Massive cut on 500 tariffs could save Aussies money and reduce household expenses

Australia is gearing up for a significant economic shift.

The government has announced that it will scrap nearly 500 tariffs on imported goods, a decision that promises to ease the financial strain on both businesses and consumers.

This is the largest change to the tariff system in over twenty years, and it's expected to have a tangible impact on the cost of living for many Australians.



Starting 1 July, a wide array of everyday items, including toothbrushes, dishwashers, washing machines, fridges, toasters, pyjamas, ballpoint pens, and even menstrual and sanitary products, may see a reduction in price.

This is because the tariffs—taxes imposed on imported goods—that currently add to the cost of these items will be abolished.

It's a change that's not just about saving a few cents here and there; it's about making the cost of living more manageable, especially at a time when every penny counts.

Treasurer Jim Chalmers highlighted that this tariff reform is expected to save businesses more than $30 million in compliance costs each year—a significant figure, considering that the administrative burden of managing tariffs can be both costly and time-consuming for businesses.



By reducing these expenses, companies can potentially pass on the savings to consumers, leading to lower prices for a variety of goods.

Moreover, the reform is set to streamline approximately $8.5 billion worth of annual trade.


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Australia is set to scrap nearly 500 tariffs on imported goods starting 1 July. Image source: Shutterstock.


'By abolishing hundreds of import tariffs, we’ll reduce red tape, boost productivity, ease the burden on small businesses and help to cut the cost of doing business,' Treasurer Chalmers said.

'This is meaningful economic reform that will deliver meaningful benefits to businesses of all sizes around Australia.'



It's worth noting that tariffs are currently only applied to a small fraction of imports, with nearly 90 per cent of goods entering Australia duty-free.

However, the remaining 10 per cent that are subject to a five per cent customs duty can add up, especially when considering the volume of trade involved.

For example, the government pointed out that washing machines, which see annual imports worth over $490 million, generate less than $140,000 in revenue from tariffs.

Similarly, toothbrush imports, worth more than $84 million, raise less than $22,000 in revenue.

Removing these tariffs is a strategic decision to reduce unnecessary costs without significantly impacting government revenue.



In addition to the economic benefits, there's also a social aspect to this reform.

The removal of tariffs on menstrual and sanitary products is a move that reportedly aligns with previous changes made to the Goods and Services Tax (GST) and represents a step towards gender equity in taxation.

It also acknowledges the essential nature of these products and removes an additional financial barrier to accessing them.

Trade Minister Don Farrell has emphasised the importance of trade to the Australian economy, with one in four jobs being trade-related and 27 per cent of the nation's economic output supported by trade.

'Trade that is simple, fast, and cost-effective can boost Australia’s international competitiveness, help create jobs, and reduce cost-of-living pressures,' Mr Farrell said.

The finalised list of all eliminated tariffs will be included in the May budget.
Key Takeaways
  • Australia is set to remove nearly 500 tariffs on imported goods.
  • This tariff elimination will streamline trade, reduce business costs by around $30m annually, and ultimately make everyday items cheaper for consumers.
  • Starting 1 July, the reforms will mean that tariffs will no longer apply to a range of goods, including toothbrushes, fridges, dishwashers, and menstrual and sanitary products.
  • The government said that these changes will boost productivity, reduce cost-of-living pressure on households, and provide significant economic benefits to businesses across Australia.
What are your thoughts on this latest news? Let us know in the comments below.
 
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Will the prices go dow on these items or will they stay the same price therefore giving more profit to the supermarkets? I did hear chopsticks was also among the goods to have their tariffs cut. In the article it does say "may see a reduction in price". If 90% of the goods that come into Australia are duty free, why do we get slugged so much for everything?
 
I’m really happy at this news of cost reduction. I mean for example, everyone knows of the huge profits these big corporations make, yet they keep upping the prices. Sadly there are so many homeless people, due to profiteering. Thank you .
 
May come down? Why only may come down, surely these items should come down and the government needs to make sure they do. I’m guessing something else will go up to compensate the government for the lost revenue. I bet the government don’t spruik about whatever goes up to compensate for the lost revenue either, it will be sneakily imposed on the public.
 
Apart from the menstrual and sanitary products, just how much is this going to save the normal consumer, not a great deal I would suggest. It may help the importers and sellers of the products who probably wont pass the saving on to joe public. It's just virtue signalling by the government saying it will ease the cost of living and them trying to make themselves appear our benevolent benefactors.
 
May come down? Why only may come down, surely these items should come down and the government needs to make sure they do. I’m guessing something else will go up to compensate the government for the lost revenue. I bet the government don’t spruik about whatever goes up to compensate for the lost revenue either, it will be sneakily imposed on the public.
You want the government to have more control? Move to North Korea.
 
The Dunce party won't cut much needed petrol tax AND has unleashed Australians to depend on only renewables ( when no wind, how will the wind turbines work) Power too high, yet won't build much need nuclear that will reduce most costs, yet now reduce taxes on toothnrishes etc. Yeah right now that toothbrush for toothless people is really a much needed commondity.........Dddd...
 
Wherever a government reduces tax take somewhere it grabs it from somewhere else. Tarif reductions on these imported items will line the pockets of the importer and not assist those in the community struggling with cost of living, there is only an expectation to pass these on.
 
By reducing these expenses, companies can potentially pass on the savings to consumers, leading to lower prices for a variety of goods.

So, does that mean we will actually see the prices decrease? Or will it be like the banks who pick and choose whether to pass on rates changes?
The above comment appears to indicate that there is no compulsion to pass on the savings.
Great idea, hope it works for us.
 
The Dunce party won't cut much needed petrol tax AND has unleashed Australians to depend on only renewables ( when no wind, how will the wind turbines work) Power too high, yet won't build much need nuclear that will reduce most costs, yet now reduce taxes on toothnrishes etc. Yeah right now that toothbrush for toothless people is really a much needed commondity.........Dddd...
Here's a question. I don't see asked. When the country speeds toward Electric cars and the tax take on petrol goes to hell in a handbasket, where will the government replace their loss of petrol tax from? I can see mileage tax being introduced.
 
All that's going to do is flood the marked with more crap from overseas, and put more Australian products out of business. What Australian Government needs to do is more help and incentives for Australian Owned & Made business. The way things are going nothing is going to be made or owned by Australian Companies. Glad I'm old as I don't like where Australian is heading.
 
Apart from the menstrual and sanitary products, just how much is this going to save the normal consumer, not a great deal I would suggest. It may help the importers and sellers of the products who probably wont pass the saving on to joe public. It's just virtue signalling by the government saying it will ease the cost of living and them trying to make themselves appear our benevolent benefactors.
It won’t even save consumers on sanitary products! They’ll just keep the prices up anyway and keep the profits
 
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