DTI slaps safeguard duty on cars


Newly assembled Toyota Vios sedans are seen at a stockyard of the Toyota Philippines manufacturing plant in Sta Rosa, Laguna, Aug. 11, 2014. — REUTERS/ERIK DE CASTRO

By Jenina P. Ibañez, Reporter

THE PHILIPPINES will slap provisional safeguard duties on imported cars, after an investigation by the Trade department showed the surge in imports has hurt the domestic auto manufacturing industry.

In a statement, the Department of Trade and Industry (DTI) said it will impose a provisional duty in the form of a cash bond of P70,000 per imported passenger car unit and P110,000 per light commercial vehicle unit. This will be in effect for 200 days from the issuance of an order by the Customs commissioner, and while the Tariff Commission conducts its own investigation.

“The provisional safeguard measures will provide a breathing space to the domestic industry which has been facing a surge in importation of competing brands. To clarify, importation is not being banned, and consumers will still have the options to choose, but imported vehicle models covered by the rule shall have safeguard import duties,” Trade Secretary Ramon M. Lopez said.

“With that being said, it will also facilitate the structural adjustment of the local industry to be more cost efficient and technologically advanced,” he added.

The DTI formally launched its investigation in February 2020 after the labor group Philippine Metalworkers Association (PMA) flagged a possible link between the surge in automotive imports and a decline in employment in the domestic industry.

Republic Act 8800, or the Safeguard Measures Act, authorizes the government to impose temporary tariffs after a determination that a domestic sector has been substantially harmed by a surge in imports.

The department said in a statement on Monday that delaying the imposition of the measure would cause “damage to the industry which would be difficult to repair.”

Based on its preliminary investigation, the DTI found that imported passenger cars went up by an average of 35% from 2014 to 2018. Imports exceeded domestic production by 349% in 2018 compared with 295% four years earlier.

Imports of light commercial vehicles jumped by 200% in 2018 compared with 2014. Imports exceeded domestic production by 1,364% in 2018, compared with 645% in 2015.

The Philippines does not impose tariffs on vehicle imports from Thailand and Indonesia.

The DTI said the market share of domestic passenger cars fell to a range of 22-25% during the period studied, while the market share of locally assembled light commercial vehicles contracted to 7% in 2018 from 18% in 2014.

“The domestic industry lost sales even as the market grew,” DTI said.

Mr. Lopez said safeguard duties are being imposed to protect local manufacturers and prevent car companies from leaving the Philippines.

“If we recall, the discontinuation of the production of Isuzu D-Max in July 2019 and the assembly plant closure of Honda Motors Philippines in the first quarter of 2020 affected local jobs and the Philippine economy. It may also attract vehicle manufacturers to operate in the country and create more jobs,” he said.

Meanwhile, PMA Secretary-General Rey Rasing in a phone interview on Monday said the group is hoping the DTI’s move will save jobs.

Prior to seeing the DTI safeguard rates, he had said that he hoped that there will be lower rates for companies that have been operating assembly plants in the Philippines for the long term.

“This is an incentive too,” he said in Filipino. “Those who have been investing here like Toyota, Mitsubishi, and Isuzu that have assembly plants here can be supported especially now that there is a pandemic.”

Industry groups have pushed back against safeguard duties, with the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) saying this would limit the industry’s recovery from the effects of the pandemic.

The Association of Vehicle Importers and Distributors, Inc. (AVID) called it a “disruptive” measure, noting that the group does not believe such a move would encourage investments.

DTI’s investigation was concluded at the start of the second half of 2020, but reported its results and recommendation to the Trade Secretary in December.

The case will be sent to the Tariff Commission, which will conduct its own investigation and public hearings.

Collected duties from the provisional measure will be placed in escrow. The bond could be returned to importers if the Tariff Commission recommends its dismissal, DTI Bureau of Import Services Director Luis M. Catibayan said in a press briefing last month.

Vehicle sales plunged in 2020, amid the strict lockdown and economic slowdown. CAMPI sales fell 41.6% year on year in the first 11 months of 2020, while AVID sales plummeted 42.6% in the first 10 months.

