In what is being described as another blow for the nation’s eyewear distributors, the Optical Distributors and Manufacturers Association (ODMA) has been alerted to an Australian Border Force (ABF) plan to expand its border tax beyond acetate frames to now incorporate metal frames.
The authority’s 24 May gazette outlined its intention to revoke tariff concession order (TCO) TC 0315708, which covers metal spectacle frames.
“Whilst this news is not entirely unexpected, it is very frustrating and I feel for frames suppliers that are already facing many rising costs,” ODMA CEO Ms Amanda Trotman said.
Tariff pain for Australian eyewear suppliers began in May 2022 when they were blindsided by an ABF decision on plastic eyewear imports.
TCOs are an Australian Government revenue concession that exists where there are no known Australian manufacturers of certain products that are substitutable for imported goods. The original TCO meant importers of acetate frames were exempt from paying a 5% duty rate in Australia.
But that came to an end after Port Macquarie-based Optex Australia notified the ABF that it produces acetate eyewear in Australia (find out the company’s rationale here). The move has hit importers of European eyewear the hardest because Australia doesn’t have a free trade agreement with the continent yet. The vast majority of optical frames sold in Australia are imported, with most of these from the European Union.
According to ODMA, the production capacity of the manufacturer who complained to the ABF is thought to be in the low thousands. The association said revoking the eyewear TCO means the $4 billion optical dispensing and eyewear industry – selling more than 5 million frames each year – is now faced with a 5% tariff on millions of frames imported annually.
This decision, after decades of nil tariffs for the industry, is reported to have increased costs for retailers and consumers, exacerbating cost of living pressures on the millions of Australians who use optical products, as well as putting upward pressure on inflation, ODMA stated.
Now with the TCO revoked for metal frames, Trotman said this was not unexpected given The Customs Delegate took a broad view on what constituted producing substitutable goods when the decision was made to revoke the concession on plastic frames in 2022.
ODMA is still waiting on an update from the Minister of Home Affairs Office despite multiple requests. It was advised that the department requested the ABF explain further the decision it made in 2022 beyond its ODMA appeal response – and that an update would be provided.
“We have been keeping ODMA members updated on the matter and encouraged members to themselves write to the minister’s office. As recent as last week, another letter was sent to the Minister of Home Affairs instigated by an ODMA member via a Federal Member of Parliament,” Trotman said.
ODMA said it would now seek to appeal the latest intention to revoke the metal frames TCO. Interested parties have until close of business 21 June 2023 to provide written reasons why the ABF should not go through with its plan.
ODMA will do this, as well as seek further regulatory advice on other avenues to pursue.
“One further avenue to pursue of course is a broader consumer focused media campaign on the situation given costs often have to be passed on to those selling the eyewear and they often need to pass that increase on to the consumer as there are just so many pressures on costs for every business currently,” Trotman said.
Meanwhile, ODMA is continuing to keep tabs on the EU Free Trade Agreement, which would nullify tariffs imposed by ABF on the large volumes of eyewear coming from Europe.
Trotman said there had been progress on this front following recent comments from Prime Minister Anthony Albanese in the UK.
“ODMA is concerned that these revocation decisions create 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. It is ODMA’s view that the reimposition of these tariffs does little to nothing to assist Australian industry and is to the detriment of Australian consumers,” Trotman added.
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