Home topics news Credit: Christian Dubovan News News $30 mil saved in compliance costs for SMEs Yajush Gupta March 12, 2024 Australia is poised for a significant tariff reform set to roll out on July 1st this year. Nearly 500 burdensome tariffs will be eliminated, spanning a diverse range of imported goods such as toothbrushes, hand tools, fridges, dishwashers, clothing, and menstrual and sanitary products. With the government identifying $2.2 billion worth of imports, businesses are projected to save over $3 million in reduced tariffs and nearly $30 million annually in compliance costs. Considering a 4% foreign exchange (FX) cost, the FX expenses for the listed transactions amount to over $91 million, surpassing compliance costs more than threefold. This sweeping initiative marks the most substantial unilateral tariff reform in over two decades. The primary aim of these reforms is to alleviate compliance costs, streamline bureaucratic processes, facilitate smoother business operations, and ultimately bolster productivity. Despite these tariffs not directly protecting Australian workers and businesses, they have necessitated navigating convoluted red tape and bearing compliance costs, which the reforms seek to alleviate. “It’s good to see the government move to make imports more affordable for Australian consumers and businesses, but the elephant in the room is the high cost of the foreign exchange to make these overseas purchases. If the Treasurer acted to make the market for FX payments more transparent and competitive then we wouldn’t just be saving millions, but billions,” said Jack Pinczewski, APAC Government Relations Lead at Wise.