Peter Dutton (Dickson, Liberal Party, Minister for Revenue and Assistant Treasurer) Share this | Hansard source

In summing up debate on the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006 I thank the members who have taken part in this debate. These bills contain positive improvements to the system of providing fuel tax relief, giving effect to the government announcement of major reform in its energy white paper Securing Australia’s energy future to modernise and simplify the fuel tax system. Further, the changes will lower compliance costs, reduce tax on business and remove fuel tax for thousands of businesses and households. When the fuel tax credit system is fully implemented, fuel tax will be effectively applied only to fuel used in private vehicles and for certain other private purposes, fuel used on road in light vehicles for business purposes and aviation fuels where tax is imposed for cost recovery reasons.

In response to some of the issues considered in this debate I make the following points. The government has provided generous support for the alternative fuels industry in this country, including a $37.6 million capital grants program to support new biofuels production capacity, effective excise-free treatment until 2011, a full year phase-in of effective excise and 50 per cent discount on the energy content excise rates that would otherwise apply to these bills. I note that the member for Hunter criticised the abolition of the Fuel Sales Grants Scheme as part of his contribution. This is the height of hypocrisy, given that during the last election campaign Labor had proposed to abolish the Fuel Sales Grants Scheme from 1 January 2005. The government’s plan redirects savings from this scheme to the AusLink program to improve transport infrastructure in outer metropolitan, rural and remote areas.

I would like to take the opportunity to answer some of the questions raised by members in this debate. A number of members spoke on the time line for phasing in effective excise on biofuels. It has to be noted that these bills have no effect on the time frames for applying effective excise on biofuels. The Energy Grants (Cleaner Fuels) Scheme Act 2004 contains the arrangements for phasing in effective excise on these fuels between 2011 and 2015. Solvent packers—those who pack fuels such as kerosene, turpentine and white spirit in small containers for retail sale in hardware stores and the like—are eligible for a fuel tax credit and are also eligible to make an early claim for payment under the transitional arrangements I announced on 1 June. Where a solvent is produced by mixing fuel with other substances, the Australian Taxation Office can determine that the product is no longer a fuel. In such cases, a fuel tax credit is available to the producer. The Taxation Office has draft determinations on its website for consultation on this matter.

In relation to energy security, the government has undertaken a comprehensive review of its energy policies and approaches and has developed a long-term framework to ensure that our energy advantage is utilised for the benefit of all Australians. The government released its energy white paper Securing Australia’s energy future on 15 June 2004.

The government moved parliamentary amendments to these bills. The first clarifies claiming arrangements for taxpayers who become members of the Greenhouse Challenge Plus program and are able to claim certain fuel tax credits that were denied prior to their membership of the program. The second amendment ensures that the current definition of ‘minerals’ will be retained and activities currently eligible under the Energy Grants Credit Scheme will continue to be eligible for an energy grant and will become eligible for a fuel tax credit from 1 July 2006. I am also tabling an addendum to the explanatory memorandum revising costs in light of this change and due to the announcement in the budget not to increase the road user charge for heavy vehicles.

The final set of parliamentary amendments moved to these bills provides a two-year transitional measure to help affected businesses adjust to the new system. Eligible businesses will be able to make early claims for their fuel tax credits rather than waiting to make claims on their business activity statements. These reforms simplify the existing arrangements for providing fuel tax relief and provide this relief to thousands of businesses and households that cannot currently access these concessions. The government has decided that the transitional arrangements should apply only for a set period due to the costs and complexities that would be involved for both taxpayers and the Australian Taxation Office in maintaining two separate processes for making claims on an ongoing basis. These bills contain positive improvements to the system of providing fuel tax relief and give effect to the government announcement in its energy white paper to modernise and simplify the fuel tax system. I table the supplementary explanatory memorandum to this bill with a supplementary explanatory memorandum and an additional supplementary explanatory memorandum to the Fuel Tax (Consequential and Transitional Provisions) Bill 2006. I commend these bills to the House.

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