Australia WT/TPR/S/178 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
1. Australia's economic policies, practices, and m easures, including those related to trade, are 
exceptionally transparent, especially in terms of their nature and rati onale.  This transparency often 
involves independent evaluation of their cost-effectiv eness;  that is, their co sts in relation to their 
benefits.  Transparency enhances government acc ountability and hence public debate over the merits 
of its policies, practices, and measures.  Transparen cy has thus greatly contributed to the continual 
process of structural reform, which has been aimed at reducing, if not removing, distortions to competition in order to improve the functioning of  markets for goods, services, labour, and capital, 
thereby accomplishing a more efficient use of resour ces.  The latter has been reflected in rising 
productivity in the economy as a whole and hence in creasing competitiveness in world markets.  The 
outcome has been that the Austra lian economy has achieved one of the fastest rates of growth among 
OECD countries during the past 15 years or so (Chapter  I).  Trade liberalization, much of it unilateral, 
has been an integral part of the structural refo rms that have contributed to Australia's impressive 
economic performance.  Such liberalization has c ontinued during the period under review (2002-06);  
however, some tariff and non-tariff barriers to trade remain.   
2. The tariff remains one of the main instruments of Australia's trade po licy.  As a result of 
unilateral reductions (on 1 January 2 005) in tariffs applied to textiles, clothing, and footwear (TCF) as 
well as to passenger motor vehicles (PMVs), the overa ll simple average applied MFN tariff rate fell 
from 4.5% in 2002 to 3.8% in 2006.  Notwithstandi ng the cuts in tariffs applied to TCF and PMV 
products, their rates are still considerably higher than the average applied MFN rate.  While almost 
97% of Australia's tariffs are bound, more than 40%  of its bound rates currently exceed applied MFN 
rates by at least five percentage points, largely as a consequence of the reductions in tariffs on TCF 
and PMV products.  While this potentially imparts a degree of unpredictability to the tariff, there has 
not been any increase in applied tariff rates duri ng the period under review.  A few tariff lines are 
subject to non- ad valorem  rates, which tend to conceal relatively high tariff rates.  In particular, 
judging from its high average ad valorem  equivalent (AVE), the compound duty on used or 
second-hand vehicles is potentially prohibitive. 
3. Although Australia continues to maintain stri ct sanitary and phytosanitary (SPS) measures, 
steps have been taken to improve import risk anal yses in order to make the process more transparent, 
efficient, and timely.  The share of national standa rds that are equivalent to international standards 
remains at around 40%.  According to the authoriti es, this is largely because international standards 
covering the same areas do not exist.   
4. Australia has no plans to become a party to the WTO Agreement on Government 
Procurement, holding that accession to the agre ement would impose unnecessary costs and delays on 
procurement operations.  Its government procur ement of motor vehicles still incorporates 
local-content requirements. 
5. Assistance is provided in order to encourage dom estic industry development.  Such assistance 
may take the form of tariff concessions, tax incen tives, grants, or concessional loans.  Assistance 
delivered through the tax system accounts for mo re than two-fifths of total annual budgetary 
assistance;  details are published annually in th e Tax Expenditure Statement, enhancing the 
transparency of this assistance (which would ot herwise be opaque).  The import duty credit under the 
Automotive Competitiveness and Investment Scheme (A CIS) is the most significant industry-specific 
assistance programme.  However, the apparent lack  of cost-benefit analysis of some schemes, WT/TPR/S/178 Trade Policy Review 
Page 30 
 
 
including tax measures, makes it difficult to determ ine whether the assistance has yielded net social 
benefits. 
6. Reform regarding competition policy continues.  In particular, the review of the National 
Competition Policy has resulted in a new National Re form Agenda (NRA), including competition and 
regulatory reforms.  In addition, with a view to  reducing the regulatory burden, the Banks taskforce 
made a large number of recommendations (including regular review and cost-benefit analysis of 
regulations), most of which have been accepted, fully  or partially, by the Government (Chapter II). 
7. Australia's recently signed regional trade agre ements changed various aspects of its trade 
policies, such as rules of origin, government procur ement, and particularly protection of intellectual 
property rights.  As a consequence of the signing of the Australia–United States Free Trade 
Agreement (AUSFTA), amendments were made to  the Copyright Act 1968 and minor changes made 
to the Patents Act 1990.  The authorities state that so me changes, such as in  the area of government 
procurement, would be extended to all WTO Members on an MFN basis.1 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration and documentation requirements 
8. Under the Customs Act 1901, a customs declaration is required for most imports.2  A n  
Integrated Cargo System (ICS) commenced for im ports in October 2005;  with the intention of 
improving the cargo reporting process, the ICS replaced  all previous cargo declaration systems (such 
as EXIT, Compile, Air Cargo Automation, and Sea Cargo Automation).3  To use the ICS, clients must 
register with the Australian Customs Services (Custo ms);  import declarations lodged electronically 
are given priority.4  In 2004/05, 99.4% of Customs entries in Australia were processed electronically.5  
Customs clearance may be undertaken by either the importer, or a customs broker;  the latter must be 
licensed by Customs.  For imports subject to quarantine restrictions, ICS import declarations must include both Customs and Australian Quaran tine Inspection Service (AQIS) requirements.
6  
Documentation requirements remain unchanged.7   
9. Australia has no preshipment inspection require ments for imports or exports.  Preshipment 
requirements, if applicable, are determined on a case-by-case basis. 
                                                      
1 The authorities gave two reasons for extending the results to all countries:  firstly, a non-
discriminatory framework for government procurement is believed to be conducive to ensuring value for 
money;  and secondly, the Government did not want to sustain two procurement frameworks.   
2 Some imports are exempted from customs declar ation requirements:  accompanied or unaccompanied 
personal or household effects;  goods  not exceeding $A 1,000 per consignmen t;  containers belonging to persons 
carrying on business in Australia and intended for re-export;  and containers manufactured in Australia and 
continuing to be the property of a person carrying on business in Australia.  In addition, permission may be 
granted for "like customable goods"  and "special clearance goods" to be  delivered for home consumption 
without a customs declaration being lodged at the time of importation.   
3 The ICS commenced for exports on 22 September 2004, and for imports on 12 October 2005. 
4 Customs (2005b). 
5 Customs (2005a), p. 22. 
6 DAFF (2005b). 
7 WTO (2003).  Minimum documentation requirements remain unchanged since 1998;  they include an 
airway bill or bill of lading, invoices, and any other papers (including packing lists, insurance documents, etc.) 
relating to the shipment.  Imports subject to quarantine re strictions require special ce rtificates, issued by the 
authorities in the country of export, confirming that the goods meet Australian regulatory requirements.  Import permits are also required for certain goods subject to controls or restrictions. Australia WT/TPR/S/178 
 Page 31 
 
 
(ii) Tariffs 
(a) Tariff structure 
10. Since the previous Review, the tariff classification system has been changed from the 
Harmonized Commodity Description and Coding System (HS) 1996 to HS 2002.  Australia grants at 
least MFN treatment to imports from all its trading pa rtners.  Its 2006 tariff has 6,124 lines, of which, 
6,107 (99.7%) are ad valorem , which ensures a high degree of tran sparency of the tariff.  Australia 
continues to submit its customs tariff and trade data regularly to the WTO Integrated Data Base.  It 
also submits its tariffs to the APEC tariff database project.  The tariff continues to be a minor source 
of tax revenue (2% of total tax revenues in  2004/05) (section (4)(i), and Table III.6).8 
11. Tariffs increase the price of imported goods, wh ich allows scope for domestic producers of 
similar products to increase their prices.  If the im ported goods are used as inputs, by increasing their 
prices, tariffs increase their cost to local industri es.  For example, in 2003/04, the services sector 
received an estimated $A 800 million in budgetary assistance;  however, tariffs on manufactured inputs increased services industries’ costs by an estimated $A 2.8 billion that year.
9 
12. Based on the 2006 eight-digit tariff schedule, 96.7%  of tariff lines are bound;  bindings cover 
100% of agricultural tariff lines and 96.2% of non-agri cultural products (WTO de finitions);  95.9% of 
the non-agricultural products are fully bound.  The fi nal/current average bound rate is 10.0%.  Bound 
rates range from zero to 29% (veg etables) for agriculture, and from zero to 55% (clothing) for non-
agricultural products.   
13. On average, Australia's applied MFN tariffs are low;  47.6% of all tariff lines are duty free, a 
further 38.7% bear tariffs of between zero and 5% .  In 2006, the simple average applied MFN tariffs 
for agricultural products (WTO definition) a nd non-agricultural products are 1.5% and 4.1%, 
respectively (Table III.1).  In addition, the overall simple average applied MFN tariff rate has fallen 
from 4.5% in 2002 to 3.8% in 2006, as a result of unilateral tariff reductions in 2005.  On 1 January 2005, tariffs were reduced from 15%  to 10%, for passenger motor vehicles (PMV), 
components, and replacement parts, and are schedul ed to be reduced to 5% in 2010.  The applied 
tariffs for textiles, clothing, and footwear (TCF) were reduced on 1 January 2005:  from 25% to 
17.5% on apparel and certain finish ed textile articles;  from 15% to 10% on cotton sheeting, woven 
fabrics, footwear, and carpets;  and from 10% to  7.5% on sleeping bags, table linen, and footwear 
parts.  No further unilateral tariff reduction on TCF imports are envisaged until 2010 and 2015.
10  
Notwithstanding these unilateral reductions in tariffs  applied to TCF and PM V products, their rates 
remain considerably higher than the average applied MFN rate of 3.8%.  
14. Largely as a consequence of these reductions, more than 40% of Australia's bound rates 
currently exceed applied MFN rates by at least five percentage points (Chart III.1).  This gap provides 
the authorities with considerable scope to raise applied rates, potentially imparting a degree of 
unpredictability to the tariff.  In practice, there has been no increase in any applied tariff rates during 
the period under review.   
                                                      
8 As the calculation of Australian import duty is based on the free-on-board (f.o.b.) value, the actual 
tariff imposed is lower than in economies that calculate duty on the cost, insurance, and freight (c.i.f.) value 
(APEC, 2004). 
9 Productivity Commission (2004). 
10 Tariffs on apparel and certain finished textile artic les are to be reduced to 10%, and other TCF goods 
to 5% on 1 January 2010;  tariffs on apparel and certain finished textile articles are to be reduced to 5% on 
1 January 2015. WT/TPR/S/178 Trade Policy Review 
Page 32 
 
 
Table III.1 
Structure of the MFN tariff, 2002-06 
(Per cent)  
    2002 2003 2004 2005 2006 Final 
bounda 
1. Bound tariff lines (% of all tariff lines) 96.7 96.7 96.7 96.7 96.7 96.7 
2. Simple average applied rate 4.5 4.5 4.5 3.8 3.8 10.0 
 Agricultural products (HS01-24) 1.4 1.4 1.4 1.4 1.4 3.5 
 Industrial products (HS25-97) 5.0 5.0 5.0 4.2 4.2 11.1 
 WTO agricultural products 1.5 1.5 1.5 1.5 1.5 3.9 
 WTO non-agricultural products 5.0 5.0 5.0 4.1 4.1 10.9 
 Textiles and clothing 12. 4 12.4 12.4 12. 1 12.1 24.3 
3. Domestic tariff "peaks" (% of all tariff lines)b 11.4 11.4 11.3 4.1 4.1 5.6 
4. International tariff "peaks" (% of all tariff lines)c 4.1 4.1 4.1 4.1 4.1 13.5 
5. Overall standard deviation of tariff rates 9.9 9.9 9.9 8.9 8.9 11.2 
6. Coefficient of variation of ta riff rates 2.2 2.2 2.2 2.3 2.3 1.1 
7. Duty-free tariff lines (% of all tariff lines) 47.4 47.4 47.6 47.6 47.6 20.8 
8. Non- ad valorem  tariffs (% of all tariff lines) 0.3 0.3 0.3 0.3 0.3 3.6 
9. Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 0.0 
10. Nuisance applied rates (% of all tariff lines)d 0.0* 0.0* 0.0* 0.0* 0.0* 9.5 
* Negligible. 
a Implementation of the U.R. was reached in 2000.  Calculati ons are based on 5,921 bound tariff lines (representing 96.7% of to tal 
lines), out of which 5,904 (96.4%) are fully bound and 17 (0.3%) are partially bound.  
b Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: Calculations include AVEs provided by the authorities for non- ad valorem  rates.  AVEs have been ad justed accordingly (e.g. a 
compound tariff line's applied MFN rate equals 15% + $A 12,000 in  2002;  the given AVE equals 207.5%.  For the same line the 
applied MFN rate equals 10% + $A 12,000 in 2006;  its AVE becomes 202.5%). 
Source : WTO calculations, based on data provide d by the authorities of Australia. 
15. The dispersion in applied MFN rates declined as a result of unilateral tariff reductions in 
2005;  the standard deviation of tariff rates fell from 9.9 in 2004 to 8.9 in 2006, and the coefficient of variation has increased slightly.  Tariff escalation rema ins:  on average, Australian tariffs on primary 
products are considerably lower than on semi-proce ssed and processed goods, particularly in textiles, 
clothing and leather, and food,  beverages and tobacco, as well as non-metallic mineral products and 
fabricated metal products and machinery (Chart III.2).
11  Tariff escalation constitutes a potential 
obstacle for developing country exports of semi-p rocessed and processed goods to Australia, and thus 
could impede their industrialization process.12  
16. Only a few (0.3%) tariff lines are subject to non- ad valorem  rates, which tend to conceal 
relatively high tariff rates.  These involve a specific rate of $A 1.22/kg applied to five items (cheese 
and curd), an alternate rate of 5% or $A 0.45/kg , whichever is lower, applied to four items (fruit 
juices), and a compound rate of 10% (15% in 2002) plus $A 12,000 per unit a pplied to eight items 
(used or second-hand vehicles).13  Although the average AVE for the latter was 206.8% in 2006, the 
                                                      
11 Exceptions include wood and furniture, and paper, paper products and printing and publishing.   
12 As Australia grants duty-free and quota-free acce ss to all goods origina ting in the 50 LDCs 
designated by the UN (Chapter II(6)( ii)(a)), these LDCs do not face any ta riff escalation once the relevant rules 
of origin are complied with.  Imports originating in th e 50 LDCs comprise 0.2% of Australia's total imports. 
13 The ad valorem  equivalents (AVEs) are computed on the basis of unit values for imports of the items 
concerned over the period 1999-01.  The average AVEs fo r alternate duties (fruit jui ces), specific rates (cheese Australia WT/TPR/S/178 
 Page 33 
 
 
authorities state that the tariff has not been applied since the commencement of a registered 
automotive workshop scheme (RAWS) in 2002, which allows a RAW to import up to 130 vehicles 
per category every 12 months, in compliance with the Australian design rules (ADRs).  However, 
imports under the RAW scheme must be "specialist and enthusiast vehicles" (Chapter IV(4)(ii)).  This 
suggests that the compound duty is prohibitive for imports of other types of used or second hand 
vehicles.14 
0.02.55.07.510.012.515.017.520.022.525.0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Calculations include AVEs for non- ad valorem  rates, provided by the authorities.  
Sections 7, 8, 11, 12, 13, 15, 16, 17, 18 and 20 are not fully bound.
WTO Secretariat calculations, based on data provided by the Australian authorities.Per centChart III.1                       
Average applied MFN and bound tariff rates, by HS section, 2002 and 2006
Note:
Source :01   Live animals & prod.        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals and prod.
16   Machinery
17   Transport equipment
18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.
21   Works of art, etc.MFN 2002
MFN 2006 
Bound
Average applied rate 
2002  (4.5%)Average applied rate
 2006  (3.8%)Average bound rate
(10.0%)
 
17. Tariff quotas involving specific rates apply to most types of cheese and curd imports.15  Since 
the previous Review of Australia, the out-of-quota  (above 11,500 tonnes) and in-quota rates for these 
products have been kept at $A 1, 220 per tonne and $A 96 per tonne, respectively.  Future cheese and 
curd import arrangements are to be considered in the context of the WTO negotiations on agriculture.  
Imports from LDCs, partners cove red by regional trade agreements (New Zealand, Singapore, 
Thailand, and the United States), and the South Paci fic Forum island countries are exempt from this 
quota.   
                                                                                                                                                                     
and curd), and compound rates (used or second hand vehicles) are 3%, 23.8% and 206.8%, respectively, in 
2006. 
14 The authorities state that, where imports of thes e vehicles are permitted, the applied tariff is 
significantly lower.  
15 Camembert, brie, roquefort, stilton and goat milk  cheeses are exempt from the quota scheme.  
Customs online information.  Viewed at:  h ttp://www.customs.gov.au/webdata/resources/files/ 
FScheesecurd1.pdf [15 September 2006]. WT/TPR/S/178 Trade Policy Review 
Page 34 
 
 
n.a.n.a.0246810121416
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishing Chemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherChart III.2
Tariff escalation by 2-digit ISIC industry, 2002 and 2006
n.a.n.a.0246810121416
Food,
beverages
and tobaccoTextiles and
leatherWood and
furniturePaper,
printing and
publishingChemicals Non-metallic
mineral
products Basic metal Fabricated
metal
products and
machineryOtherAverage applied rate in manufacturing
(4.8%)
Not applicable.
Calculations include AVEs for non- ad valorem rates, provided by the authorities to the WTO.
WTO Secretariat calculations, based on data provided by the Australian authorities.n.a.
Note:
Source :Per cent
First stage of processing Fully processed Semi-processedPer cent
Average applied rate in manufacturing
(4.1%)2002
2006
 Australia WT/TPR/S/178 
 Page 35 
 
