Federal Treasurer Jim Chalmers has announced the removal of a 5% tariff on almost 500 imported products including fridges, washing machines, sanitary products, and pyjamas.

The taxes are currently raising little revenue for the government since a series of loopholes had allowed most businesses to gain exemptions, Mr Chalmers said.

The changes are designed to free businesses from costs associated with administering the tariffs and exemptions, which are ultimately passed on to consumers.

Mr Chalmers said the government had targeted tariffs where most importers were already claiming exemptions.

They would “provide a small amount of extra help with the cost-of-living challenge”, he said, although it's likely any savings would be relatively minor.

Some of the products which will be free of import tax include:

  • washing machines
  • fridge-freezers
  • toasters
  • protective footwear
  • toothbrushes
  • menstrual products
  • chamois leather
  • fishing reels
  • ballpoint pens
  • electric blankets
  • bamboo chopsticks.

Goodbye to a "nuisance" cost

Import tariffs were historically a major federal revenue raiser, designed to protect Australian businesses from competition from overseas producers.

Tariffs were once set at well over 20% but have been progressively removed through changes in government policy and under successive free-trade agreements.  

In 2022, a Productivity Commission report labelled import tariffs “nuisance” costs raising less than 0.3% of government revenue, with more than 90% of imports entering Australia already duty-free.

Mr Chalmers said the scrapping of the taxes would be “the biggest unilateral tariff reform in at least three decades”.

The changes will take effect on 1 July with the full list of tariffs to be released in the federal budget in May.

Image by Diana Polekhina on Unsplash