The duties will take effect 15 days after publication in newspapers on Tuesday.








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Off duty police officer, local woman pull man from burning car Victoria


The car was travelling on Parker Road in Silvan, east of Melbourne, when it lost control on a bend at about 6.30pm yesterday.

The car hit a tree and burst into flames, trapping the driver in his seat.

An off-duty Victoria Police detective sergeant who was driving past, and a local woman who heard the crash, came to the man’s aid.

They were able to free him from the car and get him away from the flames.

The woman received burns and was taken to hospital.

The driver, a man believed to be in his 50s, was airlifted to hospital in a serious condition.

Police are investigating.



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Katy Daley-Mclean: Former England captain and women’s rugby ‘icon’ retires from international duty


F

ormer England women’s captain Katy Daley-Mclean has announced her retirement from internatonal rugby.

Fly-half Daley-Mclean led the Red Roses to World Cup glory in France in 2014 and registered 542 points in an illustrious England career spanning 13 years and 116 caps.

Only Rochelle Clark and current skipper Sarah Hunter have more international appearances to their name for England Women than the 35-year-old, who was awarded an MBE in 2014 for her services to rugby.

Daley-Mclean also helped the team to reach another World Cup Final in 2017, where they lost to New Zealand, and won no fewer than eight Six Nations Grand Slam titles, with the most recent coming in November.

She also represented Team GB in sevens action at the 2016 Olympic Games in Rio de Janeiro.

In a statement, Daley-Mclean – who became a parent 18 months ago – cited her desire to spend more time with her daughter and passion to further develop her coaching as reasons behind her decision to step down from England duty, having joined Sale Sharks as a player-coach at the start of the 2020/21 season.

“Having had time to reflect following the autumn internationals, I have decided now is the right time to retire from international rugby,” said Daley-Mclean, who has also represented Darlington Mowden Park Sharks and Loughborough Lightning during her club career.

“This has been a difficult but relatively quick decision and feels like the right time. I have been fortunate to be involved in four World Cup campaigns in my career and to win one. It has been a total privilege to be a Red Rose. I’ll be the team’s number one fan.”

England Women head coach Simon Middleton paid tribute to a rugby “icon” and “unbelievable motivator.”

“The influence she’s had on the women’s game worldwide for England has been absolutely sensational,” he said. “Katy has continually adapted and shown her versatility as a player and her technical and tactical understanding as a player to play at the level she has for so long in such a pivotal position is incredible.

“People probably forget just what a good sevens player she was. She transferred her skillset from XVs to sevens which took her all across the World Series and the Olympics. I was fortunate to be able to coach her and work with her in both formats. I’ve spoken to Katy at length and she’s evaluated what’s currently closest to her in her life.”



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Australian wine hit with another import duty in China as an offset for ‘subsidies’


China has hit Australian winemakers with another trade strike, arguing the Australian government has unfairly subsidised local vineyards.

The countervailing duty, announced on Thursday, will see another 6.3 per cent added to tariffs of between 107 per cent and 212 per cent already in force. It all but extinguishes local producers’ access to the world’s largest market.

It is the latest impost on Australian products this year after several diplomatic altercations over the origins of the coronavirus pandemic, national security measures, human rights and foreign interference legislation. Australian timber and lamb exporters had further restrictions placed on them on Wednesday, following strikes on coal, barley and beef.

China has put another duty on Australian wine. Credit:

Unlike the November tariffs, which were imposed based on a claim that Australian companies were dumping wine in the Chinese market at discount prices to undermine homegrown competition, Thursday’s duty targets government subsidies for Australian winemakers.



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‘Call of Duty’ season one update will launch December 16th


Call of Duty Black Ops Cold War launched last month and brought the shooter series to a new generation of consoles, and now its first major content update is about to arrive. While the “season one” batch of additions were scheduled to arrive on December 10th, its developers have announced they’re pushing things back to December 16th. That gives them a few more days to work out any issues on a game experience that stretches across multiple modes, platforms, titles and console generations, and — if you think it matters — means it won’t come out on the same day as Cyberpunk 2077.

