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

I move:

That this bill be now read a second time.

The Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006 contains amendments to the Customs Tariff Act 1995 (the customs tariff).

These amendments implement changes that are complementary to amendments contained in the Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006, and are part of a package of bills dealing with fuel tax and excise reform.

Schedule 1 of the bill contains amendments to the customs tariff to decrease the customs duty applied to aviation turbine fuel (kerosene) and aviation gasoline. These measures were previously tabled in the House of Representatives in Customs Tariff Proposal No. 5 of 2005 and took effect from 1 November 2005. They now require incorporation in the Customs Tariff Act. Complementary changes are being made to the Excise Tariff Act 1921 through the Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006.

Schedule 2 of the bill contains amendments to the Customs Tariff Act 1995 to complement amendments to the Customs Act 1901 and to reflect amendments to the Excise Tariff Act 1921.

In brief, the amendments to the Customs Tariff Act impose a uniform rate of customs duty of 38.143c per litre on most fuel products. The amendments also remove a number of redundant provisions from the customs tariff, including the duty differentials for petroleum products based on container size, sulphur content, and whether a petroleum product contains a fuel marker.

Schedule 2 of the bill also contains a number of related consequential amendments to the customs tariff to ensure that it aligns with the excise tariff. This includes aligning the rate of snuff with the ordinary tobacco rate.

Schedule 2 of the bill also includes some technical changes that are of a minor or machinery nature. These include:

• a change to the definition of mead to ensure greater consistency with the wine equalisation tax legislation;
• a change of classification for biodiesel to ensure conformity with a World Customs Organisation classification decision; and
• amendments to definitions of beer to align with the excise tariff definition and clarify when the different rates of customs duty apply for different types of beer.

Finally, schedule 2 of the bill incorporates a range of measures designed to strengthen customs control over certain goods that are used in excise manufacture. These include the repeal of concessional items 44 and 67 of schedule 4 to the customs tariff. These items currently provide the mechanism for excise manufacturers that use excise equivalent goods—petrol, alcohol and tobacco—to remit their customs duty liabilities, except for ad valorem duty on certain spirit and fuel products.

The bill will also attach a rate of customs duty of $290.74 per kilogram to tobacco leaf (not stemmed or stripped) to ensure that if any leaf is not accounted for before excise manufacture, Customs has the legislative ability to recover the appropriate duties. The Australian Taxation Office already has that ability through section 105 of the Excise Act 1921.

Debate (on motion by Mr Griffin) adjourned.