 
18. Australia has unilateral preferential and regional trade agreements with a number of countries 
(Chapter II(6)(ii)).  Duty-free and quota-free access in  particular is provided for goods originating in 
the 50 LDCs, Papua New Guinea, New Zealand, and Singapore.  However, bi lateral tariff reductions 
resulting from the recently signed RTAs lead to lower tariffs for some developed countries than those 
granted to around 90 developing countries (or economies) under the Generalized System of 
Preferences (GSP) (Table III.2).  
Table III.2 
Australia's MFN and preferential tariff regime, 2006 
(Per cent)  
  Overall 
average WTO 
agriculture WTO non-
agriculture Leather, 
rubber, 
footwear & 
travel goods Textiles & 
clothing Transport 
equipment 
MFN 3.8 1.5 4.1 5.6 8.9 12.1 
New Zealand (ANZCERTA) 0.0 0.0 0.0 0.0 0.0 0.0 
Singapore (SAFTA) 0.0 0.0 0.0 0.0 0.0 0.0 
Thailand (TAFTA) 1.1 0.0 1.2 1.7 5.4 0.5 
United States (AUSFTA) 1.4 0.0 1.6 0.4 7.1 8.1 
Canada (CANATA) 3.4 1.3 3.7 5.0 8.7 9.4 
Papua New Guinea (PATCRA) 0.0 0.0 0.0 0.0 0.0 0.0 
SPARTECAa 0.3 0.0 0.3 0.0 0.0 8.1 
Norfolk Island Act, Christmas Island 
Agreement, Cocos Islands Act, 
Australian Territories, Heard & 
McDonald Islands, Australian 
Antarctica 0.0 0.0 0.0 0.0 0.0 0.0 
GSPb 1.3 0.1 1.4 1.5 5.2 8.1 
GSPc 3.6 1.2 3.9 5.6 8.9 12.0 
DCTd 3.7 1.3 4.0 5.6 8.9 12.1 
Malaysia (MATA) 3.6 1.2 3.9 5.5 8.9 12.0 
LDC 0.0 0.0 0.0 0.0 0.0 0.0 
a Forum Islands - South Pacific Regional Tr ade and Economic Cooperation Agreement.  
b GSP for New Caledonia, Northern Mariana Islands, Wallis and Fut una Islands, Tokelau, Pitcairn, Namibia, Palau, Guam, French 
Polynesia, Botswana, and American Samoa.  
c GSP for around 90 countries and economies. 
d Republic of Korea;  Chinese Taipei;  and Hong Kong, China. 
Note: Calculations include AVEs for non- ad valorem rates provided by the authorities to the WTO. 
Source : WTO calculations, based on data provide d by the authorities of Australia.  
(b) Duty concession schemes  
19. Australia has a number of tariff assistance schemes for local industry.  Total duty forgone 
through these schemes has been stable sin ce the previous review (Table III.3).16 
                                                      
16 After the Automotive Competitiveness Investment Scheme (ACIS) was launched on 1 January 2001, 
total amount forgone duty revenue increased sharply from $A 788.7 million in 2000/01, to $A 1,373.8 million in 2001/02.  Since then, total duty forgone has been stable. WT/TPR/S/178 Trade Policy Review 
Page 36 
 
 
Table III.3 
Duty forgone through tariff concession arrangements, 2002-06 
($A million) 
Industry assistance measure 2002/03 2003/04 2004/05 2005/06b 
Tariff Concession Scheme 489.0 477.4 552.3 509.3 
Textile Clothing and Footwear Policy By-Law 38.5 26.8 20.4 6.9 
TRADEX 138.7 129.3 93.8 33.0 
Project By-Law Schemea 7.1 n.a. n.a. n.a. 
Enhanced Project By-Laws 20.7 52.2 52.7 12.2 
Cheese and curd quota scheme 10.7 11.8 12.5 6.8 
Automotive Competitiveness Investment  Scheme (ACIS) 555.6 586.9 531.1 224.2 
CIM .. 6.6 5.8 2.6 
Other concessions 102.3 105.3 113.3 48.9 
Total 1,368.2 1,395.0 1,380.9 843.0 
.. Not available. 
n.a. Not applicable. 
a The Project by-law scheme wa s replaced by the Enhanced Project By-Laws in July 2002. 
b Data for 2005/06 are for the first six months only. 
Source : The Australian authorities. 
Duty deferral – customs warehouses 
20. The duty deferral facility allows imported goods to be stored in a customs licensed 
warehouse.  These goods (referred to as "under bond ") are under Customs control until the owner is 
ready to sell them for domestic consumption and pay the duty, or export them.17   
Tariff concessions18 
21. Australia's Tariff Concession System is ava ilable for imports for which substitutable goods 
(Australian-made goods with a use corresponding to that of the imported goods) were not produced in 
Australia at the time a Tariff Concession Order (TCO) application was lodged.19  The main change to 
the system occurred on 11 May 2005, when a minimum 3% duty charged on goods with a TCO that were identified as business inputs was removed.  As  a result, all goods are allowed to be imported 
duty free.  It is estimated that this removal el iminated a cost imposed on Australian industries and 
consumers of around $A 300 million a year.
20  Certain products do not qualify for a TCO;  these 
include, inter alia,  food stuffs, most textiles and clothing, cer tain motor vehicles and parts, jewellery, 
and furniture.21  The authorities state that these goods we re excluded because local industry had been 
established to produce these goods.  
                                                      
17 Customs (2000b). 
18 Customs (2000c). 
19 In a TCO application process, Customs must publish the details of the application in the 
Commonwealth Gazette  within 28 days after the application is r eceived.  Appeals against the proposed TCO 
must be made to Customs within 50 days from the date of the publication, and a decision on whether to grant a 
TCO is to be made within 150 days from the date of the publication.  When a TCO is granted, it becomes 
effective from the date the application was first rece ived by Customs.  All goods covered by the TCO 
description (not only the applicant's goods) and entering Australia on or after that date, are eligible for tariff 
concessions. 
20 Productivity Commission (2006e). 
21 Regulation 185 and Schedule 2 of the Customs Regulations.   Australia WT/TPR/S/178 
 Page 37 
 
 
Other duty concession schemes 
22. Other duty reduction or exemption arrangement s include:  the Enhanced Project By-Law 
Scheme (EPBS), the Automotive Competitiveness Invest ment Scheme (ACIS), the textiles, clothing 
and footwear policy by-laws (Chapter IV), th e Trade and Export Concession Scheme (TRADEX) 
(section (3)), the Certain Inputs to Manufacture (CIM) programme (section (3)), and the Space 
Concession programme.22   
23. The EPBS, which replaced the Project By-Law Scheme in July 2002 with much wider 
coverage, provides duty-free entry for eligible goods  (capital equipment and machinery) for projects 
in agriculture, food processing, food packaging, manufacturing, mining, resource processing, gas 
supply industries and, from 1 July 2006, power supp ly and water supply industries.  These goods must 
not be produced in Australia, or the imports need to be technologically superior to those made in 
Australia.  Total expenditure on capita l goods for eligible projects must be no less than $A 10 million.  
In addition, an EPBS applicant must develop and im plement an Australian Industry Participation plan 
(AIP), under which, the applicant is "required" to de monstrate the intention to provide full, "fair", and 
"reasonable" opportunity for Australian industry to  participate in all aspects of the project.23  
However, the authorities maintain that these "requirements" are not compulsory. 
24. Under the ACIS, import duty credits are issued quart erly to eligible participants, to encourage 
new investment and innovation in the automotive indus try.  These credits can be used to discharge 
customs duty on subsequent eligible automotive imports;   the credits can also be sold or transferred 
(Chapter IV(4)(ii)).  Although most textiles, clothi ng, footwear, and headwear products are exempted 
from the tariff concession system, some can be imported duty free under various by-laws 
(Chapter IV(4)(i)).24   
(iii) Other charges affecting imports 
(a) Indirect taxes 
25. Apart from customs duties, imports are subject to a goods and services tax (GST), as well as 
excise taxes (imported goods are subject to a duty collected at the border that is equivalent to an 
excise on the like domestic goods) (section (4)(i)(a));  a wine equalisation tax (W ET) or luxury car tax 
(LCT) may also apply to certain goods.  The GST applies to most imported goods25, and is applied at 
10% of the value of the taxable import, which is the sum of its customs value, tariff payable, 
international transport and insura nce, and any WET (if applicable).26  The Australian Taxation Office 
administers a deferred GST scheme, under which aut horized entities are allowed to defer their GST 
liability on imported goods until the twenty-first day of the following month.   
                                                      
22 The Space Concession programme a llows duty-free entry of  goods used in auth orized space projects, 
with a view to increasing the competitiveness of the sp ace industry in Australia. 
23 DITR online information.  Viewed at:  http ://www.industry.gov.au/assets/documents/itrinternet/ 
AIP_Plan_Customer_Guide%20V2_May_%200420051020132749.pdf.  According to the authorities, the AIP 
intends to assist Australian firms to compete with international ones, as the relative small size of the Australian economy, together with its geographical distance from ma jor markets of Europe and North America, as well as 
the trend towards greater use of established supply chains by international investors could obstruct Australian 
industry's participation in major projects.   
24 Productivity Commission (2003c), p. 247. 
25 A few exemptions to GST include certain foodstuffs, some medical aids and imports that qualify for 
certain duty concessions.   
26 Customs (2002).   WT/TPR/S/178 Trade Policy Review 
Page 38 
 
 
26. In 2002, an excise was introduced on imported and domestically produced ethanol for use as 
fuel;  the rate was equivalent to that applying to petrol.27  However, for the first 12 months, the excise 
paid by domestic producers of ethanol was rebated.28  Thus, the tax levied functioned as a tariff.  The 
WET applies to domestic and imported wine and other similar fermented beverag es, at a rate of 29%.  
Motor vehicles (except motor cycles or similar vehicles)  are subject to the LCT if they are designed to 
carry a load of less than two tonnes and fewer than  nine passengers, and if their GST-inclusive value 
is above a threshold determined a nnually by the Commissioner of Taxation;  it is set at $A 57,009 for 
2006/07.29  The LCT is levied at the rate of 25%  on the GST-exclusive value that exceeds the 
threshold.30  Although applicable to both domestically produced and imported luxury cars, the LCT 
tends to discriminate against imported vehicles, wh ich usually have higher prices than domestically 
produced ones, partly as a result of relatively high tariffs.31  In 2004/05, 97% of the LCT was 
collected on imported vehicles.   
(b) Other charges 
27. Import declaration processing charges are imposed for goods imported by air, sea, and post.  
Charges continue to be set on a cost-recovery basis;   however, this system was restructured in July 
2005 in line with the Cargo Management Reengineeri ng (CMR) project, to reflect additional costs for 
Customs in relation to, inter alia,  quarantine processing for foot and mouth disease, container 
examination logistics, and the cost of implementing the CMR project. 32  In 2006, the Government 
announced a further increase to Customs import declaration processing charges.33  Charges are not 
based on import values.34   
(iv) Customs valuation and rules of origin 
(a) Customs valuation 
28. Australia has implemented the GATT/WTO Agre ement on Customs Valuation since 1981;  it 
has not invoked provisions on delayed implem entation.  The Customs Act 1901 replicates the 
GATT/WTO Agreement by providing a number of di fferent methods for valuation, which must be 
                                                      
27 Australian Customs Notice 2002/53, Customs Tariff Proposal No. 3 - Ethanol, 18 September 2002.  
Viewed at:  http://www.customs.gov.au/site /page.cfm?c=2616 [2 0 November 2006]. 
28 Productivity Commission (2002b). 
29 The LCT threshold is indexed annually to changes in the subgroup of motor vehicle purchases under 
the Consumer Price Index.  The threshold does not increase if the indexation factor is less than 1.  The threshold 
in 2006/07 is equal to that in 2005/06.   
30 To calculate the LCT for an imported vehicle:  fi rst, the sum of a vehicle's customs value, import 
duty, and any international transport an d insurance, equals its value of taxable importation (VoTI).  GST is paid 
at 10% on the VoTI.  If the sum of the VoTI and the GST is higher than the threshold ($A 57,009), LCT must be 
paid.  The LCT is calculated at 25% on the gap between the value and the threshold from which the GST is then deducted (Customs, 2005b).  
31 The authorities maintain that the LCT does not discriminate against imported vehicles as it applies to 
both Australian and imported vehicles, and that the majority of vehicles are valued below the LCT threshold. 
32 For example, the minimum charges for electronically  lodged declarations in creased from $A 44 to 
$A 49.50 per declaration for sea imports, and from $A 27.10 to $ A30.10 for air and postal imports.  Charges for manually lodged declarations remain the same (Customs online information.  Viewed at:  
http://www.customs.gov.au/site/page. cfm?u=4982  [22 March 2006]). 
33 The minimum charges for electroni cally lodged declarations increas ed from $A 49.50 to $A 50.00 
per declaration for sea imports, and from $A 30.10 to $A 40.20 for air and postal imports (Customs online 
information.  Viewed a t:  http//:www.customs.gov.au /site/page.cfm?u=4368#1). 
34 Australian Customs Notice No. 2006/21, Changes to Import Processing Charges.  Viewed at:  
http://www.customs.gov.au/webdata/resources/no tices/ACN0621.pdf [20 November 2006].   Australia WT/TPR/S/178 
 Page 39 
 
 
used in sequence;  the most common is the transaction value method.35  Customs value of imported 
goods is calculated on a free-on-board (f.o.b.) basis.   
(b) Rules of origin  
29. Australia applies rules of origin in accordan ce with the WTO Agreement on Rules of Origin, 
and participates actively in the work of the WTO Committee on Rules of Origin (CRO), as well as the 
Technical Committee on Rules of Origin (TCRO).  Australia provides non-reciprocal preferential 
tariff access to imports originating in developing countries and LDCs, if:  the imports are wholly 
produced in the country where they originate;  they are wholly manufactured in the country from originating materials;  or the last process in the manufacture occurs in that country, and a specified 
local-content threshold is met.  A 50% threshold (using the factory cost method) applies to Papua 
New Guinea, the Forum Islands, developing countri es and LDCs (under the Australian System of 
Tariff Preferences)
36;  a threshold of 25% or 50% (depending on whether the goods are commercially 
manufactured in Australia) applies to Australia's external territories including the Cocos (Keeling) 
Islands, Christmas Island, and Norfolk Island.   
30. Australia's reciprocal preferential trade agreements with Canada, Singapore and New Zealand 
operate on the same basis as the non-reciprocal rules of origin.  The local-content threshold varies:  
25% or 75% (depending on whether the goods are commercially manufactured in Australia) for goods originating in Canada
37, 50% for New Zealand, and 50% or 30% for Singapore. 
31. Australia's most recent regional trade agreemen ts with Thailand and the United States have 
adopted a different approach to determine the orig in of a good.  Under the Thailand–Australia Free 
Trade Agreement, and the Australia–United States Fr ee Trade Agreement, rules of origin are based on 
changes of tariff classification.38  In addition, under the Australia–New Zealand Closer Economic 
Relations Trade Agreement, new rules of origin ba sed on a change in the tariff classification (at the 
HS six-digit level) are to be adopted as of 1 January 2007 (Chapter II(6)(ii)).  The existing 50% 
local-content threshold will optionally apply in parallel for a period of five years. 
(v) Import prohibitions, restrictions, and licensing 
32. Import prohibitions or restricti ons may be applied for various reasons, including public health 
or safety concerns, animal and plant life, envir onmental conservation, security and international 
commitments.  For restricted im ports, if certain conditions are me t, non-automatic import permits may 
be issued by the Australian Customs Service, the Australian Quarantine Inspection Service, or other 
agencies (Table III.4).39  
                                                      
35 When the transaction value method cannot be used the other methods are:  identical goods value, 
similar goods value, deductive (contemporary sales) valu e, deductive (later sales) value, deductive (derived 
goods sale) value, computed value, and fall-back value method (Customs, 2004). 
36 For Papua New Guinea and the Forum Islands, in special circumstances the 50% threshold may be 
reduced to 48%. 
37 In the case of Canada, direct shipment is also a condition. 
38 Customs (2005c and d).  A regional value content (RVC) requirement may be applied, either as an 
additional requirement, or as an optional test. 
39 Australia does not impose automatic import licensing. WT/TPR/S/178 Trade Policy Review 
Page 40 
 
 
Table III.4 
Main import prohibitions, restrictions, and controls, 2006 
Goods Reason Policy agenc y/permit issuing agency 
Prohibited    
Dogs - dangerous breeds, and related advertising 
matter Public health or safety concerns  
Embryo clones - viable materials, and related 
advertising matter Public health or safety concerns   
Suicide devices Community protection   
Diamonds - from Liberia International commitment   
Restricted   
Therapeutic substances and goods (antibiotics)  Public health or  safety concerns Therapeutic Goods Association, Department 
of Health and Ageing 
ANZAC, and related advertising materials National symbol Depa rtment for Veteran's Affairs 
Australian flag and coats of arms National sym bol Department of Prim e Minister and Cabinet; 
Australian Customs Service 
Hazardous and health-related goods (glucomannan in 
tablet form, seat-belt accessories, autotrend sun filters, 
victim toys, smokeless tobacco products, diveman underwater breathing apparatus, "quickie" line release 
system, gas masks contai ning asbestos, cigarette 
lighters) Public health or safety concerns  Australian Competition and Consumer 
Commission 
Cat and dog fur products Animal welfare Australian Customs Service 
Glazed ceramic warea Public health or safety con cerns Australian Customs Service 
Cetaceans (whales, dolphins, and porpoise s) Environmental conservation Departme nt of the Environment and Heritage 
Chemical weapons  In ternational commitment 
(Convention on the Prohibition 
of the Development, Production, Stockpiling and Use of Chemical 
Weapons and their Destruction 
(CWC)) Australian Safeguards and Non-Proliferation 
Office in the Department of Foreign Affairs 
and Trade 
Cosmetics – toxic materials Public health or  safety concerns Australian Customs Service 
Credit cards – counterfeit  Community protection Australian Federal Police, Attorney General’s 
Department 
Crowd control equipment Community pr otection Australian Customs Service 
Papua New Guinea cultural items  International commitments Department  of the Environment and Heritage 
Diamonds – from Sierra Leone Inte rnational commitments Department  of Foreign Affairs and Trade 
Dog collars – electronic and protrusion An imal welfare Australian Customs Service 
Drugs and narcotics Public health or safety concerns, 
International commitments 
(Single Convention on Narcotic 
Drugs 1961, the Convention on 
Psychotropic Substances 1971, and the Convention Against 
Illicit Traffic in Narcotic Drugs 
and Psychotropic Substances 
1988) Department of Health and Ageing 
Endangered species of wild fauna and flora International commitment 
(Convention on International 
Trade in Endangered Species 
(CITES)) Department of the Environment and Heritage 
Erasers resembling food in scent or appearance Public h ealth or safety concerns Australian Customs Service 
Fish/toothfish Environmental conservati on Department of the Environment and 
Heritage;  Department of Agriculture, Fisheries, and Forestry 
Fly swatters/mosquito bats – electronic  Public hea lth or safety concerns Australian Customs Service 
Marked fuels (duty-free fuel marked to signify that it is 
not for use in internal combustion engines) Domestic regulation Australian Customs Service 
Table III.4 (cont'd)Australia WT/TPR/S/178 
 Page 41 
 
