As part of its 2013-2014 Commonwealth Budget, the Australian Government has announced significant increases in Import Processing Charges for both air freight and sea freight worth more than $10,000.
According to the new charges, sea import declarations will increase by $102.60, from $50 to $152.60 per consignment, while air import declarations will increase by $81.90, from $40.20 to $122.10 per consignment.
Both air and sea consignments worth less than $1,000 face no changes, and will remain free of important charges, while consignments worth between $1,000 and $10,000 will continue to be charged at the existing rate – $50 (sea) and $40.20 (air).
In the budget, which was announced on May 14, the government stated it would “restructure the Import Processing Charge (IPC) to recover the costs of all import related cargo and trade functions undertaken by the Australian Customs and Border Protection Service.
“Currently only a portion of these functions is cost recovered,” the document reveals. “To recover these costs, charges will be increased for consignments valued over $10,000. The increase to the IPC will result in additional revenue of $674.3 million over four years and will be implemented in accordance with the Australian Government’s cost recovery policy.”
The increases will not take effect until January 1, 2014, but with the cost of importing goods into Australia set to greatly increase, they have been criticised in several quarters. As well as retailer groups, exporters have shown their disapproval, as it will affect the cost of importing materials used in manufacturing goods for export – thus increasing their cost and prices.
However, Home Affairs Minister Jason Clare defended the move by highlighting that the charges – the first in more than a decade – only affect imports of more than $10,000 in value.
“The increase to the charge amounts to about 1% on a sea cargo import valued at about $10,000 and less than 1% on an air cargo import of the same value,” he said in a statement.
“The volume of air and sea cargo has increased by almost 800% in the past eight years. Over the same period, IPC revenue has only grown by 29%.”
