George Christensen (Dawson, National Party) Share this | Hansard source

I rise to speak on the Excise Tariff Amendment (Ethanol and Biodiesel) Bill 2015 and the Energy Grants and Other Legislation Amendment (Ethanol and Biodiesel) Bill 2015. The first of these bills will reduce the rates of excise for domestically manufactured biodiesel and ethanol to zero for a single year, and that starts next month. Excise rates on these fuels will then rise each year incrementally up until 1 July 2020. At that point the excise rate for ethanol will be about 33 per cent, or one-third, of the rate for petrol. Similarly, at that point the rate for biodiesel will be about half the rate for normal diesel.

At the same time these bills remove grants for biodiesel and renewable fuels such as ethanol. Firstly, I want to make an important point about ethanol as a fuel and how the government treats it. There are people who believe that rebates are some form of welfare. Well I do not. I do not believe an ethanol rebate is giving away free money. A rebate is about treating ethanol as a different type of fuel and taxing it differently. When the ethanol rebate was first introduced it was not to come up for review until 2021, because the government recognised that it would take the industry that length of time to become established. We have gone and had a look at it. While the changes we have made get rid of the rebate I believe they also provide a level of certainty for the industry. They provide a clear excise regime extending into the future.

It was always envisaged, even when the Howard government brought in the rebate model, that 12½c a litre would be the excise rate that would eventually apply to ethanol. We have got that pathway to the 12½c a litre excise rate. I know from discussions I have had with people in the biofuels sector, particularly the Biofuels Association of Australia and other players, such as Dick Honan with Manildra, that they are very comfortable with this path forward because it does provide certainty and surety and their product is taxed at a lower rate than petrol.

It is true to say that there is only a small ethanol industry at the moment. With the industry as it is right now we are not seeing the benefits flow through to farmers, particularly cane farmers when the ethanol is produced from sugar cane. We could see that happen as a result of the framework in this legislation setting out a long-term sustainable plan for the industry but it would have to be accompanied by measures that the state governments pick up and run with.

The Nationals, the party which I am a member of in this parliament, have called for a 10 per cent mandate to be rolled out nationally this year, 2015, with the rollout of E20 fuels for consideration by 2020. They are ambitious targets. We are in the middle of 2015 and we do not have a nationwide mandate. That would have to be picked up by state governments. Slowly that is happening. New South Wales and Queensland are talking about it. We need to show leadership on this issue.

I question the wisdom and the values of some who were against ethanol and put forward the idea of immediately substantially raising the taxation levels on this Australian industry and increasing the cost of living by pushing up the price of the cheapest fuel alternative currently on offer at thousands of service stations. This bill does not do that, but there were pundits saying we should get rid of the subsidies and tax it at the same price as other fuel.

As the minister pointed out in his second reading speech, these changes were very much needed to get the budget back into surplus. We have to acknowledge that Labor and the Greens left the budget in a parlous state and that action is necessary in reducing government expenditure. I feel for the Greens and their current dilemma on this issue—

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