 
Goods Reason Policy agenc y/permit issuing agency 
Growth hormones and substances of human or animal 
origin Public health or safety concerns Therapeutic Goods Administration, 
Department of Health and Ageing 
Hazardous waste International commitments 
(Basel Convention, OECD 
Council Decision C(92)39) National Industrial Chemicals Notification 
and Assessment Scheme in the Australian 
Department of Health and Ageing; 
Department of the Environment and Heritage 
Certain industrial chemicals Public  health or safety concerns, 
environmental conservation Department of the Environment and Heritage 
Kava Public health or safety concerns Therapeutic Goods Administration, 
Department of Health and Ageing 
Knives and daggers Community protection Australian Customs Service 
Logs and timber products – from Liberia International commitment (UN 
Security Council Resolutions)  Department of Foreign Affairs and Trade 
Goods coated with or c ontaining unsuitable mineral 
compounds (toys, cosmetics, money boxes, pencils) Public health or safety con cerns Australian Customs Service 
   
Ozone depleting substances Environmental 
conservation/International 
commitment (Ozone Protection 
and Synthetic Greenhouse Gas 
Management Act 1989) Department of the Environment and Heritage 
Organochlorine chemicals (pesticides) P ublic health or safety concerns, 
environmental conservation Department of Agriculture, Fisheries and 
Forestry 
Objectionable material Community protection O ffice of Film and Lite rature Classification 
Radioactive substances Community protection, 
international commitments Australian Radiation Protection and Nuclear 
Safety Agency; Department of Health and 
Ageing 
Steroids Public health or safety concerns Therapeutic Goods Administration, 
Department for Health and Ageing 
Therapeutic drugs and substances Public health or safety concerns Therapeutic Goods Administration, 
Department of Health and Ageing 
Tobacco leaf Domestic regulation Australian Taxation Office 
Weapons, firearms, and parts of firearms Commun ity protection Attorney-General's Department 
Woolpacks and woolpack caps Domestic  regulat ion Department of Agri culture, Fisheries and 
Forestry 
a No permit is needed for importation.  However, a testing cer tificate is required from the Australian Government Analytical 
Laboratory or a testing agency a pproved by the National Association of Testing Authorities Australia.  
Source:  Customs online information.  Vi ewed at:  http://www.customs.gov.au/s ite/page.cfm?u=4369;  WTO document 
G/LIC/N/3/AUS/3, 23 October 2006;  and Cu stoms (Prohibited Imports) Regulations 1956.  
(vi) Contingency measures 
(a) Anti-dumping and countervailing measures 
33. Australia's anti-dumping and countervailing legi slation is based on the Agreement on 
Implementation of Article VI of the GATT 1994 (t he Anti-Dumping Agreement) and the Agreement 
on Subsidies and Countervailing Measures (the Subsidi es Agreement).  Major domestic legislation in 
this regard includes:  the Customs Act 1901, which sets out the general inquiry process;  the Customs 
Tariff (Anti-Dumping) Act 1975, which provides for the imposition of anti-dumping and 
countervailing duties; and the Customs Administration Act 1985, which establishes some 
administrative matters and associated regulations.40    
                                                      
40 Customs (2005e).   WT/TPR/S/178 Trade Policy Review 
Page 42 
 
 
34. The institutional and procedural framework on  anti-dumping and countervailing measures has 
remained unchanged since the previous Review of Aust ralia;  these measures continue to be subject to 
a five-year sunset clause.41  Parties may appeal adverse Customs decisions under the Administrative 
Decisions (Judicial Review) Act 1977, the Ombudsman Act 197642, or the Customs Act 1901.43  
Imports from New Zealand remain excluded from an ti-dumping actions (as these are dealt with under 
competition laws)44;  the authorities stated that competition legi slation has never been exercised in this 
regard.  
35. Australia's recourse to anti-dumping action has been declining;  initiations fell from 16 in 
2002 to 2 in 2005.45  Of the total 35 anti-dumping initiations  between 2002 and 2005, 15 were subject 
to provisional measures, and another 15 resulte d in definitive measures (involving anti-dumping 
duties and minimum export prices).  Imports affected include plastics, base metals, chemicals, pulp of 
wood/paper or paperboard, and textiles.  The Memb ers affected most include the EC15, China, and 
the Republic of Korea.  Since 2002, there have  been four countervailing initiations, making 
six initiations overall at end 2004.46  These initiations cover canned tomatoes from Italy, and olive oil 
(virgin and refined) from Greece, Italy, and Spain.  
(b) Safeguards 
36. Australia has no specific legislation for the imposition of safeguard measures.47  T h e  
Productivity Commission remains the investigating authority.  Following consideration by the 
Australian Government, the Treasurer may refer matte rs to the Productivity Commission for inquiry.  
Safeguard measures are applied to a product being im ported irrespective of its source;  exceptions are 
products originating from Singapore48, New Zealand, and from developing country WTO Members, if 
certain conditions are met.  Pursuant to the AUSFTA  and TAFTA, products determined to be of U.S. 
or Thai origin, may also be excluded.49   
37. TAFTA also contains provisions for special safeguard (SSG) measures for imports of some 
sensitive agricultural products;  fo r example, Australia has reserved SSG rights from 2005 to 2008, for 
                                                      
41 Customs online information, Anti-Dumping and Countervailing Investigation Process.  Viewed at: 
http://www.customs.gov.au/webdata/r esources/files/Anti_dumping_and_cou ntervailing_investigation_process1.
pdf [24 March 2006]. 
42 WTO (2003). 
43 Under the Customs Act 1901, a Trade Remedies Review Office was set up to allow parties to apply 
for review of certain anti dumping and countervailing decision.  
44 Under the ANZCERTA, both countries have precl uded anti-dumping action against goods that are 
the produce or manufacture of the other.  However, actions may be taken for exports from New Zealand under 
the Trade Practices Act (Customs, 2000a).  Also, counterva iling actions can be applied.  In addition, Article 15 
of the ANZCERTA provides for third-country anti-dumpi ng actions to be taken in cases where dumped imports 
into Australia or New Zealand from a third country are causing or threatening to cause material injury to 
industry.  
45 WTO online information.  Viewed at:  h ttp://www.wto.org/english /tratop_e/adp_e/adp_ 
stattab2_e.xls. [28 March 2006]. 
46 WTO online information.  Viewed at:  http://w ww.wto.org/english/tratop_e/scm_e/scm_e.htm  
[28 March 2006]. 
47 Procedures for safeguard investigations are contained in Gazette  No. S297 of 25 June 1998.  Also see 
WTO documents G/SG/N/1/AUS/2, 2 July 1998, and G/SG/N/1/AUS/2/Suppl.1, 16 December 2005.  
48 Under the SAFTA, products determined to be of Singapore origin are excluded from the inquiry;  the 
two countries agreed not to apply safeguard measures against each other's products.   
49  For imports of U.S. origin, exceptions are those that are not a substantial cause of serious injury or 
threat thereof;  for imports of Thai or igin, those that are not a cause of seri ous injury or threat thereof, nor of 
serious damage or actual threat may be excluded (WTO document G/SG/N/1/AUS/2/Suppl.1, 16 December 2005). Australia WT/TPR/S/178 
 Page 43 
 
 
prepared or preserved tuna, skipjack and bon ito, as well as pineapples and pineapple juice.50  Australia 
imposed special safeguards in October 2005 on ca nned tuna, and in August 2006 and September 2006 
on canned pineapple and canned tuna, resp ectively, imported from Thailand.   
(vii) Standards and other technical requirements 
(a) Standards, testing, and certification 
Standards 
38. Legislative, executive, and judicial powers relating to technical regulations and standards are 
shared between the Commonwealth and state and territory governments.51  Currently, the institutional 
framework for standards consists of four main bodi es:  Standards Australia, which is a not-for-profit 
company responsible for the formulation of sta ndards;  the National Association of Testing 
Authorities (NATA), and the Joint Accreditation System of Australia and New Zealand (JAS-ANZ), two accreditation bodies;  and the National Measureme nt Institute (NMI), established in July 2004 to 
integrate the country's physical, chemical, and biological measurement and metrology.
52   
39. Australia has two types of standard:  voluntary and regulatory.53  The majority of voluntary 
standards are developed and publis hed by Standards Australia.  Voluntary standards are often made 
mandatory by reference in technical regulations , and become regulatory (mandatory) standards.54  
Standards Australia has published 6,850 standards,  approximately 2,400 of which have become 
mandatory.  Australia's policy is that standards shoul d be compatible with re levant international or 
internationally accepted standards or practices, with a view to minimizing impediments to trade.  In 
particular, mandatory standards s hould be consistent with Austra lia's international obligations.55  
However, in the absence of a suitable international standard, national standards are developed, with 
transparency and consensus being two key requirem ents.  The share of national standards that are 
equivalent to international standards remains at around 40%.56  International equivalence is high in, 
inter alia , electronic and IT products. 
40. The Department of Industry, Tourism and Resources (DITR), representing the 
Commonwealth Government, has a Memorandum of Understanding (MOU) with Standards Australia 
International Ltd (trading name "Standards Au stralia").  Revised in 2003, the MOU recognizes 
                                                      
50 DFAT online information.  Viewed at:  http://www.dfat.gov.au/trade/negotiations/aust-thai/ 
tafta_annex_5.html [21 September 2006]. 
51 WTO document G/TBT/2/Add.8/Rev.1, 29 May 2001. 
52 The NMI combines the National Measurement Laboratory from the Commonwealth Scientific and 
Industrial Research Organisation (CSIRO), the National Standards Commission, and the Australian Government Analytical Laboratories;  it resides within the De partment of Industry, Tourism, and Resources.   
53 Standards are reviewed regularly, the major ones on a five to seven year basis.  Standards are valid 
for no longer than 15 years after the publication date ;  any standard older than 15 years is automatically 
withdrawn, with a view to ensuring that  standards represent current practice.   
54 Regulatory (mandatory) standards, by making compliance compulsory or optional (if the target is 
met through some alternative approach), tend to be more targeted, as they are aimed at, inter alia , protecting the 
health or safety of persons, or the environment. 
55 COAG (2004). 
56 According to Standards Australia, alignment with international standards is possible in a total of 
2,743 instances (i.e. an international standard covers the same subject as a national standard), of which, 
2,328 (85%) were adopted without modification, 338 (12%) were modified for adoption, and the remaining 77 (3%) have not been adopted because there is no need for a standard in Australia.   WT/TPR/S/178 Trade Policy Review 
Page 44 
 
 
Standards Australia as the country's t op non-government st andards writing body.57  In addition, 
government funding was provided to Standards Austra lia to facilitate various activities in the "public 
interest", including representing Australia in international standard-setting bodies.58  In 2006, the 
Productivity Commission reviewed the relationship be tween the Government and Standards Australia, 
and concluded that the standard-setting arrangements were working efficiently, albeit with scope for 
improvement.59  In particular, it suggested that the Gove rnment should work with Standards Australia 
to improve the effectiveness of Australia's particip ation in international standard-setting fora, by 
defining "national interest" more clearly.60 
41. In addition to Standards Australia, there ar e a number of other private standards-writing 
bodies in Australia, each operating in a specific sector.61  Some government agencies develop 
standards without the involvement of Standards Au stralia;  these include Food Standards Australia 
New Zealand (FSANZ), the Therapeutic Goods Ad ministration (TGA), and the Office of the Gene 
Technology Regulator (OGTR).  Others, such as the Australian Greenhouse Office and the ACCC, 
request Standards Australia to develop a standard a nd then reference it in regulation.  Alternatively, 
regulations developed by a number of government bodies could be used as standards.  For example, 
the Department of Transport and Regional Servi ces (DOTARS) develops and reviews the Australian 
Design Rules (ADRs), which are national safety and environmental standards for motor vehicles, to 
ensure their consistency with international sta ndards developed under the United Nations Economic 
Commission for Europe (UNECE) framework.62  In 2004, over 60% of vehi cle standards were aligned 
with the UNECE 1958 Agreement on technical sta ndards for automotives and parts regulations.63 
42. In respect of Commonwealth regulations , mandatory consumer product safety and 
information standards are enforced by the Au stralian Competition and Consumer Commission 
(ACCC).  Unsafe goods are banned.64  At the state and territory leve l, such regulations are enforced 
                                                      
57 An MOU was signed between Standards Australia and the Government in 1988, and in 1998.  The 
current MOU was signed in 2003 for a period of five years.  In 2003, Standards Australia sold some of its 
commercial operations to a publicly listed company, SAI-Global Ltd.  Since then, Standards Australia's 
functions have been concentrating on developing standards, and SAI-Global Ltd is in charge of publishing, distributing, and marketing Standards Australia's products.  In 2005, Standards Australia's holding in SAI 
Global was reduced to 9%.   
58 These include the International Organization for Standardization (ISO), the International 
Electrotechnical Commission (IEC), and th e Pacific Area Standards Congress.  Standards Australia is also a 
signatory to Annex 3 of the TBT Agreement.  Most Australian Government funding to Standards Australia and 
NATA is provided through the Support for Industry Service Organizations Programme, administered by the 
Department of Industry, Tourism and Resources. 
59 Productivity Commission (2006d).  Major recommendati ons to Standards Australia include ensuring, 
inter alia :  systemic consideration of the costs and benefits prior to any decision to develop or revise a standard;  
balanced stakeholder representation;  barriers to volunteer and public participation are addressed;  and improved 
accessibility, transparency and timelin ess, including an improved app eals and complaints mechanism.  
60 According to the PC, "public interest" covers matters relating to the whole Australian community, 
including impact on all members of the community;  and "national interest" covers Australia's interests at the 
international level.  
61 Of these, three bodies are accredited by Sta ndards Australia:  the Australian Communications 
Industry Forum, the Seafoods Services Australia, and the Australian Forestry Standard Ltd.  
62 DOTARS (2005).  Between 1 July 2002 and 30 June 2005, 33 ADRs were issued;  a further 35 were 
to be issued in 2005/06.  The authorities state that ADR s issued in 2005/06 were not new;  they were either 
revised or issued in the new format required under the Legislative Instruments Act 2003 so as to be registered in 
the Federal Register of Legislative Instruments. 
63 APEC (2004), p. 213. 
64 ACCC online information.  Vi ewed at:  http://www.accc.gov. au/content/index.phtml/itemId/ 
268701/fromItemId/6191 [4 April 2006].  Banned goods include:  candles containing lead, children's dart gun sets, "diveman" underwater breathing apparatus, gas masks containing asbestos, glucomannan in tablet form, Australia WT/TPR/S/178 
 Page 45 
 
 
by government departments or agencies with portf olio responsibility for cons umer affairs and fair 
trading.  
Accreditation 
43. Accreditation services are provided by NATA and JAS-ANZ.  NATA is a private-sector 
organization, and JAS-ANZ was established by the Australian and New Zealand Governments.  The 
Therapeutic Goods Administration, a Commonwealth  regulator, is in charge of assessing all 
therapeutic goods.  Another regulatory body, th e Australian Quarantine and Inspection Service 
(AQIS), provides inspection and certification services for food imports.  
44. NATA signed its current MOU with the Australia n Government in 2003.  Covering a period 
of five years, the MOU recognizes NATA as the na tional authority (except for most therapeutic 
goods) for accreditation of testing and calibration laboratories, suppliers of certified reference 
materials, and inspection bodies.  There are around 3,000 NATA-accredited laboratories and facilities.
65  Like Standards Australia, NATA receives  government funding, which is intended to 
facilitate activities in the "national interest", including representing Australia in international 
laboratory accreditation fora.66  In its 2006 review, the Productivity Commission concluded that 
NATA has been working effectively, but efficiency could be improved if the Government could make 
more efforts to achieve full mutual recognition of conformity assessment in multilateral and bilateral 
fora, and if NATA could facilitate a more competitive proficiency testing market by assuming a coordinating role and leaving most profic iency testing to accredited commercial bodies.
67   
45. The JAS-ANZ established in 1991 under a Treaty between the Australian and New Zealand 
Governments, is a non-profit organization accred iting certification bodies to certify management 
systems, products, and personnel.  It represents Au stralia in the International Accreditation Forum 
(IAF) and the Pacific Accreditation Cooperation (P AC).  Unlike Standards Australia and NATA, the 
JAS-ANZ no longer receives funding from either the Australian or the New Zealand Government;  its 
income is largely derived from the fees it charges.68  For certification purposes, JAS-ANZ usually 
accredits certification bodies to certify in line with  international standards, such as the ISO 9000, 
ISO 14000, and HACCP (Hazard Assessment Critical C ontrol Point) food safety standards.  In the 
absence of an international standard, JAS-ANZ may accredit certification bodies to certify in line with 
a national standard.  It may also accredit in line with other industry standards, such as QS-9000 for 
automotive parts and systems, or regulator y standards based on a case-by-case assessment.69  
International cooperation 
46. Recognizing that the alignment of domestic standa rds with international standards contributes 
to trade facilitation, Australia is a party to the WTO Agreement on Technical Barriers to Trade (TBT);  
between 2002 and 2006, it made 48 notifications under the Agreement.  It is also a party to the APEC 
MRAs on conformity assessment of telecommunications equipment, electrical and electronic 
                                                                                                                                                                     
jelly cups – konjac, "quickie" line release system, seat belt accessories, sun visors, tinted headlight covers, 
tobacco products (smokeless), victim toys, and no holes tongue studs and similar products. 
65 In 2006, Proficiency Testing Australia (PTA) was established as a wholly owned subsidiary of 
NATA to offer proficiency testing services.   
66 These include the International Laboratory Accreditation Cooperation (ILAC) committees and 
working groups, the Asia Pacific Laboratory Accreditation Cooperation (APLAC), the OECD Panel on Good Laboratory Practices, and various committees of ISO and IEO. 
67 Productivity Commission (2006d).   
 68 JAS-ANZ used to receive funds from both the Australian and New Zealand Governments. 
69 JAS-ANZ (2005). WT/TPR/S/178 Trade Policy Review 
Page 46 
 
 
equipment, and foods and food products.  Australia also participates in the International Harmonised 
Research Activities (IHRA) group, which deve lops testing procedures for road safety.70  Australia 
participates in the WHO International Food Safe ty Authorities Network for the exchange of 
information on food recalls.  
47. Furthermore, in the area of legal metrology,  Australia has bilateral mutual recognition 
agreements (MRAs) of type a pproval test reports with equiva lent bodies in the Netherlands, 
New Zealand, and the United Kingdom.71  MRAs on standards and conformity assessment were 
signed between Australia and the EC (1998), the EF TA (1999), Singapore (2001) , and Canada (2006).  
In addition to being a founding member of the International Laboratory Accreditation Cooperation 
(ILAC), NATA was one of the four inaugural sign atories to the extended Asia Pacific Laboratory 
Accreditation Cooperation (APLAC) MRA for inspection, signed in November 2003.72  Australia has 
an MOU on therapeutic goods with the U.S. FDA fo r exchange of information, and current good 
manufacturing practice (GMP) inspections of human pharmaceutical manufacturing facilities.73  I n  
2004, the Therapeutic Goods Administration (TGA) signed an MOU with Health Canada, covering 
information-sharing and facilitating collaborative activ ities related to therapeutic products for human 
use.  In 2006, the TGA signed an MOU with Swi ssmedic covering the develo pment of collaborative 
activities and the sharing of information relating to the regulation of medicines and medical devices.   
(b) Sanitary and phytosanitary regulations  
Overview 
48. Australia has a strict sanitary and phytosanitary  regime.  The authorities justify this by 
maintaining that Australia has unique and diverse fl ora and fauna, is a major exporter of agricultural 
products, and is relatively free from serious pests and diseases.74  Under quarantine policy, 
commodities may not be imported unless the quarantine risks are reduced to a level consistent with 
Australia's appropriate level of protection (ALOP), which is descri bed as "providing a high level of 
sanitary and phytosanitary protection aimed at reduc ing risk to a very low level, but not zero".75  
However, if the SPS regime is unduly strict, it may constitute an import restriction or prohibition.  
Some WTO Members have raised concerns about th e strictness of the Australian regime in the 
Committee on Sanitary and Phytosanitary Measures, covering, inter alia,  cosmetics, fresh fruits and 
vegetables, live fish, prawn and prawn produc ts, chicken meat, pigmeat, sauces, and cheese.76 
49. Insofar as quarantine restrictions are unduly stringent, they protect domestic producers but 
reduce consumer welfare through higher domestic pr ices of the product.  The welfare loss becomes 
more evident and may outweigh any producer gain s when natural disasters happen and domestic 
production falls.  For example, Australia has ma intained its ban on Philippines' bananas for SPS-
                                                      