As far as what players can expect to see, things remain the same as what was detailed a month ago, with XP and level up progression that syncs up across Black Ops Cold War, 2019’s Modern Warfare, and the dedicated Warzone battle royale mode. That does mean that player’s ranks in Modern Warfare and Warzone will be reset, but any prizes they’ve unlocked will still be available.



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US, UK military teams to participate in Call of Duty tournament


Washington: The day before the annual Army-Navy gridiron game, an even larger interservice rivalry will be contested on video game battlefields.

The Call of Duty Endowment Bowl on December 11 will match teams consisting of esports athletes from each branch of the US military – Army, Navy, Air Force, Marines and Space Force – as well as members of the United Kingdom’s British Army, Royal Air Force, and Royal Navy.

A gamer playing Call of Duty.Credit:Getty Images

The matches, played on the recently-released Call of Duty: Black Ops Cold War game, will broadcast live starting at on the Call of Duty YouTube and Twitch channels.

“The eight teams representing military branches in the four-hour tournament will each have two popular Call of Duty streamers on board, one serving as captain, and will be coached by a Call of Duty League professional. Well-known streamers joining the teams include Courage, LEGIQN, Huskerrs, Swagg, Espresso, Vikkstar, Tommey, C9Emz, and Spratt.



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NSW property tax: what are the proposed changes to stamp duty and how would they affect you? | Housing


The New South Wales government has announced a plan to change the way tax is paid on property in the state.

The new arrangements will give people the option to choose between the current system of paying stamp duty when buying a house, or instead paying a small annual property tax for as long as they own the house.

Here’s what you need to know about the proposed changes.

Why does the government want to make the change?

Critics believe stamp duty, which dates back to 1865, is an outdated, inefficient system which places a prohibitive cost on moving home.

For example a $1m property currently attracts stamp duty of just over $40,335, or about 4%. The reform would mean people could avoid the $40,000 impost, making them more willing to move, and thus improving productivity and boosting economic growth. Stamp duty is thought to discourage older people from downsizing, creating too much spare housing capacity.

Stamp duty is also volatile. This year’s dramatic drop in housing market activity has reduced the amount of stamp duty flowing into the state’s coffers and has highlighted the need for reform, advocates say. So the NSW government hopes the changes would give the state a much more reliable, long-term revenue stream and make it cheaper and easier for people to move home. They also want to give people the option of not paying the existing land tax, which is paid on large commercial properties and residential investment properties over a certain value. It has set out the plans in a consultation document.

Sounds reasonable, but will it actually work?

NSW has chosen the optional route because it doesn’t want people to be subject to double taxation whereby they’ve paid stamp duty but then have to pay property tax on the same house as well. But most advocates of the property tax idea say it would be better to abolish stamp duty outright. The mixed approach could create a moral hazard whereby buyers planning to live in a home for a limited period would opt to pay the tax, while those planning to stay in a house for the long-term would opt for the stamp duty. It could also create a large short-term budget shortfall if many more buyers opted for the land tax. Decades down the line, it could mean that half the homes in the state are subject to the property tax and half of them are not, calling into question whether or not the reform would be budget neutral.

“Doing it this way is the path of least resistance for the government because the political saleability of the property tax has always been a big problem,” says Brendan Coates, an economist at the Grattan Institute who wrote a paper on the need for reform in 2019. “This way, no one is being forced to pay a property tax unless they choose to. But on the flip side, the government won’t get the big benefits of the tax for years to come and it could result in a budget shortfall.”

How would the government cover a shortfall?

Advocates of the reform believe that the federal government would have to step in to cover any budget gaps if a change like this was to be attempted. The NSW treasurer, Dominic Perrottet, has indicated as much and to give greater political cover for this, he would like to see every state and territory move towards reforming stamp duty.

But despite the widely anticipated economic benefits for the commonwealth from increased productivity, the federal treasurer, Josh Frydenberg, is not in favour of the change and no doubt wary of messing with tax and the property market in the way that Labor’s Bill Shorten did at the last election.

