Australian investors will get a first crack in 2018 as the Federal Government announces a range of new policies aimed at reducing the reliance on overseas companies for the supply of gems and gemstones.
Key points:The Government is targeting foreign diamond dealers to reduce their reliance on third parties, reducing tariffs and reducing import dutiesThe measures include a new tax on imports of gems from third parties and a freeze on new imports for five yearsThe move comes after a crackdown on Chinese companies in Australia, including the country’s largest diamond miner.
The Government said the measures were designed to reduce the reliance of foreign diamond companies on third-party suppliers, reduce their import duties and reduce the number of imported gems.
“It is the Government’s objective to reduce reliance on foreign diamond suppliers by eliminating a large amount of trade, and we will continue to take the necessary steps to do so,” Treasurer Scott Morrison said.
“We will ensure that any Australian taxpayer can now buy gemstones directly from a reputable Australian gem supplier.”
In 2017, the Government introduced an import duty of up to 35 per cent on imported gems from Chinese companies, while it imposed a 35 per per cent import duty on imported stones from Chinese mines.
However, those measures have been challenged by Australian Gem Brokers Australia, who said the current policy did not go far enough and was not enough.
“The current tax structure does not take into account the economic impact on third party suppliers who rely on the domestic supply chain to ensure that their suppliers are able to meet their financial obligations,” Mr Morrison said in a statement.
“Import duties and tariffs are set by international standards, and are not determined by Australia.
These policies will continue, however, to be applied to third party supplies.”
The new tax would apply to new imports of gemstones from third-parties for the first time.
It would apply in all importable imports from the US, Canada, France, Japan, South Korea, the European Union and Germany.
“There will be a 25 per cent reduction in import duty from the beginning of 2018,” Mr Morrrison said.
While the Government said it was looking at other measures, including a levy on companies importing domestic and imported diamonds, it did not give details.
The Government also announced a new import duty tax of up 25 per of a new domestic import, while a 30 per cent tariff would be imposed on imported domestic diamonds for the next five years.
Mr Morrison said the new policy would help ensure that Australian consumers could buy gems from Australian suppliers and keep them competitive with foreign competitors.
“This is the first step in a comprehensive policy to reduce third-country diamonds, gemstones and other precious stones from being traded in Australia,” he said.