70 APEC (2004), p. 217. 
71 APEC (2004), p. 220. 
72 APEC (2004), p. 220. 
73 APEC (2004), p. 219. 
74 DAFF estimated that if foot and mouth disease we re detected in Australia, the immediate loss of 
trade for wool, meat, dairy, and live exports would be ov er $A 10 billion (DAFF online information.  Viewed at:  
http://www.daff.gov.au/content/output.cfm?ObjectID=2C8B8DEE-8136-427E-9D81481389015227&contType =outputs  [7 April 2006]). 
75 DAFF (2003). 
76 Concerns have been raised by:  ASEAN (represented by its member countries), Bulgaria, Canada, 
Chile, Croatia, Czech Republic, Estonia,  the European Communities, India, In donesia, Japan, Latvia, Malaysia, 
New Zealand, the Philippines, Poland, Republic of Korea, Romania, Slovak Republic, Slovenia, Switzerland, 
Thailand, and the United States (WTO document G/SPS/GEN/204/Rev.6, G/SPS/ GEN/204/Rev.6/Add.1, 
G/SPS/GEN/204/Rev.6/Add.2, G/SPS/GEN/ 204/Rev.6/Add.3, 19 May 2006). Australia WT/TPR/S/178 
 Page 47 
 
 
related reasons, despite the drought in 2002/03 an d 2006, and the tropical cyclone in early 2006, 
although the latter devastated 80% of Australia's bana na crop and led to a sharp increase in the price 
of bananas.77   
General framework 
50. The Australian quarantine system is regulated  by Commonwealth, state and territory laws78;  
the legislation at the Commonwealth  level is the Quarantine Act 1908.79  Quarantine applies to all 
humans, plants, animals, and associated products, including food products.  Quarantine measures are applied at three levels:  pre-border, border, and po st-border.  At the pre-border level, Biosecurity 
Australia (BA) is in charge of developing recommendations for risk management measures and 
reviewing existing measures for items that may be  imported through an import risk analysis (IRA) 
approach or a policy review.
80  BA was created in December 2004 as a prescribed agency under the 
Financial Management and Accountability Act 1997,  with a view to improving independence in 
operations and ensuring financial autonomy (Chapter IV(2)(ii)).81   
51. BA provides advice to the Australian Quaran tine and Inspection Services (AQIS) under 
DAFF;  AQIS implements quarantine policies at the border.  AQIS's functions include issuing import 
permits, as well as providing export health certifi cation for agriculture and food exports, in 
consultation with industry consultative committees (ICCs).82  The Department of Health and Ageing 
(DoHA) performs risk assessments on all biological  materials that are of human quarantine concern 
and provides advice to AQIS before an import permit is issued.  Australia's quarantine operations are 
based on high levels of inspection at the border.   During 2004/05, 91% of incoming passengers at 
airports, 100% of arriving vessels, seaport passengers, sea cargo containers and mail, as well as 95% 
                                                      
77 The authorities maintain that decisions on imports and measures applied are science-based, and not 
more trade restrictive than required.  According to the authorities, the IRA process is independent of domestic 
market concerns (including prices), and the application of  Australia's Appropriate Level of Protection (ALOP) is 
applied consistently regardless of the impact of natural events on domestic production, e.g. drought and cyclone devastation of Queensland's banana crop in 2006.  Also , according to the authorities, the price increase in 
bananas was a temporary one. 
78 Inter- and intra-state barriers in the form of quarantine restrictions also exist within Australia.  Under 
the Constitution, the Commonwealth does not have exclusive power to make laws relating to quarantine;  thus 
Commonwealth and state laws on quarantine coexist.  However, the Constitution also states that, if a state law is 
inconsistent with a Commonwealth law, the Commonwealth law prevails, and the state law is invalid to the 
extent of the inconsistency.  An MoU on animal and plant quarantine matters was signed between the 
Commonwealth and states governments in 1995.  The authorities state that Australia has many pest- and 
disease-free zones, which are maintain ed through second-tier domestic quaran tine measures affecting inter-state 
and local movement of products.  
79 Other major legislation includes the Quarantine Regulations 2000, as well as three Quarantine 
Proclamations, which are the Quarantine Proclamation 1998, the Quarantine (Cocos Island) Proclamation 2004, and the Quarantine (C hristmas Island) Proclamation 2004.   
80 An IRA would be conducted on, for example, new commodities that have not previously been 
imported into Australia, or commodities that have been imported before but the import request is from a 
different country/area with a significantly different pest  and disease status (DAFF online information.  Viewed 
at:  http://www.daff.gov.au/content/output.cfm?ObjectID=D2C48F86-BA1A-11A1-A2200060B0A03921  
[7 April 2006]). 
81 BA may seek advice from other agencies such as the DoHA and the Department of Environment and 
Heritage, when undertaking an IRA. 
82 These ICCs include the Imported Food Cons ultative Committee (IFCC), Dairy Export Industry 
Consultative Committee, Quarantine and Exports Adviso ry Council (QEAC) (DAFF online information.  
Viewed at:  http://www.affa.gov.au/content/outpu t.cfm?ObjectID=D2C48F 86-BA1A-11A1-A2200060A1 
B00057&contType=outputs [25 July 2006]).  The QEAC, an independent advisory council, provides advice to the Minister for Agriculture, Fisheries and Forestry, on major quarantine and expo rt certification issues. WT/TPR/S/178 Trade Policy Review 
Page 48 
 
 
of imported air cargo, underwent quarantine inspection.  According to the authorities, this helps to 
minimize the risk of introducing exotic pests a nd diseases that could be harmful to Australia's 
agriculture, human health, and the environment.83 
52. The Product Integrity, Animal and Plant Health (PIAPH) division of DAFF works with state 
and territory government agencies on post-border matter s to facilitate a coordinated national approach 
to pest and disease management within Australia;  this is also facilitated by the Primary Industries 
Ministerial Council and associated committees.   
Recent policy changes 
53. Until 2003 there had been routine IRAs, for less co mplex issues or issues not likely to involve 
the analysis of new and significant risks;  and non-routine IRAs, for issues involving new or complex 
risks.  In August 2003, a revised IRA Handbook in troduced a single IRA process (containing many of 
the features of the non-routine pr ocess), with a view to improving stakeholders' involvement in the 
import risk analyses.84  Further changes were announced in  October 2006, to make IRAs more 
transparent, efficient, timely, and predictable.  Unde r the new process, which is to begin in early 2007, 
a standard IRA will be completed within 24 mont hs, and an expanded IRA (if there are significant 
differences in scientific opinion or significant bio security risk) within 30 months, of an announced 
commencement date of the process.85 
54. Nevertheless, there has been growing internal debate on the quarantine process:  for example, 
based on an IRA report, the Australian Government  granted a permit to import uncooked pig meat 
from the United States in July 2004.  The IRA repo rt assessed the quarantine risk in relation to a 
number of diseases found in pigs, including th e post-weaning multisystemic wasting syndrome 
(PMWS).  This triggered a law suit against the Government by the domestic industry, represented 
mainly by the Australian Pork Limited (APL), as  well as Windridge Farms.  The challenge was 
successful in the first instance, but the decision was overturned on appeal.  The application by APL to 
appeal to the High Court was rejected in November  2005, bringing an end to APL’s legal challenge.86  
The case provides an important precedent for any futu re challenges to quarantine import decisions.   
55. All food imports must comply with the Aust ralia–New Zealand Food Standards Code, which 
was developed by Food Standards Australia Ne w Zealand (FSANZ) and came into effect in 
December 2002.  Under the Code, FSANZ develops general food standards, food product standards, 
food safety standards, and primary production standards.87  New standards are required to be 
consistent with the principles and appro aches of the Codex Alimentarius Commission.88  AQIS and 
                                                      
83 DAFF (2005a), p.71. 
84 ANAO (2005), p.34.  According to the revised Import Risk Analysis Handbook, the IRA process 
conforms to Australia's internationa l obligations, such as the WTO SPS Agr eement, and international standards 
established under the World Organisation for Animal Health (OIE) and the International Plant Protection Convention (IPPC).   
85 Under the new process, IRAs are to be expanded to  include analyses currently  undertaken as "policy 
reviews" (some analyses where releva nt import policy exists).  Processe s for receiving and prioritizing import 
requests will be improved and clarified.  A high-level group will be established to prioritize import proposals 
and monitor their progress.  The criteria used to allocat e priority to IRAs and Australia's IRA work programme 
will be made public.  The process of reviewing IRAs by  the Eminent Scientists Group will be strengthened.   
86 DAFF online information.  Viewed at:  http ://www.daff.gov.au/conten t/output.cfm?ObjectID= 
22DD9ED3-43E8-4D6C-A55FD79C8D7FF026 [6 September 2006]. 
87 FSANZ online information, "Australia and New Zealand Food Standards Code".  Viewed at:  
http://www.foodstandards.gov.au/thecode  [4 April 2006].  The Code conforms with obligations under the 
Agreement on Mutual Accepta nce of Oenological Practi ces (MAA) (APEC, 2004).  
88 APEC (2004), p. 212. Australia WT/TPR/S/178 
 Page 49 
 
 
FSANZ jointly run an imported food inspection scheme;  FSANZ develops food risk assessment 
policy and AQIS is responsible for inspection.89  FSANZ also coordinates food supply monitoring and 
food standards enforcement, and all Australian food recalls.  For example, imported foods using 
biotechnology can be sold in Australia only after being assessed and approved by FSANZ.90  Based 
on FSANZ's analysis, imports into Australia of some long-prohibited produc ts have been permitted 
since 2002.  For example, imports of French cheese  (Roquefort) started in 2005;  in addition, three 
raw milk cheeses (Swiss Gruyere, Sbrinz, and Emmental), and "raw milk very hard cheeses" (specified as having a moisture content of less th an 36% and stored for a minimum of six months) 
were already permitted. 
56. The Food Standards Code also regulates food derived from GM plants, animals or micro 
organisms, as well as the labelling of GM foods.
91  The Australian Govern ment’s Gene Technology 
Regulator is in charge of regulating gene technol ogy in Australia, and is supported by the Office of 
the Gene Technology Regulator (OGTR).  The OGTR, a statutory agency and part of the Therapeutic 
Goods Administration (TGA), is located in the De partment of Health and Ageing.  The Gene 
Technology Regulator administers the Gene Technol ogy Act 2000, which is aimed at protecting the 
health and safety of people, and the environment, by identifying and managing risks posed by or as a 
result of gene technology.  The DoHA provides i ndependent human health risk assessments when a 
genetically modified orga nism is imported.   
Participation in international activities 
57. Between 2002 and 2006, Australia submitted 100 notifications to the WTO relating to Article 
7 and Annex B of the SPS Agreement.  Draft IRA reports, as well as outcomes of the IRA process are 
also notified to the WTO.  Australia is also active in the three standard-setting organizations under the 
SPS Agreement:  FAO/WHO Codex Alimentarius Commission, World Organisation for Animal Health,  and International Plant Pr otection Convention.  Notably, Aust ralia hosts and ch airs the Codex 
Committee for Food Import and Export Inspection and Certification Systems. 
58. Australia assists developing countries, particul arly those in the APEC, to build quarantine 
infrastructure and risk analysis capacity, and to im prove awareness of international standards on SPS 
issues in general.
92  It has provided detailed information rega rding its technical assistance activities to 
the WTO SPS Committee.93 
                                                      
89 DAFF online information.  Viewed at:  http ://www.daff.gov.au/conten t/output.cfm?ObjectID= 
637FF0C5-C305-43BD-9216486B57110266 [6 April 06]. 
90 FSANZ has completed safety assessments of 30 food products using gene technology.   
91 There are certain exemptions to the labelling requirem ents for GM foods:  foods that do not need to 
be labelled as "genetically modified" include those highly refined that contain no DNA or protein, such as oil 
made from GM soy beans, and those in which GM ingr edients are present accidentally and make up less than 
1% of the final food (FSANZ, 2005). 
92 For example, Australia provides quality assurance for animal health laboratories in Indonesia and 
Thailand, and assistance in animal health-related activities in Papua New Guinea, East Timor, and Indonesian 
Papua and Flores.  Australia provides funds and assistance for audits and a ssessments of plant disease herbaria 
and arthropod pest collections in Brunei Darussalam, In donesia, Malaysia, the Philippines, Singapore, Thailand, 
Viet Nam, and some other APEC region countries, to improve infrastructure required to support quarantine-
related market opening and maintenance capacity.  FSANZ works with China to develop capacity-building 
activities, including training programmes, to help Chin a fulfil its obligations under the WTO SPS Agreement. 
93 WTO document G/SPS/GEN/717, 4 August 2006.  WT/TPR/S/178 Trade Policy Review 
Page 50 
 
 
(c) Labelling 
59. FSANZ is the regulatory authority that deve lops, implements, and reviews food labelling 
requirements, for food sold, prepared for sale in , or imported into Australia and New Zealand. 
60. Mandatory product information standards, in cluding care labelling for clothing and textile 
products, and for a range of other consumer produc ts including sunglasses, cosmetics and toiletries, 
and tobacco products, remain in force. 
(viii) Government procurement 
61. The core principle of Australia's procurement framework is value for money, which requires a 
comparative analysis of all relevant costs and benefits of each proposal throughout the whole 
procurement procedure.  Other principles include competition, non-discrimination, accountability, and 
transparency, as well as conducting procurement and us ing resources in an efficient, effective, and 
ethical manner.  Australia still has an indus try development initiative for the procurement 
arrangements for motor vehicles, which is ex empted from mandatory procurement procedures 
specified under the Commonwealth Procurement Guidelines (see below). 
62. Australia has observer status in the WTO Committee on Government Procurement, and 
currently has no intention of becoming a party to th e GPA.  However, it participates in the Working 
Group on Transparency in Government Procurem ent, and has submitted proposals on methods of 
procurement.94  Each of Australia's three levels of go vernment (Commonwealth, state and territory, 
and local) has its own procurement framework a nd policies.  At the Commonwealth level, the 
government procurement policy framework has three key elements:  the Commonwealth Procurement 
Guidelines (CPGs), which form the basis of Commonw ealth procurement policy and are issued by the 
Finance Minister95;  finance circulars, which provide a dvice on key changes and developments of 
procurement policy and are issued by the Departme nt of Finance and Administration (Department of 
Finance);  and guidance documents developed by th e Department of Finance to assist agencies to 
implement the Government's procurement policy.96 
63. In 2004/05, the Commonwealth of Australia signed 153,512 contracts with a total value of 
$A 23.5 billion.  Between 2001/02 and 2003/04, the share of SMEs in the number of contracts fell 
from 61.3% to 52%;  however, in terms of the valu e of contracts, their share increased from 25.1% to 
26.8%.97  The Department of Finance is currently reviewing the methodology used for identifying 
SMEs. 
(a) Mandatory procurement procedures 
64. Under the Financial Manageme nt and Accountability Act 1997  (FMA 1997) and relevant 
regulations, each government agency is in charge of  its own procurement.  The Government considers 
                                                      