Another way to fund the likely budget gap would be to find tax revenue from other sources, but this would create moral hazard of a different kind, especially if it came from increases in the new property tax. Lindsay David, an independent economist and founder of LF Economics, says there is a risk of homeowners being subject to increases in the rate of property tax down the line. “In a way this is protecting existing homeowners at the cost of new homeowners. There would be nothing you could do to escape property tax increases, whereas those who have paid stamp duty would not have to pay.”

What would it do to house prices?

As ever in Australia, this is the big question. Those in favour of maintaining the status quo think that it would increase prices because would-be buyers would be able to use the money they save in stamp duty to throw at sellers, thus bidding up prices. But advocates say that in the short term there wouldn’t be much change because any increase in spending power would be offset by the impact of recurrent property taxes.

However, in the long term the average price of houses would fall, especially for larger family homes, because it would make the market more efficient – for example by incentivising retirees to downsize and thereby increasing the supply of family homes. “In the long run, a better allocation of the housing stock would lead to lower prices, particularly for larger dwellings,” Coates wrote. “Overall, the average price of housing would fall a little.”



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Stamp duty vs property tax and what the proposed change could mean for you



The NSW Treasurer has proposed a massive overhaul of the way houses are taxed, with oppressive stamp duties to be potentially scrapped.

In a move heralded as one of the biggest changes to the way Australians have been taxed on property since Federation, Dominic Perrottet has unveiled an ambitious plan to replace stamp duty with an annual land tax.

“Stamp duty is a tax from a bygone era,” Mr Perrottet said.

“This will be like the Netflix of property tax.”

While the scheme is yet to be finalised, home buyers are already asking the obvious question: “will we be better off?”

Here’s what we know so far.

How would it work?

Stamp duty in NSW is approximately 4 per cent, so based on Sydney’s median house price of $1,154,406, buyers currently pay approximately $46,176 to the Government.

But under the new scheme, instead of forking out for a one-off upfront payment, home buyers could opt to pay an annual tax based on the value of their land.

Chief economist for BIS Oxford Economics, Sarah Hunter, said that would remove some significant barriers to entering the property market.

“At the moment if you’re a first home buyer, you’ve got to save up for the deposit to put down on the house and the mortgage on top of that, but you’ve also got to save up to cover the cost of the stamp duty and it’s quite a significant amount of money,” she said.

Upside Realty CEO Adam Rigby said the same was true for people already in the housing market, particularly elderly residents looking to downsize.

“When you add agent fees and stamp duty together, you can be looking at a year or two salary just to change properties — that’s very expensive for the average Australian.”

Currently first-home buyers are eligible for stamp duty concessions if the property is valued at less than $800,000 but if Mr Perrottet’s plan passes, first home buyers will instead receive a grant of up to $25,000.

The plan requires every other state to sign on and the Federal Government to compensate the switch.

Where else in the world has it been done?

Australians only have to look across the ditch to scrutinise a property market without stamp duties.

In New Zealand, the Government raises most of its revenue from GST (albeit at a rate of 15 per cent compared to 10 per cent in Australia) as well as income and corporate tax.

Brendan Coates from the Grattan Institute said Australia was an outlier compared to many other countries in relying so much on stamp duties.

“In New Zealand there is no stamp duty; in the UK stamp duty does exist but it does tend to have lower rates than in Australia; and in the US you do have some stamp duty in some states but you tend to rely on more broad-based property taxes,” he said.

Interestingly, a similar proposal has already been implemented in the Australian Capital Territory with a lengthy transition period to the new scheme now underway.

Would home buyers be better or worse off in the long run?

While economists have been pushing for stamp duty to be abolished for decades, Sarah Hunter from BIS Oxford Economics said the devil would be in the detail.

“It is hard to work out who is better or who is worse off but there will inevitably be, with this kind of change, some winners and losers when you add it up at the bottom line.”

She believes by removing stamp duty there will be less financial burden on many people and thus more movement through the housing market.

But a “phasing approach” is necessary to level the playing field, she said.

“It almost certainly won’t be the case that you if you paid stamp duty a couple of years ago you would then go straight into paying a land tax, they’ll phase it so that that doesn’t happen,” Ms Hunter said.

