian companies no longer faced the recent increased compliance and cost burden imposed. Plus, that such a move would level the playing field between products from the EU and China.
“Given the unfortunate delay in progressing the EU-FTA – which we were hopeful would be a solution to these nuisance tariffs – were the tariffs [we propose] not removed as part of this process, Australian businesses would essentially be encouraged, by virtue of government policy, to preference Chinese-made goods over those from European countries,” Trotman said.
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