94 WTO document WT/WGTGP/W/31, 15 May 2002. 
95 The most recent CPGs were issued by the Finance Minister in December 2004.  Department of 
Finance online information. Viewed at:  http://www .finance.gov.au/ctc/docs/CPGs_-_January_2005.pdf 
[11 April 2006].   
96 Other government procurement related policies include:  the Occupational Health and Safety 
(Commonwealth Employment) Act 1991, which requires that health and safety issues be considered prior to and 
during any procurement;  a statutory requirement for ag encies to submit all constr uction projects valued at 
$A 15 million or more to the Public Works Committee for consideration.   
97 Department of Finance online information.  Viewed at:  http://www.finance.gov.au/procurement/ 
contract_statistics.html [26 July 2006].   Australia WT/TPR/S/178 
 Page 51 
 
 
that no single procurement method suits  all situations;  hence, the CPGs  allow considerable flexibility.  
When conducting procurement above certain thresholds, all agencies are required to follow mandatory 
procurement procedures.98  These provide for open tendering, select  tendering, and direct sourcing;  
specific rules decide which method can be applied.   Open tendering involves publishing a request for 
tender, and accepting submissions from any poten tial suppliers who satisfy conditions for 
participation.99  Under the select tender process an invitati on to tender is issued to selected potential 
suppliers, such as suppliers granted a licence.  This method may be used  where the agency has 
identified all (potentially) interested eligible s uppliers, through an open approach, or where suppliers 
have been granted a specific licence or comply with a legal requirement, and the licence or 
compliance is essential to the conduct of procurement.  In the latter case, all registered and/or licensed 
suppliers must be invited to tender.  Direct s ourcing is conducted when no submission was received, 
or no submission or potential supplier satisfies conditions  of the tender.  It may also be conducted in 
extremely urgent situations, or ex ceptionally advantageous conditions.100   
65. AusTender provides a single portal to adverti se business opportunities and to report the award 
of government procurement contracts.  Agencies ar e required to publish contracts or standing offers 
with a value of $A 10,000 or more on AusTender.  Interestingly, no data were available from the 
authorities concerning the breakdown of contracts (numbers of contracts and their values) under 
various procurement methods, which indicates a rare  departure from Australia's high level of  
transparency.  The authorities state that, Aust ralia's government procurement framework is 
transparent, and interested parties can  obtain the information if they wish. 
66. According to the authorities, the Australian Gove rnment has a target of sourcing at least 10% 
of purchases by value from SMEs.101  In particular, for major procurement of information and 
communication technology (ICT) products and services with an expected contract value of $A 20 million or more, government agencies must ensure that tenders meet the following minimum SME participation levels:  10% of contract valu e for hardware, and 20% of contract value for 
software/services.   
67. The industry development requirement was removed from the Endorsed Supplier 
Arrangement (ESA) as from 1 January 2005.  The ES A is a mandatory pre-qualification scheme, and 
supports select tendering.  Prior to participating in any government procurement, suppliers of 
information technology products, major office machines, commercial office furniture, and 
auctioneering services must obtain endorsement under the ESA.
102  In particular, until 2005, in major 
                                                      
98 These are $A 80,000 for procurement by FMA agencies (government entities), other than 
construction services;  $A 400,000 for procurements by relevant CAC Act bodies (government enterprises), 
other than construction services;  and $A 6 million for procurement of construction services.  Procurement of, inter alia , real estate property or accommodation, R&D services, and motor vehicles, are exempt from 
mandatory procurement procedures. (Exemptions are listed in the Commonwealth Procurement Guidelines 
issued by the Finance Minister in January 2005, Appendix B.) 
99 Conditions for participation may include a requirement to undert ake an accreditation or validation 
procedure. 
100 CPGs Articles 8.62-66.  Examples of "extremely urgent situations" include natural disasters.  
Examples of "exceptionally advantageous conditions" occur only in the very short term and include unusual 
disposals, liquidation, and insolvency.  
101 An SME is a domestic or New Zealand firm with fewer than 200 full time employees.   
102 The ESA's conditions include:  financial viability;  insurance coverage;  a successful track record for 
delivery (favourable referee reports);  product and serv ice compliance with the agre ed industry standards and 
certain Australian Government policies;  adherence to the endorsement rules;  an d a Head Agreement (for 
suppliers of IT and major offi ce machines only) (Department of  Finance online information.  
Viewed at:  http://www.fin ance.gov.au/online/esa/about_esa.html# WhatistheEndorsedSupplierArrangement 
[21 April 2006]). WT/TPR/S/178 Trade Policy Review 
Page 52 
 
 
procurement projects of $A 5 million or more , agencies had to identify clearly in tender 
documentation any industry development criteria;  accord ing to the authorities, this was discontinued.   
68. Complaints regarding the procedure or purch ase decisions may be made to the relevant 
agency, or the Commonwealth Ombudsman, who is empowered to investigate procurement decisions 
and processes.  Procurement decisions by agenci es are also subject to judicial review.  
(b) Preferences 
69. Australia's bilateral free-trade agreements  with New Zealand, Singapore, and the 
United States all include specific government procurement commitments.103  The Australia and 
New Zealand Government Procur ement Agreement (ANZGPA), wh ich includes the Commonwealth 
and state and territory governments, is undergoing its five-year review.104  Local preferences have 
been eliminated, and member govern ments are committed to the increased consistency in procurement 
policies, practices, and procedures.   
70. The AUSFTA changed several aspects of Au stralia's government procurement policy 
framework.  For example, the agreement increased thresholds for procurement to follow mandatory 
procedures:  for procurement of goods and ser vices, a threshold of $A 87,000 applies for 
Commonwealth government entities, $A 705,000 for state government entities, and $A 434,000 for 
government enterprises;  the threshold for procuremen t of construction services is $A 9,933,000.  The 
threshold is to be adjusted at two-y ear intervals, beginning on 1 January 2006.105  The AUSFTA also 
specifies three procurement methods:  open tendering is presumed to be the first choice;  selective or 
limited tendering are allowed only in specific conditi ons.  According to the authorities, changes made 
to the procurement framework under the AUSFTA  have been extended to all countries. 
(ix) Local-content requirements 
71. Local-content requirements remain in govern ment procurement arrangements for motor 
vehicles (Chapter IV(4)(ii))106, in export finance, guarantees, and insurance provided by the Export 
Finance and Insurance Corporation (EFIC) (sec tion (3)(iv)(e)), and in foreign investment 
requirements in the broadcasting services sector.107  In June 2006, local-content requirements under 
the Export Market Development Grants (EMDG)  scheme were removed (section (3)(iv)(a)).  
72. During the period under review, Australia has not made any notifications of TRIMs under the 
WTO Agreement on Trade-Related Investment Measu res, thereby indicating the absence of such 
measures. 
                                                      
103 Under the Thailand–Australia Fr ee Trade Agreement (TAFTA), a wo rking group was established to 
discuss issues related to government procurement (DFAT online information.  Viewed at:  http://www.dfat.gov.au/trade/ne gotiations/aust-thai/tafta_chapter_15.html [26 July 2006]).  Non-discriminatory 
national treatment is guaranteed under both SAFTA and AUSFTA;  however, SAFTA includes exemptions 
relating to industry development, and not all U.S. stat es signed the government procurement chapter in the 
AUSFTA. 
104 APEC (2004). 
105 AUSFTA, Chapter 15, Annex 15-A. 
106 Procurement of motor vehicles is exempted from mandatory procurement procedures.  Under the 
Australian Government's fleet arrangements, government procured motor vehicles must be either made in 
Australia by manufacturers that have a local operation in vehicle assembly or component production, or 
imported passenger motor vehicles marketed by an Australian-based manufacturer. 
107 In the broadcasting services sector, 55% local cont ent is required in free-to-air television, 80% in 
television advertising, and 10% expenditure on Australian drama is required for pay-television channels. Australia WT/TPR/S/178 
 Page 53 
 
 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Registration and documentation 
73. All goods intended for export must be registered  with the Australian Customs Service unless 
otherwise exempted.108  On 22 September 2004, the integrated cargo system (ICS) replaced the export 
integration system (EXIT).109 
74. Customs may undertake compliance examinati ons on behalf of permit-issuing agencies110, for 
various reasons, including:  verification of the go ods against entry details;  inspection of trade 
descriptions;  detection of prohibite d exports;  and prevention of any non-payment of duties or GST.  
As for importers, exporters must ke ep all relevant commercial documents  for a period of five years.   
(ii) Export prohibitions, restrictions, and licensing 
75. Exports of acetic anhydride to Afghanistan are prohibited, as are exports of certain cultural 
and heritage goods, and suicide devices.  Exports  of some other goods are restricted, unless 
permission or a licence is granted.111  Discretionary export licensing r estrictions are maintained for 
reasons related to SPS, the environment, a nd alignment with inte rnational agreements.112  Quota 
arrangements remain on cheddar cheese exports to the EC and varietal cheeses to the United States, 
due to restrictions imposed by trading partners.  Export quotas maintained on merino sheep, set limits 
                                                      
108 Exempted goods include:  personal or household effects (including motor vehicles and pets) of 
passengers or crew members;  a consignment by post, ship or aircraft from one person to another that has an f.o.b. value not exceeding $A 2,000, except those requiring permits;  du tiable (imported) good s on which duty is 
unpaid, excisable goods on which excise duty is unpaid, and/or goods for which a person intends to claim a 
drawback of customs duty or excise duty;  containers, whether loaded or unloaded, that are the property of 
persons doing business in Australia and that are to be temporarily exported prior to re-import;  and certain ship 
or aircraft stores (except underbond stores) (Customs, 2002).  
109 Customs (2005a).  For a period of two weeks from 22 September 2004, ICS and EXIT operated in 
parallel.  On 6 October 2004, EXIT was discontinued and all exports started to go through the ICS. 
110 Customs (2005a). 
 111 These include asbestos;  biological agents;  cat and dog fur products;  cetacearns (whales, dolphins, 
and porpoises);  chemical compounds;  counterfeit credit cards;  some cultural and heritage goods;  defence and 
strategic goods;  diamonds (Kimberley process);  drugs;  endangered animal and plant species (subject to the 
CITES);  firearms, parts, accessories , and ammunition;  hazardous waste;  human blood and ot her body fluids, 
organs and tissue;  human embryos;  ozone depleting substances;  pornography and other objectionable material;  
precursor substances listed in relevant regulations (as these can be converted to other substances that may affect 
public health);  prescription medicines;  over-the-counter medicines and complementary medicines, unless exempt;  radioactive substances;  radioactive waste;  toothfish;  wine and brandy (bulk consignments of wine, 
brandy, grape spirit, and wine-derived products over 1 00 litres);  as well as exports to Afghanistan, Liberia, 
Rwanda, and Sierra Leone (Customs online information.  Viewed at:  http://www.customs.gov.au/site/ 
page.cfm?u=4381 [3 May 2006]). 
112 For example, the Department of Environment and Heritage grants licences for exports of hazardous 
waste and ozone-depleting substances;  AQIS grants export licences for meat, dairy products, eggs, animals, 
fish, grain, vegetables, and fruit;  and the Therapeutic Goods Administration under the Department of Health 
and Aging grants export licences for certain drugs and go ods containing those drugs, as well as certain animal 
and human products (Customs, 2005a).  In addition, the Australian Wine and Brandy Corporation issues export 
licences for wine and brandy, and Horticulture Australia Ltd grants export licences for horticultural products 
(currently applicable to citrus, dried grapes, apple, p ear, and stone fruit exports);  export licensing for stone fruit 
was terminated in 2005.   WT/TPR/S/178 Trade Policy Review 
Page 54 
 
 
at no more than 800 rams, with an additional 100 st ud rams placed on an export donor register (for 
trade in genetic material).113   
(iii) State trading 
76. Australia's most recent notification to the WTO on state-trading enterprises (STEs) was in 
June 2006.114  These STEs manage exports of bulk wheat, and in some states, bulk barley, lupines, 
canola, and rice (Table III.5).115  There have been several changes to  the structure of STEs since 2002:  
in November 2002, following a National Competiti on Policy review, the former Grain Pool of 
Western Australia became a wholly owned subsidia ry (Grain Pool Pty Ltd) of the grower-owned 
Cooperative Bulk Handling Ltd.  The Australian Dair y Corporation was privatized and became Dairy 
Australia in July 2003 (thus no longer meeting the WTO definition of an STE).  Under the New South 
Wales Grain Marketing Act 2001, the New South Wales Grains Board ceased trading, with state-trading arrangements terminated as of 1 October 2005.  Under the Queensland Sugar Industry 
Amendment Act 2005, as of 1 January 2006, Queen sland Sugar Limited (QSL) is no longer the 
exclusive exporter of Queensland's raw sugar.  
Table III.5  
State-trading enterprises for exports (Commonwealth, or states), 2006 
Enterprise Activity Degree of state ownership  
AWB (International) Ltd Single-desk  arrangements, sole exporter of 
bulk wheat Wholly owned subsidiary of the majority grower-
owned and controlled company, AWB Ltd 
Grain Pool Pty Ltda Holds the main export licence to export bulk 
barley, lupins, and canola from Western 
Australia Wholly owned subsidiary of the grower-owned 
Cooperative Bulk Handling Ltd 
ABB Grain Export Ltda Single-desk arrangements, sole exporter of 
bulk barley grown in South Australia  Wholly owned subsidiary of the publicly listed, 
majority grower-owned and controlled ABB 
Grain Ltd  
New South Wales Rice Marketing 
Boarda Single-desk arrangements, sole exporter of 
rice grown in New South Wales State statutory authority 
a Governmental or non-governmental entity that has been grante d exclusive rights or privileges (Article XVII:4(a) of GATT and 
paragraph 1 of the Understanding on the Interpretati on of Article XVII);  entity notified to the WTO. 
Source: WTO document G/STR/N/11/AUS, 28 June 2006.  
(iv) Export assistance 
77. Australia's schemes to promote exports incl uding mainly the Export Market Development 
Grants (EMDG) scheme, duty concession programme s such as TRADEX, the du ty drawback scheme, 
CIM and MiB, as well as export finance, guarantee, and insurance operated by the Export Finance and 
Insurance Corporation (EFIC).  The lack of cost-ben efit analysis of some schemes makes it difficult to 
know whether the assistance has brought net social benefit.   
                                                      
113 According to the authorities, the Australian wool industry has made substantial investment in 
improving the quality of merino wool over the years and this is a crucial element in the competitiveness of the 
industry (WTO, 1998).  The Australia's 2004 APEC IAP stated that, the livestock industry has indicated in 
recent consultations that it does not support any change to thes e restrictions (APEC, 2004). 
114 WTO document G/STR/N/11/AUS, 28 June 2006. 
115 The AWB Ltd does not have single-desk arrangements to export wheat in containers or bags.  Other 
STEs are licensed or have export arrangement in certain states.  Australia WT/TPR/S/178 
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(a) The Export Market Developmen t Grants (EMDG) scheme 
78. The EMDG scheme is administered by Austra de and aims to promote exports by SMEs.116  In 
2004/05, the scheme distributed grants worth $A 123 .9 million to 3,277 exporters, among which 77% 
were small business with annual incomes of $A 5 mi llion or less.  Under the scheme, the Government 
reimburses up to 50% of specified export promoti on expenditures above a threshold of $A 15,000.  
The criteria to obtain grants include:  having an annual income of not more than $A 30 million;  
spending at least $A 15,000 on eligible export pr omotion during the financial year before the 
application;  and being the owner of the product or  service being promoted (some exceptions apply).  
A local-content requirement was removed in J une 2006 as a result of a review (see below).117  The 
EMDG also applies to services, and intellectual prope rty or know-how that resulted mainly from work 
in Australia, but excludes legal, migration, and real estate purchasing services.  
79. Several changes were made in 2003 to furt her focus the scheme on smaller and emerging 
exporters.  For example, the maximum grant was reduced from $A 200,000 to $A 150,000, and the annual income ceiling for eligible exporters re duced from $A 50 million to $A 30 million.  
Furthermore, the total number of grants available for an exporter was reduced from eight to seven and 
no extra grants are available for new markets.   
80. In 2005, Austrade reviewed the EMDG scheme,  and found the scheme particularly effective 
for smaller sized firms and less experienced exporters.
118  As part of the review, the Centre for 
International Economics (CIE) carried out a survey of the EMDG scheme in 2005, which found that the scheme had a moderate influence on export pr omotion on average.  However, the research 
suggested that the scheme had a greater positive impa ct on smaller firms with capital constraints, and 
boosted exports and improved the su stainability of SMEs.  While the CIE report concluded that 
"taking account of inducement rates and spillover rat es, the evidence presented in this report suggests 
it is difficult to be categorical about the net social benefit of the scheme"
119, the Government 
considered the research suggested a positive net economic benefit, and d ecided to continue the 
scheme until the end of 2010/11 with certain changes.120  These changes include the removal of the 
local-content requirement in June 2006, as a result of which eligible goods include those considered 
"made in Australia" if they are Australian pr imary products, goods made primarily from such 
products, and goods that are substantially transformed in Australia.  Goods that are not taken to be 
"made in Australia" must meet requirements set out in the EMDG (Significant Net Benefit) Guidelines 2006.   
                                                     
 
116 Austrade online news on 24 January 2006.  Vi ewed at:  http://www.aus trade.gov.au/corporate/ 
layout/0,,0_S1-1_CORPXID0054-2_-3_PWB110745194-4_-5_-6_-7_,00.html [4 May 2006]. 
117 Previously, for a firm to obtain grants under the EMDG scheme, the goods it intended to export 
needed to be made in Australia with at least 50% Australian content;  or, if the goods were made outside Australia, at least 75% of the value of the components used in the making of the goods had to be attributable to 
goods that met the 50% Australian content rule.  Goods that did not meet these requirements could also be 
eligible if Austrade determined that the Australian input in those goods was sufficient to ensure that Australia 
derived a significant net benefit from their export.  
118 Austrade (2005). 
119 CIE (2005). 
120 House of Representatives, Export Market Devel opment Grants Legislation Amendment Bill 2006, 
Explanatory Memorandum.  "The CIE research was not de finite about the efficiency  of the EMDG scheme in 
inducing economy-wide benefits in excess of econom y-wide costs.  Nevertheless, with positive export 
inducement rates – found to be characteristic of firms facing funding constraints and typical of many of the 
small owner-entrepreneurial businesses that character ize EMDG recipients – the CIE research suggests a 
positive net economic benefit, even with low spillovers  of benefits from EMDG recipients to non-EMDG 
recipients". WT/TPR/S/178 Trade Policy Review 
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(b) Trade and Export Concession Scheme (TRADEX) 
81. The Tradex scheme, which started on 24 June 2000, provides duty and GST exemptions for 
imported goods intended for direct export or used, lo st, or wasted in the processing of other exports.  
The Department of Industry, Tourism and Res ources (DITR) has statutory responsibility for the 
scheme under the Tradex Scheme Act 1999, and AusIndustry is in charge of its general 
administration.   
82. Tradex replaced the Tariff Export Concession (TEXCO) scheme and, partially, the duty 
drawback scheme.121  Compared with the TEXCO and the duty drawback schemes, which require 
importers of goods destined for export to pay duty a nd other taxes at the time of import, Tradex has 
cash flow advantages, as duty and GST are exempted at the time of import.  To obtain a Tradex order, 
the goods intended for import must be exported, or incorporated into or used in manufacturing goods 
for export; export must take place within one year of import, or within a longer period approved by 
AusIndustry.  AusIndustry assesses and approves a Trad ex application within 30 days.  Total duty 
forgone under Tradex fell from $A 138.7 million in 2 002/03 to $A 93.8 million in 2004/05, due partly 
to Australia’s regional trade agreements (Table III.3).   
(c) Duty drawback scheme 
83. Under the duty drawback scheme, exporters ca n obtain a refund of duties paid on imported 
goods if these goods were treated, processed, or incor porated into other goods for export, or are 
exported unused after import.  Duty drawback is  available on most goods, with the exception of:  
exported goods that are to be returned to Austra lia;  goods used in Aust ralia other than for the 
purposes of exhibition, processing, or further manufac turing;  or where exported goods are valued at 
less than 25% of their imported value.122 
(d) Other schemes 
84. The Certain Inputs to Manufacture (CIM) scheme is aimed at reducing input costs by 
providing duty-free entry for certain goods used in manufacturing directed towards "import replacement" and export enhancement.  The author ities state that, "import replacement" here means 
certain eligible goods can be imported duty-free,  if their use as inputs has a substantial and 
demonstrable performance advantage over substituta ble domestic produced goods.  Goods eligible 
under the CIM are raw materials and intermediate  chemicals, plastic a nd paper goods, and metal 
minerals.
123   
85. The manufacture-in-bond scheme (MiB) remains, but  has not been widely used.  A firm may 
apply to the Department of Industry, Tourism, a nd Resources (DITR) for approval to import dutiable 
goods into a licensed warehouse free of duty and GST.   If these goods are subsequently exported, no 
duty or GST needs to be paid;  if sold do mestically, duty and GST is to be paid.  
86. Following assent for the Trade Development Zone  Act Repeal Bill, the Trade Development 
Zone Authority (TDZA) ceased trading on 30 June  2003.  At the same time, the Darwin Trade 
Development Zone also ceased to function as Australia's only free-trade zone.   
                                                      
