import levy cuts: how much will we lose?

How much will we lose?

Import levies total $14.6 million of the current budget or about one fifth of all government receipts (schedule 7 ROBOC 2005-06).

It was not clear exactly from the supplementary budget or MFEM’s invitation to submit comment how much of this would disappear if import levy reforms result in cuts to levies. However, import figures for 2004, when we imported $114 million, show the following percentages:

Minerals, Fuels etc 8%
Machines, transport and equipment 23%
Beverages & Tobacco 4%

This gives a rough figure of about 35% of all imports that would remain under levies, meaning a reduction of about 65% in government income from import levies. In the current financial year, this equates to levy income shrinking to about $5.1 million.

In other words, roughly two thirds of $14.6 million or about $9.5 million might disappear from government revenues, about one seventh of total revenues, not counting aid.

This is a significant impact on the sovereign affairs of the nation and its ability to govern itself. Can we afford these cuts?

It is difficult to say for sure because government frequently, as in this case, goes outside its own legislative processes. In doing so, it avoids public examination. The public, knowing little, can contribute less.

Import levy cuts: process gaps
Import levy cuts: will it work?
Import levy cuts: governance gaps
Import levy cuts: short term suggestions
Import levy cuts: long term suggestions
Import levy cuts: conclusion
Import levy cuts: whole submission