Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Assistant Treasurer and Revenue) Share this | Hansard source

No, not the son. But he is a man with great experience in these matters, and I look forward to him nominating a vehicle of 4.5 tonnes or heavier that runs on petrol. If both members fail to do so then we will be giving the minister an opportunity, when he provides a summary to the bill, to do so himself.

But I will return to the detail of the bill. Coal is listed in the excise tariff and has attracted a free rate of duty since 1992. The inclusion of coal in the excise tariff means that it is an excisable product, and coal producers are therefore required to be licensed as excise manufacturers. Coal is omitted from the excise tariff rather than included at the free rate of excise duty, as in the existing law, the Coal Excise Act—which contains licensing and other requirements. It is repealed, as it is no longer considered necessary to impose these requirements on activities involving coal.

The Spirits Act, which provides for controls over the manufacture of spirits, including brandy, whisky and rum, and methylated spirits, is repealed on the basis that most of the provisions it contains are adequately covered in the Excise Act or are no longer relevant to the effective management of the alcohol taxation regime. The Distillation Act, which provides controls on the distillation of spirits, including stills, distilleries, licences and fortification of Australian wine, is also repealed. I understand Senator Murray has sought to refer some matters relating to alcohol to the Senate Economics Legislation Committee. I make the point, having learned he has done so, that the government made a commitment that there would not be any changes to alcohol taxes in this country on a piecemeal basis, that any change or review of alcohol taxes in this country would be done in a holistic way by looking at every sector in the industry—that is, wine, beer and spirits.

I was surprised at the changes in the budget. Although I welcome the improvements to the exemptions on the wine equalisation tax, those are changes in isolation to alcohol tax in this country. I am not surprised that there are some who are now interested in further inquiring into the potential to make further changes to alcohol taxes in this country. I am sure there is not a member of this place who would disagree that it is a bit of a mess and that any Senate process could prove fruitful in teasing out whether the relativities are right and whether the policy is set correctly in social terms. Is it producing the best health and social outcomes? I hope that representatives from all subsectors of the industry—again, wine, beer and spirits—and others who might have an interest take the opportunity to appear before that inquiry and to make their various points.

I now turn to the Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006. This bill amends the Customs Act 1901 to (1) strengthen customs control over certain imported goods that are used in the manufacture of excisable goods; (2) repeal the customs related provisions of the fuel penalty surcharge legislation; and (3) replicate certain provisions of the Spirits Act 1906, which again are to be repealed. I also turn to the Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006. The purpose of the bill is to amend the Customs Tariff Act 1995 to implement changes that are complementary to amendments contained in the Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006. These measures are designed to, as the government argues, strengthen customs control over certain goods that are used in excise manufacture and to ensure that excise equivalent goods are subject to the same duty when imported as they would be under the Excise Tariff Act 1921—that is, the same products when manufactured or produced in Australia.

This cognate debate is about putting in place the machinery, if you like, to lay down the pathway for the Fuel Tax Bill. As I said, there are a number of other changes of well. Some go to avgas and some potentially go to alcohol taxes. The excise rates are not being dealt with in this cognate debate. What we are dealing with is the tidying up of the framework. We need four bills, on a constitutional basis, because we are dealing with excises on domestically produced products, we are dealing with the way in which we apply taxes to imported goods and we are amending two excise acts—one, if you like, that lays down the framework of our excise system and another, a later act of 1921, which deals with the excise rates. It is the same with customs. We are dealing with the earlier act, which lays down the framework, and the second bill, which deals with the detail of the rates et cetera. These bills are very important, but the most important bill is the Fuel Tax Bill. That is the one we should have been debating first. It is the one we were going to debate first, according to the government’s own program of earlier in the week, but we are not debating it today.

I have three quick questions for the Minister for Revenue and Assistant Treasurer. I hope he can respond to them. These bills reduce the customs duty and excise for avgas and avtur by nine per cent. The minister has indicated in his EM to these bills that the reduction is part of a change to the cost recovery regime for aviation services. However, it is not clear exactly how this reduction in the excise and customs duty operates as part of these new arrangements. I now ask the minister: what is the cost to revenue of reducing excise and customs duty rates for aviation gas and aviation turbine fuel? Also, Labor has been informed that the change to the definition of biodiesel in schedule 1, item 2, of the Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006 is significant. The definition of biodiesel is now to be amended so that biodiesel includes liquid fuels manufactured by chemically altering vegetable oils or animal fats. I ask the minister those two questions. I will take the opportunity to raise my third question in the consideration in detail stage. (Time expired)

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