121 If importers are not sure whether the imported goods would be finally exported, they use the duty 
drawback scheme, i.e. they pay the duties first an d get them refunded once the goods are exported.  
122 Customs online information.  Viewed at:  h ttp://www.customs.gov.au/web data/resources/files/ 
FS_Export_concessions_duty_drawback_scheme1.pdf [11 September 2006]. 
123 These goods are specified in Items 57 and 60 of Schedule 4 of the Tariff Act. Australia WT/TPR/S/178 
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(e) Export finance, guarantees, and insurance  
87. The Export Finance and Insurance Corporation (EFIC), Australia's official export credit 
agency, has been functioning within various stat utory frameworks since 1957.  The EFIC became a 
statutory corporation, wholly owned by the Comm onwealth Government, in November 1991.  Its core 
business is to provide various finance, insura nce, and guarantee facilities to support Australian 
companies exporting or investing overseas.  The EFIC is  instructed by the Government to operate on a 
self-sustaining basis, but not in competition with th e commercial market;  instead, it works where the 
commercial market is unable or unwilling to provide support to Australian companies.  For example, 
the EFIC provides medium-term but not short-term cred it insurance, as it considers the latter to be 
adequately provided by commercial insurers.  In addition, the EFIC's contract value depends on the 
degree of local content:  products with local content of 60% or more may receive assistance for up to 
85% of the export contract value;  for products with local content of less than 50%, the level of 
finance would normally be limited to the value of Au stralian content;  and for those with local content 
between 50% and 60%, the level of fina nce is considered on a case-by-case basis.124 
88. Support provided by the EFIC includes:  medium- to long-term finance or guarantee facilities 
(generally for more than two years) to the buyers  or financiers of Australian exports (usually for 
export of capital goods and services);  medium- to  long-term political risk insurance (PRI) for 
overseas investment;  and short-term guarantees  to financiers of Australian SME exporters.125  The 
EFIC provides such assistance through a commerc ial account, and a "national interest account".126  
Through the latter the Minister for Trade direct s or approves the EFIC's entry into transactions 
considered to be in the "national interest".127  In general, the EFIC operates on a commercial basis, 
charging its clients fees and premiums and earning in terest on its loans and its capital investment and 
reserves.  However, the Government is responsible for the financial conseque nces of national interest 
transactions, where the EFIC remits the revenues to  the Government and th e Government reimburses 
the EFIC for the cost and any losses arising from the transaction.  The EFIC's obligations to 
third parties are guaranteed by the Government;  a lthough this guarantee has never been used, it is 
potentially an additional elemen t of assistance for exporters. 
(v) Measures maintained by importing countries 
89. Since 2002, there have been five anti-dumping c ases against Australian exports, mainly in the 
iron and steel sector (Table AIII.1). 
90. Other measures maintained by certain importi ng countries that affect Australia's exports 
include:  agricultural market access measures (tariff a nd tariff quota restrictions), tariff peaks in the 
non-agricultural market sector (particularly on passenger motor vehicles and seafood), services market access restrictions, SPS and/or standards, im port licensing, and customs clearance procedures.  
                                                     
 
124 EFIC online information.  Viewed at:  http://www.efic.gov.au/templates/efi/page/page_html_ 
standard.php?secID=82 [16 May 2006]. 
125 In September 2003, EFIC's short-term export cred it insurance business was sold to a private credit 
insurer, Atradius Credit Insurance (incorporated in the Netherlands). 
126 Since the previous Review, exports supporte d by the EFIC through its Commercial Account 
increased from $A 6.7 billion in 2001, to $A 7.1 billion in 2003, then fell to $A 2.2 billion in 2004 and 
$A 342 million in 2005 (EFIC, 2005). 
127 National interest transactions usually occur where the transaction size or risk exceeds the EFIC's 
commercial parameters, and where the Minister for Trade considers them to be in the national interest. WT/TPR/S/178 Trade Policy Review 
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(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation 
91. Australia has remained a relatively low tax c ountry during the period under review, with total 
tax revenue as a percentage of GDP at around 32% in 2004/05.128  Income tax is the main source of 
tax revenue, and the goods and services tax (GST) is the major indirect tax.  Taxes on international 
trade contributed only 2% to to tal tax revenues (Table III.6). 
Table III.6  
Structure of tax revenue, 2002-05 
(Per cent and $A million) 
 2002/03 2003/04 2004/05 
Total tax revenues ($A million) 238,129 257,268 278,534 
 (Percentage share)  
Direct taxes    
Taxes on income    
Individuals 39.7 39.9 40.3 
Enterprisesa 16.3 16.3 17.8 
Non-residentsb 0.5 0.4 0.4 
Employer payroll taxesc    
General taxes (payroll tax) 4.1 4.1 4.2 
Selective payroll taxes (stevedoring industry charges) - - - 
Other employer labour-force taxes 0.1 0.1 0.1 
Indirect taxes    
Taxes on provision of goods and services    
General taxes (sales tax) 0.4 0.4 0.4 
Goods and services tax (GST) 13.1 13.3 12.7 
Excises and levies 9.1 8.5 8.2 
Taxes on international trade 2.3 2.2 2.0 
Taxes on gambling 1.6 1.6 1.5 
Taxes on insurance 1.3 1.3 1.3 
Taxes on property     
Taxes on immovable property 4.4 4.5 4.5 
Taxes on financial and capital transactions 4.6 5.0 4.2 
Taxes on the use of goods and performance of activities    
Motor vehicle taxes 2.0 2.0 1.9 
Franchise taxes - - - 
Other 0.5 0.5 0.4 
Total 100.0 100.0 100.0 
- Nil or rounded to zero (including null cells). 
a  Amounts collected under petroleum resource rent taxes ar e included in income taxes levied on enterprises. 
b From 2001/02, withholding ta xes on non-residents are no longer separately iden tifiable under the PAYG system.  The values are  
estimates based on methodologies developed by the balance-of-payments area within the ABS. 
c The Australia Bureau of  Statistics introduced changes in the treatment of fringe benefits tax (FBT) in December 2005.  The FB T 
is now classified as part of compensation of employees in the National Accounts, and as part of  taxes on income in Government 
Finance Statistics (GFS).  Thus FBT no longer app ears as an employer payroll tax in the table. 
Source:  Australian Bureau of Statistics, Taxation Statistics 2004-05,  5506.0, Canberra. 
                                                      
128 The average total tax burden for OECD countries is over 36% (OECD, 2006b, p.41). Australia WT/TPR/S/178 
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(a) Indirect taxation 
92. Australia has a lower reliance on indirect taxes than other OECD countries.129  Its indirect 
taxes include a 10% GST on the value-added of ta xable goods and services, a 29% wine equalisation 
tax (WET) on wine and other simila r fermented beverages, and a 25% luxury car tax (LCT) on certain 
vehicles with a retail value above $A 57,009 in 2005/06 (section (2)( iii)(a)).  Excise taxes apply to 
petroleum and other fuel products, beer and potable spirits, as well as cigarettes and tobacco products 
(Table III.7).  In particular, in September 2002,  the Government extended the excise tax to both 
imported and domestically produced ethanol used as fuel;  however, for a period of one year, the 
excise paid by domestic producers of ethanol was fully rebated.130  Thus, during the one-year period, 
it was equivalent to a tariff.  
Table III.7 
Excise rates, 2004-06 
($A) 
Commodity Rates applying 
from 
2.08.2004 Rates applying 
from 
1.02.2005 Rates applying 
from 
1.08.2005 Rates applying 
from 
1.02.2006 
Petroleum and other fuel products (per litre)     
Unleaded petrol 0.38143  0.38143  0.38143  0.38143  
Ultra low sulphur diesel 0.38143  0.38143  0.38143  0.38143  
Other diesel 0.40143 0.40143  0.40143  0.40143  
Aviation gasoline 0.03114 0.03114  0.03114  0.02854 
Aviation kerosene 0.03151 0.03151 0.03151 0.02854 
Fuel oil 0.07557 0.07557 0.07557 0.07557 
Heating oil and kerosene (for bur ner use) 0.07557 0.07557 0.07557 0.07557 
Fuel ethanol 0.38143  0.38143  0.38143  0.38143  
Biodiesel 0.38143  0.38143  0.38143  0.38143  
Greases (per kg) 0.05449 0.05449 0.05449 0.05449 
Oils and lubricants, excluding greases (per litre) 0.05449 0.05449 0.05449 0.05449 
Beer (per litre of alcohol over 1.15%)a     
Draught beer, low strength 6.09 6.16 6.24 6.33 
Draught beer, mid strength 19.12 19.35 19.60 19.89 
Draught beer, high strength 25.02 25.32 25.65 26.03 
Other beer, low strength 30.49 30.86 31.26 31.73 
Other beer, mid strength 35.53 35.96 36.43 36.98 
Other beer, high strength 35.53 35.96 36.43 36.98 
Other beverages, not exceeding 10% alcohol 
content 35.53 35.96 36.43 36.98 
Potable spirits (per litre of alcohol)     
Brandy 56.21 56.88 57.62 58.48 
Fruit brandy, whisky, rum, and liqueurs 60.20 60.92 61.71 62.64 
Other spirits, exceeding 10% alcohol content 60.20 60.92 61.71 62.64 
Cigarettes, cigars, and tobacco (per stick)b 0.22353 0.22621 0.22915 0.23259 
Tobacco products (per kg) 279.41 282. 76 286.44 290.74 
 
a Rate applied per litre of alcohol  on the amount by which the alcohol content (by volume) exceeds 1.15%. 
b Rate applied per stick to cigarettes, cigars and tobaccos with tobacco content of 0.8 grams or less. 
Source: Treasury (2006a), Pocket Guide to the Australian Tax System , Canberra.  Viewed at:  
http://www.treasury.gov.au/documents/866/PDF/Po cket_tax_guide_MYEFO%202005-06.pdf [9 May 2006]. 
                                                      
129 OECD (2006a).  Australia's GST rate of 10% is below the OECD average of 17.6%, and its petrol 
taxes were the third lowest among the OECD countries.   
130 Productivity Commission (2002b). WT/TPR/S/178 Trade Policy Review 
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93. Since the introduction of the New Tax System in  2000, the Australian Government's share of 
indirect taxes in total revenue has been declining.  With the transfer of the GST tax base to the states, 
the abolition of wholesale sales tax, the rem oval of indexation from petroleum excise131, and trade 
liberalization, the proportion of indirect tax to total tax revenue may well decline further in the 
future.132  In particular, changes to the rate or base of  the GST require the unanimous agreement of all 
levels of governments. 
(b) Direct taxation 
94. About 60% of Australia's total tax revenue is collected from direct taxes.  The progressive 
personal income tax rates currently range from zero to 45% (plus the 1.5% Medicare levy).  Since the 
previous Review of Australia, major changes incl ude tax rate reductions and threshold increases, 
which may reduce the tax disincen tive to save (Table AIII.2).  Fo llowing these changes, more than 
80% of taxpayers now face a marginal income tax rate of 30% or less.  As income tax rates may affect 
people's decisions as to how much and where to wo rk, the reduction in the top income tax rates and 
the increase in the thresholds tend to enha nce Australia's international competitiveness.133  In addition, 
the superannuation surcharge was abol ished from 1 July 2005, to increase the incentive to make more 
superannuation contributions.  
95. A flat rate of 30% applies to corporate income taxes; although the rate is higher than for some 
neighbouring countries, it is not out of line with ra tes in OECD countries.  Since the previous review, 
various measures have been adopted to reform business taxes with a view to, inter alia,  reducing their 
complexity and compliance costs, and encouraging investment.  For example, as of 1 July 2002, 
wholly owned corporate groups are taxed as a singl e entity for income tax purposes, which reduces 
corporate groups' compliance costs.  From 10 May 2006, the "diminishing value rate" was increased 
from 150% to 200% (referred to as a "double declin ing balance") for depreciating assets acquired on 
or after 10 May 2006.  This measure provides an in centive for companies to in vest in new plant and 
equipment.  In addition, from 1 July 2005, Au stralia introduced deductibility for business 'blackhole' 
expenditures.134  
96. Measures have also been adopted to reform th e Simplified Taxation System (STS), to further 
reduce the effective tax burden on small busines s and simplify record-keeping and reporting 
requirements.  For example, small businesses with  an annual turnover below $A 50,000 receive a 
25% reduction on their business income tax.  The reduction phases out for businesses with annual 
turnover between $A 50,001 and $A 75,000.  Also , the cash basis accounting requirement for STS 
users was removed, to allow them use the accounting method more appropriate to their circumstances.  
In addition, the period in which the Australia n Taxation Office can audit and adjust the tax 
assessments of businesses in the STS w as reduced from four to two year s, to ease their record keeping 
and compliance requirements. 
                                                      
131 As part of the transition to the New Tax System, the Government cut fuel excise by 6.7 cents per 
litre (cpl) in July 2000, and by 1.5 cpl to 38.1 cpl in March 2001.  The Government then abolished the indexation of fuel excise (six-monthly inflation adjustment), and the rate has remained at 38.1 cpl.  Without the 
removal of indexation, the current excise rate would be around 53.6 cpl (OECD, 2006a). 
132 Treasury (2006a). 
133 OECD (2006a).   
134 These are expenditures not recognized under the income tax law and include pre- and post-business 
expenses (such as the costs of ceasing business, and costs incurred before the commencement, or after the 
cessation of the business). Australia WT/TPR/S/178 
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(c) International tax reforms 
97. With a view to providing Australia with an internationally competitive business tax system, 
the Government initiated international tax reforms in  May 2003, based on its review of international 
tax arrangements (RITA).  The reform reflected the principle that Australia's tax system should not 
impede its businesses seeking to operate in a globalizi ng environment.  Nor should it place barriers in 
front of foreign businesses seeking to use Australia  as a base for their regional headquarters.  The 
main components of the package included:  simplifyi ng the rules for Australia n companies to operate 
in countries where tax arrangements are comparable to Au stralia's;  moving towards a more residence-
based tax treaty policy (as specified in the OECD 's Model Tax Convention);  exempting Australian 
companies from capital gains tax (CGT) for the sal e of certain interests in foreign companies (non-
portfolio) and extending the existing tax exemptio n for foreign dividends and some profits (non-
portfolio);  and amending the foreign investme nt fund rules to reduce the compliance burden for 
superannuation and ma naged funds.   
98. On 10 May 2005, the Government announced furt her reforms including a foreign-income tax 
exemption for temporary residents.135  The Government has also focused on modernizing tax treaties 
with key investment and trading partners.  Australia provided some concessions to the 
United Kingdom and the United States under its bilate ral tax treaties;  it is negotiating with other 
treaty partners with a view to providin g them with similar tax concessions.   
(d) Tax expenditures 
99. Tax expenditures are tax concessions generally d esigned to provide a benefit to a specified 
activity or class of taxpayer.  They can be deliver ed in the form of tax exemptions, deductions, 
rebates, reduced rates, or deferrals.136  Assistance in the form of tax incentives accounted for more 
than two fifths of total budgetary assistance, whic h in 2004/05 amounted to $A 4.6 billion.  Negative 
tax expenditure occurs when these arrangements impose an additional charge rather than a benefit.   
100. Australia publishes an annual Tax Expenditure Statement, which enhances the transparency 
of assistance provided through the tax system;  this  facilitates the evaluation of such assistance and 
thus government accountability to the public.  The r esulting public debate c ontributes to tax reform.137  
The Tax Expenditure Statement for 2005 identified around 270 tax expenditures, of which 94 (8% of 
the total value) pertain to businesses.  The main business-related positive tax expenditures relate to 
off-market share buybacks, the R&D tax concessi on, the Simplified Tax System, the accelerated 
depreciation for mining buildings, and the exempti on from interest withholding tax on widely held 
debentures.138  The largest source of negative tax expenditure  relating to business is the removal of an 
accelerated depreciation allowance fo r plant and equipment in 2001.  
                                                      
