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The Forum > Article Comments > Free trade from tariffs > Comments

Free trade from tariffs : Comments

By David Leyonhjelm, published 12/1/2015

Many believe we now only have tariffs on cars and clothing. In fact, we impose tariffs on nearly all categories of imported products, in an absurd and scattergun way.

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These Tariffs are there to support Australian Industry. Those with Tariffs protect Australian jobs those without are deemed not in need of protection.
Posted by ponde, Monday, 12 January 2015 8:11:12 AM
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Tariffs are without doubt the most efficient, easiest & cheapest to collect & police form of tax available to any country.

Not only that, it is about the only form of tax public will be in favour of when increased or introduced. They are right too, tariffs help generate jobs.

Mucking around with GST rates to find the money to cover Labors waste will require huge enforcement bureaucracy, & will net peanuts compared to a 5% across the board tariff, & will still be avoided by many. Tariffs on the other hand are paid by all, & totally unavoidable.

It is a measure of the stupidity of politicians that we ever reduced, or eliminated so many of ours.

Sorry David, you've got this one way wrong.
Posted by Hasbeen, Monday, 12 January 2015 12:14:34 PM
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Free Trade Agreements are wrong because they bind even future generations which may not agree. But given that 75% of goods already carry no tariff and given the crazy cost of administering the remaining 25% and given the degree of harassment experienced by importers, the way to go is to change tariffs from being a legal duty into being a moral duty which is shameful to avoid.

In other words, make tariffs voluntary.

Have a web-site where purchasers of imported goods can easily find the appropriate recommended tariff on what they bought and pay online, either anonymously if they so wish or otherwise receive a certificate for their payment.

This can bypass and defeat any free-trade-agreement!
Posted by Yuyutsu, Monday, 12 January 2015 1:53:39 PM
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Why don't we have an honesty system for Income tax as well.

This is the tax rate for this year - pay it only if you are morally willing to do so??

LOL
Posted by ponde, Monday, 12 January 2015 2:08:40 PM
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AIUI the reason why "when you paid for Christmas lunch, there was a tariff on the ham but not the turkey" is that the latter is a prohibited import for quarantine reasons.

I agree we should get rid of far more tariffs, but unilaterally abolishing them all is not the best way to do it, as the cost of our being denied free access to markets is also high. Bilateral (and better still, multilateral) agreements are better, and we need not approach each country individually. We could have a standard agreement open to all who are interested, and if they want to vary it, they can approach us.
Posted by Aidan, Monday, 12 January 2015 2:29:04 PM
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Hasbeen,
<<Tariffs are without doubt the most efficient, easiest & cheapest to collect & police form of tax available to any country.>>
That's what I used to think in the early 1990s. But then I realised that:
They're extremely unfair to the world's poorest as the people are denied a fair return for their efforts.
They raise the cost of supply, so all our businesses end up being less competitive.
The businesses they benefit are the ones that we're uncompetitive at anyway.
If we abolish tariffs then our dollar could be lower (making all our businesses more internationally competitive) without general price levels being any higher.

It's much better to focus on what we're good at than to try and protect the industries that we're bad at. Admittedly there is a third category: things we're bad at now but could be good at in the near future; hence the gradual unwinding of tariffs by past governments. But that's mostly finished now, and in the long term there is no good reason to keep tariffs.
Posted by Aidan, Monday, 12 January 2015 2:50:52 PM
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