Brendan Coates from the Grattan Institute contends that as a whole, the community would be better off.

“The details for the individual person we just don’t know yet — the Government has signalled that they’re probably going to go down this path with a plan to consult through to March and then come up with announcements, presumably in next year’s budget,” he said.

“We don’t have all that detail yet but at a community level, this is a really important reform that would certainly make the people of NSW better off in the long run.

“This is a really positive step — it’s just about the best tax reform that any state government could adopt.”



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NSW budget: deficit to hit $16bn as treasurer unveils plan to replace stamp duty with annual property tax | New South Wales


The New South Wales government will attempt to turn around a historic $16bn budget deficit bought on by the Covid-19 pandemic by undertaking a major reform of its tax system.

Handing down his fourth budget on Tuesday, the NSW treasurer, Dominic Perrottet, outlined the devastating toll wrought by the pandemic on the state’s economy, including a $6.9bn deficit in 2019-20, expected to rise to $16bn in 2020-21.

At the height of restrictions introduced to stop the spread of the virus, Perrottet said in his budget speech, the cost to the state’s economy was estimated to be $1.4bn every week. The state’s economy contracted by 8.6% in the June quarter, the worst on record, and almost 270,000 jobs were lost between March and May. The state’s net debt is expected to peak at $104bn by June 2024.

“Sometimes big numbers like that hardly feel real,” Perrottet told parliament after releasing the budget. “But the impact they have had on our people is very real.”

The eye-watering deficit is the result of $29bn Covid-19 stimulus spending – the largest of any state – and a forecast $25bn drop in revenue over the next five years.

To arrest the decline, Perrottet said, the government would phase out stamp duty on new property purchases in favour of an annual land tax. Long flagged by the NSW government, the move could inject an extra $11bn into the state’s coffers over four years.

But it will not happen at once. Rather, the treasurer said, the government would start a public consultation process on a proposal to give homebuyers the choice to opt out of paying stamp duty in favour of an annual property tax. The change would not affect current owners who are not buying or selling property, and the exemption on stamp duty for first home buyers buying a property costing less than $1m would be replaced with a $25,000 grant.

Perrottet said the change would give the state “a realistic pathway to achieving the most important state economic reform of the last half century”.

“Stamp duty is a relic from a bygone era when you picked one career, started a family, bought a home and basically settled in for life,” he said.

“It adds tens of thousands of dollars to the cost of the biggest financial commitment most people ever make. If you want to move, change jobs, or switch careers, upsize or downsize to match your family size, stamp duty can be the spanner in the works. It is holding our economy back at a time we need to be going full throttle.”

NSW premier Gladys Berejiklian bumps elbows with treasurer Dominic Perrottet after his budget speech. Photograph: Dean Lewins/AAP

The government also unveiled a number of spending initiatives aimed at encouraging growth, including $500m on an “out and about voucher”, which will give every adult in the state $100 to spend on eating out or visiting cultural attractions in the state.

The government will also spend $812m to build 1,300 new social houses across the state. A little over half of those will be built in the Sydney metro area.

Another $120m will be spent to provide free preschool to about 44,000 under-fives, and $337m to provide tutors for school students who had their learning disrupted during the Covid-19 lockdown.

Perrottet told parliament low interest rates meant it was a “golden opportunity” for the government to spend.

“Doing nothing would inflict long-term damage on future generations, and we won’t let that happen,” he said.

“Our stimulus will be unprecedented in scale and quality – tenaciously targeted to generate jobs.”

The government also announced new spending measures on infrastructure projects, including $10.4bn over the next four years on the Metro West underground program and $9.2bn on a new metro line to the new western Sydney airport.

The new spending measures were welcomed by business groups. The executive director of the Sydney Business Chamber, Katherine O’Regan, said: “This big spending budget puts Sydney in a strong position to lead the nation’s economic recovery, with funding for big transport infrastructure projects and other job creation and investment drivers.”

But unions renewed their criticism of the government’s previously announced decision to cap wage increases of frontline workers, including nurses and paramedics, at 1.5%.



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