135 Temporary residents will be provided with a four-year income tax exemption on most foreign 
source income, including capital gains on foreign assets , from 2006/07.  Temporary residents will also be 
exempt from the Foreign Investment Fund rules regardless of the period of residence (Treasury, 2005, p. 58). 
136 Treasury (2005). 
137 The Tax Expenditure Statement does not include analyses of customs tariffs, and specific purpose 
taxes, such as agricultural levies. 
138 Certain widely held debentures are exempt from interest withholding tax. This exemption was 
extended to publicly offered corporate securities issued in Australia, as well as securities issued by non-resident 
companies operating through a permanent establishment in Australia (Treasury, 2005, p.105). WT/TPR/S/178 Trade Policy Review 
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(ii) Production assistance 
101. Since its previous Review, Australia has c ontinued to provide assistance to domestic 
producers, not just in the form of tariff conces sions and other tax incentives (sections (2)(ii)(e) 
and (3)(iv)), but also grants and concessional loans.   
102. Of the $A 4.6 billion in total budgetary assi stance provided in 2004/05, budgetary outlays 
amounted to almost three fifths;  the rest involve d tax expenditures.  Support has focused largely on 
R&D (42% in 2004/05).139  Budgetary assistance varies marked ly between sectors;  the largest 
proportion is directed to the manufacturing sector.  Services accounted for 30% of total budgetary assistance in 2004/05;  of the total assistance to services, property and business services, finance and 
insurance, and cultural and recreational servi ces accounted for 21%, 16%, and 14%, respectively.
140  
103. Australia's latest notification to the WT O Committee on Subsidies and Countervailing 
Measures (September 2005) listed 17 programmes in fo rce at the Federal level, as well as several 
programmes at state and territory level (Table AIII.3).141  The import duty credit concession under the 
Automotive Competitiveness and Investment Scheme (ACIS) was the most significant industry-specific budgetary assistance programme.  The effec tive rate of assistance (ERA) in 2003/04 was 
24.2% for textiles, clothing, footwear, and leather (TCF), and 10.6% for motor vehicles and parts, 
respectively.
142  Pharmaceuticals also receive a large proportion of assistance in manufacturing.  On 
the other hand, assistance to the pr inting industry (including books and educational textbooks) ceased 
on 30 June 2004.  Similarly, shipbuilding bounty ceased on 31 Dece mber 2004, and the shipbuilding 
innovation scheme ceased on 30 June 2005.143  Assistance to agriculture includes statutory marketing 
arrangements;  for example, the Productivity Comm ission estimated that $A 3 million was provided in 
2004/05 to rice marketing, and the domestic price of rice was maintained at higher levels than would 
otherwise prevail.144  In line with its commitments in agriculture, Australia's bound AMS ceiling has 
been kept at $A 471.86 million since 2000, and its actual level of support as measured by the current 
total AMS declined from $A 308.46 million in 20 01/02, to $A 206.73 million in 2004/05.  Thus, 
                                                      
139 Industry-specific assistance accounted for 27% of to tal support and export pr omotion for 14%.  In 
May 2004, a new assistance package was announced for R&D and related activities, the Backing Australia's 
Ability (BAA) – Building our Future through Science and Innovation Scheme.  It is estimated that the new 
scheme will cost $A 5.3 billion, which, together with the BAA plan announced in 2001, committed total funding 
of $A 8.3 billion up to 2011.  The package covers assist ance for R&D, its commercialization, and related skills 
development.  "Commercialization" here refers to the development of new commercial products, processes, and 
services resulting from the application of R&D activities (Productivity Commission, 2004). 
140 Productivity Commission (2006e), Table A.4. 
141 WTO document G/SCM/N/123/AUS/Rev.1, 23 September 2005.  In addition to notified subsidies, 
the Department of Industry, Tourism and Resources (DITR) has several other programmes, including the 
Commercialising Emerging Technologies (COMET) programme, the Pooled Development Funds (PDF) 
programme, the Industry Capability Network Limited (ICNL) programme, the Major Project Facilitation (MPF) 
programme, the Supplier Access to Major Projects (SAMP) programme, and the Venture Capital Limited 
Partnership (VCLP) programme (DITR online inform ation.  Viewed at:  http://www.itr.gov.au/ 
content/itrinternet/cmsindexpage.cfm?objectid=48A 329AC-20E0-68D8-EDAC3ACDE65CAA6E&indexType= 
Programs%20and%20assistance [12 September 2006]). 
142 Productivity Commission (2004), Table 2.4.  ERAs are calculated by dividing the net assistance to 
an industry by the industry's unassisted value added.  ERAs are not available for the services sector, reflecting 
partly technical issues. 
143 WTO document G/SCM/N/123/AUS/Rev.1, 23 September 2005.   
144 Productivity Commission (2006e), p. 3.15. Australia WT/TPR/S/178 
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trade-distorting domestic support remains well below Uruguay Round commitments.  De minimis 
provisions have been used for sugar and wheat, as well as non-product specific AMS.145   
104. In June 2004, an Energy White Paper announced measures to commercialize energy 
technologies, particularly greenhouse abatement techniques.146  The measures included a fuel excise 
reform from July 2006 to July 2015:  from 1 July 20 06, fuel excise credits of more than $A 3 million 
per year are to be available to businesses that are large energy users, on the condition that they join 
the Greenhouse Challenge Programme (Chapter IV(3)(ii)).147    
(iii) Competition and consumer policy 
(a) Competition policy 
General framework 
105. Australia's National Competition Policy (NCP) framework explicitly recognizes that 
competitive markets generally serve the interest s of consumers and the community, by providing 
strong incentives for suppliers to ope rate efficiently, be price competitive, and be innovative.  The 
NCP was formulated in 1995 when the Commonwealth together with state and territory governments 
committed to consolidate their implementation of competition policies.  One innovation of the NCP 
was the annual competition payments, which were allocated between 1997/98 and 2005/06 by the 
Commonwealth to state and territory governments fo r their implementation of the reform;  where 
there was lack of progress on NCP-related reform , the Government, upon recommendations from the 
National Competition Council (N CC), could reduce payments.148   
106. NCP reform has included:  extending compe tition legislation to all business activity in 
Australia;  maintaining competitive neutrality, so  that government businesses compete with private 
firms on an equal footing;  reforming public m onopolies, such as separating the regulatory function 
from commercial operations, ensuring third-part y access to certain infrastructure services, and 
preventing overcharging by monopoly service providers ;  reforms in the energy, water, and road 
transport sectors;  and legislative reviews. 
107. Competition legislation is contained in the Tr ade Practices Act 1974 (TPA), which covers all 
business activities, including government business.149 The TPA prohibits arrangements that 
substantially reduce competition, and that contain an exclusionary or price-fixing provision, as well as 
secondary boycotts, misuse of substantial market po wer, cartel conduct, resale price maintenance, and 
mergers or acquisitions that may substantially lessen competition.150  However, exemptions to the 
                                                      
145 WTO document G/AG/N/AUS/61, 19 April 2006. 
146 Department of the Prime Minister and Cabinet online information.  Viewed at:  
http://www.pmc.gov.au/publications/energy_ future/docs/energy.pdf [16 May 2006]. 
147 During the reform process, all off-road business us e of fuel is to receive an excise credit;  the 
existing partial excise on fuel used in heavy vehicles is to be transferred into a road-user charge from July 2006;  diesel and fuel oil used in commercial power generation is to be exempted from excise tax from 1 July 2006, 
and gaseous fuels used for electricity generation continue to be excise free;  a single business credit system was 
introduced in July 2006.   
148 Total funding of $A 5.7 billion was allocated for  competition payments over the period 1997/98 to 
2005/06.  This funding level, estimated by the Industry Commission in 1995, represents the benefits of 
implementing the reform programme (Productivity Commission, 2005c).  
149 It also includes telecommunication-specific competition rules. 
150 Section 50 of the TPA prohibits mergers or acquisitio ns that would have the effect or likely effect of 
substantially lessening competition in a substantial market for goods or services.  Recommended by the Dawson Review (see below), a voluntary form al clearance process for mergers wa s proposed, which would work in WT/TPR/S/178 Trade Policy Review 
Page 64 
 
 
TPA remain for international liner cargo shipping (Chapter IV(5)(vi)(a)), and export contracts;  
although details of export contracts have to be filed with the ACCC, restrictions on cartels originating 
from abroad are stricter than on cartels formed by domestic exporters.  Anti-competitive behaviour 
may thus be allowed on a case-by-case basis th rough an administrative process managed by the 
Australian Competition and Consumer Commission (ACCC), and on condition that they are in the 
public interest.151   
108. The Department of the Treasury has prim ary policy responsibility for the competition 
provisions in the TPA and the NCP, and administers key agencies, including the NCC and the ACCC.  As part of the new National Reform Agenda, the f unctions of the NCC are being reviewed;  up until 
2005, the NCC reported on the implementation progress of NCP reforms.
152  The ACCC is an 
independent statutory authority charged with, inter alia,  enforcing the TPA and the state/territory 
competition legislation, and regulating national infrastructure services.153  It conducts investigations 
on anti-competition matters.  During 2004/05 , the ACCC investigated around 200 competition 
matters, 11 of which were concl uded while 15 were before the c ourts;  penalties were imposed, 
inter alia,  against eight companies and eight individuals for petrol price fixing in the Ballarat region 
in Victoria, against Liquorland for contraventions  relating to its response to liquor licensing 
applications by smaller competitors, and agai nst several companies regarding their illegally 
maintained prices by discouraging or banning discounting.154 
Legislative review and reform 
109. As part of the NCP, under the Competiti on Principles Agreement (CPA), governments 
(Commonwealth, states and territories) undertake to review and reform legislation that restricts 
competition.  The governments agreed that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction to the community as a whole outweigh the costs, and 
the objectives of the legislation can only be achieved by restricting competition.  The CPA provides guidance on issues that should be considered in a re view;  these include, objectives of the legislation, 
nature, cost, and benefits of the restriction an d the likely effect on competition and on the economy 
generally, and alternative measures for achie ving the same result including non-legislative 
approaches.  Since 1996, when all Australian govern ments published a legislation review schedule, 
approximately 1,800 pieces of legisla tion have been identified for review. 
110. Reforms to the TPA commenced in October 2006, based on recommendations made in the 
2003 Review of the Competition Provisions of the Trade Practices Act (Dawson Review).  The 
Dawson Review emphasized that the TPA should remain focused on protecting the competition 
process and not be used for industry policy, nor to preserve uncompetitive companies.  It 
recommended that the TPA be ame nded to improve its operation by, inter alia,  providing for greater 
accountability, transparency, and timeliness in deci sion-making by the ACCC, and reducing the 
regulatory burden on business.  Reform measures to be adopted include strengt hening functions of the 
                                                                                                                                                                    
 
parallel with the existing informal clearance proce ss operated by the ACCC.  The ACCC is also adopting 
principles recommended by the International Competition Network (ICN), in relation to accountability, 
transparency, efficiency, and timeliness. 
151 In certain circumstances these exemptions are reviewed by the ACCC, and may be appealed to the 
Australian Competition Tribunal (ACT). 
152 Although the NCC is fu nded by the Commonwealth Government , it is accountable to all Australian 
states and territories through the Council of Australian Governments (COAG) (viewed at:  
http://www.ncc.gov.au  [17 May 2006]). 
153 ACCC online information.  Viewed at:  http://www.accc.gov.au  [17 May 2006]. 
154 OECD (2005a). Australia WT/TPR/S/178 
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ACCC, increasing penalties for contraventions of the TPA, improving transparency for mergers, and 
setting up a simpler and less costly process for collective bargaining by small businesses.155   
111. The National Access Regime (Part IIIA of the TPA) provides a legislative framework for 
third party access to certain services provided by essen tial infrastructure facilities, such as electricity 
networks, rail tracks, and natura l gas pipelines.  By giving economic entities the legal right to 
negotiate the use of these services, the regime inte nds to ensure that businesses are offered reasonable 
terms and conditions of access.  In the event th at the parties are unable to reach a commercial 
agreement, it provides recourse to binding arbitration.  In response to a Productivity Commission review, the Australian Government agreed to a ra nge of measures designed to clarify the Regime's 
objectives and scope, encourage efficient investment  in infrastructure, strengthen incentives for 
commercial negotiation, and improve the transparency of regulatory processes.
156  Legislation to 
address these issues also took effect on 1 October 2006. 
112. On 2 February 2005, the Government announced its intention to introduce criminal penalties 
for serious cartel conduct.  The proposal would prohibit any agreement between competitors that 
contains provisions to fix prices, restrict output, divi de markets or rig bids.  Legislation in this regard 
is currently being prepared. 
113. The Productivity Commission conducted a revi ew of the NCP and concluded that the 
legislative review programme should continue, but concentrate more on "significant" anti-competitive 
legislation and be more transparent and indepe ndent.  Recommended priorities include anti-dumping, 
cabotage restrictions, single-desk marketing for wheat exports, pharmaceutical goods, and workers' 
compensation insurance.157  In 2005, the COAG reviewed the NCP, taking into account 
recommendations from the Productivity Commission.  Following the review, on 10 February 2006 the 
COAG endorsed a new National Reform Agenda, wh ich included competition and regulation reforms 
aimed at facilitating investment in  energy, transport, and other export-oriented infrastructure, and 
achieving efficient use of infrastructure by improving pricing and investment signals and establishing 
competitive markets.  The COAG is expected to consider specific re form proposals in these areas in 
2007.  In addition, reform to reduce regulatory bu rden has been pursued in  response to the Banks' 
Taskforce Report (Chapter II(4)). 
Price surveillance 
114. Price controls tend to distort market outcomes.   Furthermore, for non-renewable resources, if 
prices are suppressed, sustainable supply of these resources in the long run could be compromized.  On the other hand, according to the Productivity Co mmission, without effective competition in these 
markets, relaxing price controls coul d lead to inefficiently high prices.
158   
                                                      
155 In March 2004, a Senate Economics References Committee issued a report on the effectiveness of 
the TPA in protecting small business.  The report consider ed a range of issues including those relating to misuse 
of market power (section 46), unconscionable conduct (particularly section 51AC), and the administration of the 
TPA.  The Government accepted 8 of the 17 recomme ndations, and intends to introduce legislation to 
implement them in the near future (Australian Parliament online information.  Viewed at:  
http://www.aph.gov.au/senate/committee/economics_ctte /completed_inquiries/2002-04/trade_practices_1974/ 
report/government_response.pdf [17 May 2006]). 
156 The Australian Government's response to the PC report was viewed at: 
http://www.treasurer.gov.au/tsr/cont ent/publications/FinalReport_Nationa lAccessRegime.asp [17 May 2006]. 
157 Productivity Commission (2005c). 
158 In this case, community service obligation (CSO) pa yments may be applied to ensure market access 
by low income users (Productivity Commission, 2005c, p. 198). WT/TPR/S/178 Trade Policy Review 
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115. Price restrictions applied under the Pri ce Surveillance Act 1983 (PS Act) are now 
incorporated into the TPA (Part VIIA).  Currently, there are three forms of price surveillance:  price 
inquiries, where the ACCC is guided by portfolio Ministers to undertake a public inquiry;  price notification, where the portfolio Minister requi res specific companies to notify the ACCC of a 
proposed price increase;  and price monitoring, wh ere the portfolio Minister directs the ACCC to 
monitor the prices, costs, and profits of compan ies and government agencies relating to specific goods 
and services.  Price surveillance may be conducted in formally or formally.  There is no legislative 
process for informal surveillance,  which has been used to respond to consumers' concerns in, 
inter alia,  insurance, petrol, and bank fees and charges.  Under the formal price surveillance system, 
penalties may be applied for non-compliance actions.
159  The ACCC conducts formal price 
surveillance on aviation and airports, electricity , telecommunications, and container stevedoring.160  
Sector-specific issues 
116. To simplify the regulatory framework for the tr ansmission and distribution of electricity, on 
1 July 2005, an Australian Energy Regulator (AER) and an Australian Energy Market Commission 
(AEMC) commenced operation (Chapter IV(3)(ii )).  A Memorandum of Understanding was signed 
between the AER, the AEMC, and the ACCC.  U nder the MOU, the ACCC retains responsibility as a 
regulator of competition matters;  the AEMC formulates national electricity rules under the new National Electricity Law, whic h was amended in June 2005.
161  The AER is to assume economic, 
regulatory, enforcement, and monitoring functions in relation to electricity and gas markets.  
117. The Telecommunications Competition Act 2002 was enacted in December 2002, to promote 
competition and investment in the telecommunication sector.  In October 2005, the 
Telecommunications Legislation Amendment (C ompetition and Consumer Issues) Act 2005 made 
further amendments to the competition provisions specific to telecommunications services.  The amendments included the divestiture of the Government 's majority stake in Telstra.  A revised price 
control regime was imposed on Telstra, from 1 Janua ry 2006 to 31 June 2009 (Chapter IV(5)(v)).   
118. Australia has limited water resources.  In   2004, a National Water Initiative (NWI) to 
establish a market framework for the management of water resources in both urban and rural areas 
was signed by the Commonwealth Government and the governments of New South Wales, 
Queensland, South Australia, Victoria, the Northern  Territory and the Australian Capital Territory, 
and later by Tasmania (Chapter IV(3)(iii)).  Western Australia acceded to the NWI in 2006.  Consistent with the NWI, a National Water Commission (NWC) was established recently;  it accredits state and territory NWI implementation plans,  assesses progress in implementing the NWI, and 
advises on how to better realize the objectives of the NWI.   
International cooperation 
119. Australia continues to participate actively in matters related to competition legislation and 
policy in the APEC, the OECD, the WTO, and the International Competition Network (ICN).
162  The 
                                                      
159 For example, if a firm does not comply with in formation requests by the ACCC, or it provides false 
or misleading information, the firm could be subject to a penalty.  
160 ACCC online information.  Viewed at:  http ://www.accc.gov.au/content/index.phtml/itemId/3671  
[17 May 2006]. 
161 The AER is to replace the 13 electric ity regulators and 8 gas regulators. 
162 In the WTO Working Group on the Interaction between Trade and Competition Policy, Australia 
has submitted papers on its approaches to "hard-core" cartels (HCCs), benefits from voluntary cooperation 
between competition authorities, description and core principles of its competition policy framework, and its 
involvement in providing technical  assistance to other countries.  (WTO documents WT/WGTCP/W/198, Australia WT/TPR/S/178 
 Page 67 
 
 
ACCC has cooperation arrangements with corr esponding agencies in Canada, Chinese Taipei, 
New Zealand, Papua New Guinea, and Republic of Korea. 
(b) Consumer protection policy 
120. During the period under review, the Governme nt commenced reviews of its consumer 
protection policy, to consider options for its pr oduct safety framework, and penalties available for 
breaches of the consumer protection provisions.  Responsibility for product safety matters at the 
Commonwealth level is with the ACCC, and the Australian Securities and Investments Commission 
(ASIC) continues to be the primary regulatory agency responsible for consumer protection for 
financial services.  In addition, negotiations with  the EC on the development of an administrative 
arrangement to share information on consumer  protection policy were finalized in 2002. 
121. Since 2002, the ACCC has been undertaking legal actions against, inter alia:   misleading and 
deceptive conduct;  pyramid and referral selling;  br eaches of the product safety/liability provisions of 
the TPA;  harassment and coercion;  unsolicited goods;  and price exploitation.  It has taken 
enforcement action against a number of businesses th at allegedly breached mandatory safety or 
information standards.163  Other actions taken include conductin g consumer and business education on 
competition, fair trading and consumer protec tion rights and responsibilities, as well as enhancing 
industry self-regulation. 
(iv) Corporate governance  
(a) Private sector 
122. Australia’s corporate governance framework cons ists of a number of accounting standards 
(which have the force of law), the Australian St ock Exchange (ASX) Listing Rules, and the ASX 
"Principles of Good Corporate Governance and B est Practice Recommendations", together with 
voluntary self-regulatory codes of practice.  Various private sector organizations have also issued 
documents providing guidance on corporate govern ance, including the Investment and Financial 
Services Association, the Association of Superannua tion Funds of Australia, the Chartered Secretaries 
Australia, and the Australian Institute of Company Directors. 
(b) Government trading enterprises 
123. Government trading enterprises (GTEs) are government-owned or government-controlled 
entities that are mainly engaged in the production of goods and services;  they are required to 
substantially or fully cover their costs.164  Australia's competition legislation covers all business 
activities, including those of GTEs.165  GTEs, often as monopolies, provide essential services such as 
                                                                                                                                                                     
26 July 2002;  WT/WGTCP/W/199, 26 July 2002;  WT/WGTCP/W/211, 24 September 2002;  and 
WT/WGTCP/W/232, 23 May 2003.) 
 163 The Product Safety Policy Section of the A CCC develops national (Commonwealth) mandatory 
safety and information standards for se lected consumer products, for items such as baby walkers, bean bags, 
bunk beds, caravan jacks, children's nightwear, children's swimming aids, cigarette packaging, cosmetics, elastic luggage straps, exercise cycles, high tar cigarettes, latex gloves, motor cycle helmets, pedal bicycles, sunglasses, 
trolley jacks, and vehicle jacks. 
164 Productivity Commission (2005a).  The GTEs are ou tside the general government sector, and are 
also separate from government financial enterprises (in the banking, insurance, and related sectors).   
165 Under a national tax equivalent regime (NTER), most GTEs are required to pay taxes on their 
operating profits at the same company tax rate as pr ivate business.  Previously GTEs were subject to 
inconsistent tax-equivalent regimes of their respective portfolio ministries. WT/TPR/S/178 Trade Policy Review 
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water, electricity, gas and transport, and poor governance practices may di stort these enterprises' 
operations in asset management, inv estment, and dividend distribution.166   
124. Current governance arrangements for GTEs largely reflect the various reforms that have been 
introduced, including commercializing and replic ating private sector principles and practices, 
separating non-core activities from these enterprises,  and placing greater emphasis on cost recovery.  
However, under-performance remains, and reforms are necessary particularly in external governance, 
which refers to the arrangement between the en terprise and ministers (and government agencies).  
Considering the importance of the GTEs in certain  sectors, improvement in governance could bring 
significant benefits to the economy.  Thus, the Productivity Commission in a recent research paper 
made several recommendations, including clarifying the objectives and ownerships of the GTEs, and 
improving transparency in the external governance role of Ministers.167  
125. GTEs established as companies are subject to th e Corporations Law.  However, most GTEs 
are established as statutory entities and may have  objectives that contradict their commercial 
functions.  The Commonwealth Authorities a nd Companies Act 1997, and the "Governance 
Arrangement for Commonwealth Government Bu siness Enterprises 1997" provide a framework on 
corporate governance.  Under the Governance Arrang ement, the relationship between the Government 
and its GTEs is similar to the relationship betw een a holding company and its subsidiaries.  The 
Government's ownership is generally represente d by two "Shareholder Mini sters", the portfolio 
Minister (the Minister in charge of the portfo lio in which the GTE is involved), and the Finance 
Minister.168   
126. The principal objective for GTEs is to add va lue to shareholders, by minimizing cost, and 
earning at least a commercial rate of return.  Th e Government may impose price controls on GTEs 
providing goods and services in a monopolistic market, or specify other targets such as community service obligations (CSOs).
169  In addition, to enable greater public accountability, GTEs are required 
to prepare a Statement of Corporate Intent (SCI) in consultation with their shareholder ministers.  As a 
general rule, the Government does not provide form al guarantees for GTE liabilities;  any guarantees 
provided in the past continue to apply until they mature.170  Government approval is required to set up 
a partially owned GTE, or to change a GTE from wholly to partially government-owned.  GTEs 
                                                      
166 Productivity Commission (2005a). 
167 Productivity Commission (2005a). 
168 Within the Department of Finance and Administration, the Government Business and Private 
Financing Advice Unit (GBPFAU) is responsible for providing, inter alia , strategic advice to the Minister on the 
commercial performance of the Government's investment in, inter alia , the Australian Po stal Corporation, 
Australian Rail Track Corporation Limited, Airservices  Australia, and the Defence Housing Authority, as well 
as the Export Finance and Insurance Corporation, and Snowy Hydro Limited. 
169 Governments sometimes require GTEs to engage in activities that the enterprise would not 
undertake on purely commercial grounds.  Under these community service obligations (CSO), GTEs often have 
to provide economic and social benefits to the comm unity.  Previously, the Gove rnment recognized these 
obligations by funding operating deficits of the relevant G TEs;  the current policy is to  make direct payments to 
the GTEs for the provision of CSOs.  In 2003/04, rail GTEs received almost  60% of the overall reimbursement;  
GTEs in water, electricity, and urban transport sector s received 16%, 13%, and 11%, respectively (NCC online 
information.  Viewed at:  http://www.ncc.go v.au/sector.asp?sectorID=19 [28 July 2006]). 
170 Under the Australian Industry Development Corporation Act 1970, guarantees were provided by the 
Commonwealth Government to the Australian Indust ry Development Corporation (AIDC) in certain 
circumstances.  The AIDC was privatized in 1998 but its previous obligations remain covered by this guarantee until they mature. Australia WT/TPR/S/178 
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wishing to establish partly-owned subsidiaries, purch ase a controlling interest in other companies, or 
form joint ventures, must notify their intention to the shareholder ministers.171 
(v) Intellectual property rights  
(a) Overview 
127. Australia is a member of the World Intellectua l Property Organization (WIPO) and is a party 
to most multilateral IPR agreements.172  Australia has committed to acceding to both the 1996 WIPO 
Copyright Treaty and the 1996 WIPO Performan ces and Phonograms Treaty (WPPT), subject to 
completion of the necessary legisla tive and consultative processes.   
128. IP Australia remains responsible for the admini stration of patents, trade marks, and designs, 
and since 27 October 2004, has been responsible  for plant breeders' rights (previously the 
responsibility of the Department of Agriculture, Fi sheries and Forestry).  The Advisory Council on 
Intellectual Property (ACIP) advises the Minister for Industry, Tourism and Resources, as well as IP 
Australia, on matters relating to intellectual propert y policy and the strategic administration of IP 
Australia. Following administrative changes in 2004, the Attorney-G eneral's Department has sole 
responsibility for the administration and policy in re lation to the Copyright Act 1968 and the Circuit 
Layouts Act 1989. 
129. During the period under review, various pieces of legislation have been amended.  
Amendments to the Copyright Act 1968, and a minor  change to the Patents Act 1990, in particular, 
were made to incorporate requirements under the AUSFTA.  The authorities state that these changes 
are applied on an MFN basis to all WTO Members.   
130. According to a report in 2004 by the Australia n National Audit Office on intellectual property 
policies and practices within the Australian G overnment, the Commonwealth Government did not 
have a "whole-of-government" policy appr oach to manage intellectual property.173  Consequently, 
agencies are responsible for devising their own management approaches, and the treatment of 
intellectual property assets in an agency's financ ial statement could be complex and uncertain.  
Accordingly, the Attorney-General's Department  is leading the development of a "whole-of-
government" approach to manage inte llectual property.  Currently, all states and territories, with the 
exception of the Australian Capital Territory, have ei ther implemented, or are planning to implement, 
a policy addressing intellectual property manage ment at the "whole-of-government" level. 
(b) Industrial property 
Patents 
131. The Patents Act 1990 provides protection for sta ndard patents and innovation patents, with 
terms of validity of 20 and 8 year s, respectively.  The innovation patent, which replaced the previous 
                                                      
 171 Department of Finance online information.  Viewed at:  http://www.f inance.gov.au/GBPFAU/ 
[18 May 2006];  and "Governance Arrangement for Commonwealth Government Business Enterprises 1997".  
Viewed at:  http://www.finance.gov.au/GBPFAU/docs/Governance_Arrangements_June_1997.PDF  [18 May 2006]. 
 172 For Australia's participation in multilateral IPR agreements, please see WIPO online information.  
Viewed at:  http://www.wipo.int/about-ip/en/ip worldwide/pdf/au.pdf [19 May 2006].   
173 Intellectual property management requires measures that can enable an agen cy to identify, protect, 
and control intellectual property assets  and, where appropriate, facilitate e xploitation of these assets.  Intangible 
assets (including intellectual property) have been increasin gly recognized as a considerable part of an agency's 
value (ANAO, 2004). WT/TPR/S/178 Trade Policy Review 
Page 70 
 
 
petty patent in 2001, intends to stimulate innovation in SMEs by providing them with easier access to, 
but a shorter term of, protection fo r inventions.  The innovation patent covers the same subject matters 
as the standard patent, with the exception of anim als and plants, and biological processes for the 
generation of animals and plants.   
132. The IP Laws Amendment Act 2006, passed on 27 September 2006, includes various 
amendments to the Patent Act 1990, the Designs Act 2003, the Olympic Insignia Protection Act 1987, 
the Plant Breeder's Rights Act 1994, and the Trade Marks Act 1995.  A minor change was also made 
to the Patents Act to implement an AUSFTA require ment regarding the revocation of patents.  The 
number of patents granted, however, declined  from 13,844 in 2002 to 11,168 in 2005.   
Trade marks 
133. The Trade Marks Act 1996 provides for the regi stration of trade marks, collective trade 
marks, certification trade marks and defensive trade marks.  Under the Act, trade marks are protected 
for ten years and renewable indefinitely, upon request and payment of the appropriate fee.174  
Amendments to the Act were mainly minor and technical changes. 
Industrial designs 
134. On 17 June 2004, the Designs Act 1906 was re placed by the Designs Act 2003, which 
implemented a new system for the registration of industrial designs.175  The term of registration of a 
design is:  five years from the filing date of the application in which the design was first disclosed;  or, for renewal, ten years from the filing date of the a pplication in which the design was first disclosed.  
Thus, only one renewal is possible under the Designs  Act 2003.  However, design applications filed 
under the Designs Act 1906 continue to have a possi ble maximum term of 16 years.  Also on 17 June 
2004, the Designs Regulation 2004 replaced th e Designs Regulation 1982, and implemented 
procedures and processes associated with the new design registration system.
176   
Protection of plant varieties 
135. Under the Plant Breeders' Rights (PBR) Act 1994, unauthorized use of protected plant 
varieties, and different kinds of false representation regarding plant varieties, are criminal offences.  
Enforcement of PBRs is generally the responsibility of holders of the rights through civil procedures.  
In 2002, a PBR Amendment Act 2002 amended the 1994 Act, to, inter alia,  clarify plant breeders' 
rights to remuneration in circumstances where some  public interest concerns restrict their rights.177  
Geographical indications(GIs)178  
136. GIs are protected through:  the Trade Marks Ac t 1995, which allows for the registration of 
GIs as certification trade marks, provided that certain criteria are met;  and the Trade Practices Act 
                                                      
174 WTO (2003). 
175 The Designs Act 2003 defines a design as the overall appearance of a product resulting from one or 
more visual features of the product.  A product is a thing that is manufactured or hand made.   
176 In particular, the Regulation provides for minimum filing requirements for a design application, and 
prescribes details for the registration, publication, and examination processes, as well as for the amendment, 
withdrawal, and lapse of design applications, and a new fee payment system. 
177 The Plant Breeders' Rights (PBR)  Act 1994 and the Plant Breeders' Rights Regulations 1994 
provide protection for new varieties of plant, fungal, al gal species and transgenic plants, in line with UPOV 
guidelines and test procedures (Dep artment of Parliament, Plant Breeders' Rights Amendment Bill 2002, Bill 
Digest No.164, 2001/02). 
178 WTO document IP/C/W/392, 9 December 2002. Australia WT/TPR/S/178 
 Page 71 
 
 
1974, which prevents misleading conduct.  In ad dition, the Australia New Zealand Food Standards 
Code contains prohibitions on false or misleading indications of the origin, character or place of 
manufacture of food.  Protection is also provided through labelling legislation, such as the Commerce 
Trade Descriptions Act 1905. 
137. GIs for wine are protected through the Austra lian Wine and Brandy Corporation Act 1980, 
which establishes a "Register of Protected Names" for the protection of geographical indications of 
Australian and foreign wine.  The Geographical In dications Committee of the Australian Wine and 
Brandy Corporation administers GIs for wine.  In  2004, the Australian Wine and Brandy Corporation 
Act was amended, to allow trade mark owners to ob ject to the determination related to geographical 
indications, and to provide for the cancellation of Australian geographical indications.    
Other 
138. There have been no changes regarding tr ade secrets during the review period.  
(c) Copyright and related rights 
Copyright 
139. The Copyright Act 1968, as amended, protects a ll original literary, dramatic, musical, and 
artistic works for the lifetime of the author plus 70 y ears.  If, before the author's death, the work has 
not been published, performed in public, broadcast, or offered or exposed for sale to the public, the 
copyright in the work continues to subsist until the end of 70 years after the end of the calendar year 
in which the work was fi rst exposed to the public.179  For anonymous and pseudonymous works, 
copyright protection is provided for 70 years after th e end of the calendar year in which the work was 
first published.180  Unlike for patents, registered trade ma rks, designs, and plant breeders' rights, 
where registration is a precondition for protection,  copyright is granted automatically where the 
substantive requirements are fulfilled.181 
140. During the period under review, various amendmen ts have been made to the Copyright Act 
1968, mainly to reflect changes under the AU SFTA.  The Copyright Amendment Bill 2006 was 
introduced into Parliament on 19 October 2006.  Amendments made to the Copyright Act under the 
US Free Trade Implementation Act 2004 include:  br oadening the definition of criminal offences to 
target copyright infringements undertaken for comme rcial advantage or financial gain, as well as 
making it an offence for a person to engage in significant infringing activity on a commercial scale 
but with no direct or indirect motivation of financial gain182;  and extending the term of protection for 
copyright material by 20 years for works, sound recordings, and films. 
141. Other amendments to the Copyright Act resulted, inter alia,  from the Designs (Consequential 
Amendments) Act 2003, the Copyright Legislation Amendment Act 2004, and the Copyright Amendment (Film Directors' Rights) Act 2005.
183   
                                                      
179 The Copyright Act 1968 also protects subject matter other than works (cinematograph films, sound 
recordings, broadcasts and published editions), fo r 70, 50, or 25 years (Part IV, Division 4). 
180 Part III, section 33 and 34 of the Copyright Act 1968. 
181 APEC (2004). 
182 For example, this offence may be committed by a person who creates a website that allows 
infringing copies of movies or computer software to be downloaded to internet users for free. 
183 The Designs (Consequential Amendments) Act 2003 contained amendments dealing with the 
overlap between copyright and industrial design protection.  The Copyright Legislation Amendment Act 2004 WT/TPR/S/178 Trade Policy Review 
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Parallel imports 
142. Some parallel imports are allowed under the Copyright Act 1968 and, in certain 
circumstances, under the Trade Marks Act 1996.  Si nce 2002, there have been no amendments to the 
trade marks legislation relating to parallel im portation.  The Copyright Amendment (Parallel 
Importation) Act 2003 (PI Act) amended the Copyri ght Act 1968 to extend parallel importation and 
subsequent commercial distribution to computer software, electronic books, electronic journals, and 
electronic sheet music, with the notable excepti on of films (digital video discs (DVDs)).  These 
provisions also provide that the use of trade marks on those goods shall not prevent their parallel importation.
184  
Circuit layout 
143. The Circuit Layouts Act 1989 remains the major legislation for layout designs.185  A layout 
design is protected for ten years from first commercia l exploitation, and if not exploited, ten years 
from when it was made.  The Circuit Layo ut Amendment Regulations 2003 commenced on 
23 December 2003, and updated the list of eligible  foreign countries to which Australia extends 
protection of circuit layouts designs.  
(d) Enforcement  
144. IP enforcement is a priority issue for the Australian Government.  IP rights holders may 
enforce their IPRs by civil action against infringers.  Courts, both at the Federal and the state level, 
have jurisdiction over matters related to intell ectual property infringement. The Australian Federal 
Police and state police agencies are in charge of cr iminal investigations, w ith prosecutions conducted 
by the relevant state or Commonwealth office of the Director of Public Prosecutions.  Penalties for 
offences relating to intellectual property rights in clude fines and imprisonment.  For copyright 
offences, the maximum penalty is a fine of not more  than $A 93,500 together with imprisonment of 
not more than five years.  For tr ade mark offences, penalties may take  the form of fines of up to $A 
55,000, and/or imprisonment for up to two years for individuals;  monetary penalties for a company can be up to five times the penalty for individuals.  At the border, upon acceptance of a notice of 
objection lodged by the IPR owner, Custom s may seize and hold imported goods infringing 
intellectual property rights.  Duri ng the period under review, notices of objection were lodged for a 
wide variety of trade mark and copyright protected items.
186   
145. The Australian Government has also established a number of forums to facilitate discussion 
and improve coordination of IP enforcement issues.   This includes an Interdepartmental Committee, 
which brings together policy and enforcement agencies, as well as an Intellectual Property 
Enforcement Consultative Group, which includes indus try as well as federal, state and territory law 
enforcement and government representatives. 
                                                                                                                                                                     
made various minor and clarifying amendments to the Copy right Act, with a view to ensuring compliance with 
obligations under the AUSFTA.  The Copyright Amendment (Film Directors' Rights) Act 2005  gave film 
directors a share of the copyright in  the films that they direct.  The Copyright (International Protection) 
Regulations 1969 were amended in 2003 and 2004, to extend copyright protection automatically to foreign 
works and subject matter in compliance with relevant international conventions.  
184 Under the amendments, the Federal Magistrates Court has jurisdiction in various civil copyright 
matters, and is making efforts to establish a quicker, si mpler, and cheaper forum for resolving routine cases. 
185 WTO (1998). 
186 Customs online information.  Viewed at:  http://www.customs.gov.au/site/page.cfm?u=4393.  
[1 June 2006].