Chris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I move:

That the amendments be agreed to.

These amendments seek to amend the expiry dates of excise licences. The government is amending the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 to change the date on which excise licences will expire. The bill currently provides that excise licences will have a common period of validity of three years and a common expiry date of 31 March. The initial period for a new licence will be two years after 31 March, following the initial approval—so it could be for a period of less than three years—and all existing licences will expire on 31 March 2007.

The amendment is that the validity period will remain three years with a common expiry date of 31 September. The initial period for a new licence will be two years after 30 September, following the initial approval—so it could be for a period of less than three years—and all existing licences will expire on 30 September 2006. This will provide an earlier opportunity for the Australian Taxation Office to ensure that all parties in the excise system that are licensed can be formally assessed against the legislative criteria for holding such a licence, which is designed to encourage compliance and to protect revenue. This change ensures that the renewal process occurs during a period of lower activity for certain licence holders, particularly tobacco growers.

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

These amendments by way of a Senate message are necessary because the bills to which they relate impose taxation within the meaning of section 53 of the Constitution. The Senate may not amend a bill imposing taxation. It has done so and, therefore, returned the bill to the House for its consent. This shows that the government has, once again, put up a bill which is faulty and which, in turn, has required amendment by the government and, in this case, subsequent concurrence of the House.

The original bill was designed to make amendments to the Excise Tariff Act 1921 to give effect to the government’s changes in the fuel tax bill. Members of the House will remember that that fuel tax bill initiated a number of changes, including a new fuel tax regime to replace what were the Energy Grants (Credits) Scheme and the Diesel Fuel Rebate Scheme. Notably, it also proposed to abolish the Fuel Sales Grants Scheme, which was designed to be compensation for the impact of the GST on people living in outer metropolitan, regional, rural and remote areas.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

It is discrimination; there is no doubt.

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

The member for New England is absolutely correct: there is no doubt. The jury is back in, and the conclusion is firm: the GST is having a compounding effect on those who live outside our capital cities. As a result, those people—more particularly those living in rural, regional and remote Australia—are having a greater burden of taxation imposed upon them than are their city cousins when they fill up their cars at the petrol pump. So it is very important to note that the bill makes that change at a time when fuel prices are at a record high and imposing significant burdens on Australian individuals and Australian families.

It is also worth noting that the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 puts in place new arrangements for the way in which business claims back fuel tax for which it is not liable. Up to now, businesses have been able to claim back immediately those fuel taxes from the Australian Taxation Office. The government proposed that, in future, businesses would need to make the claim on their business activity statement. Given that most businesses put in business activity statements on a quarterly basis, the government is imposing a significant cash flow problem on business. Most businesses will be carrying that taxation burden for three months and, in some cases, they will be carrying it for up to 12 months.

Following pressure from the opposition and a Senate committee, a reference for which was given by the opposition, the government did a backflip—or at least a half-pike. It announced that a period of grace would be extended to businesses caught up in the new scheme. The effect is that the new arrangements will not come into effect for two years for those businesses that choose to stay under the current arrangements.

It is very notable that, during the second reading debate on the fuel tax bill, I foreshadowed that I would be moving an amendment in this place to put in place that grace period ad infinitum—in other words, to allow business to choose which system they wanted to use on a permanent basis. Disgracefully and disappointingly, the government chose to gag that debate and, in doing so, denied me the opportunity to move that amendment. It therefore denied me a democratic right to move that amendment and it denied the people I represent in this place the right to have that amendment considered by this House. That is a disgrace, and the government should reflect on that point. We will continue to campaign on that very significant burden being imposed on Australian business, particularly small and medium businesses.

When this bill was in the Senate, the Democrats moved a reference to the Senate Economics Legislation Committee to look at some alcohol taxation arrangements. Labor noted that that reference was probably outside the scope of the bill, but the committee process went forward in any case. It is interesting to note that there is a unanimous report from that committee, opening up the whole question of alcohol taxes in this country. It asks the government to review them and to consider whether there are some better options for a range of economic, social and health issues—notably, moving to a volumetric system and removing some of the disparities between alcohol taxes as they rest upon particular alcoholic drinks. I expect the parliamentary secretary, some time during this debate, to respond to some of those issues raised by the Senate committee. (Time expired)

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

Labor has agreed to the urgent passage of these amendments to the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006, despite the fact that we have been gagged on just about every piece of legislation in the last couple of weeks. Labor is taking the government at its word that the amendments have been undertaken in consultation with the industry, and it will continue to cooperate with bringing forward the new licensing provisions. Interestingly, the same level of agreement may not flow as easily from the other side of the chamber, particularly when people raise the issue of ethanol. It seems that every day there is another backbench revolt and, unfortunately, this is now starting to impact on the issue of fuel.

The Prime Minister is still resisting Labor’s calls to grant the ACCC the powers it needs to scrutinise petrol prices. He is not taking the concerns of motorists seriously and he is not taking the concerns of hardworking families seriously. The Prime Minister is telling the Howard battlers out there that they should try walking around if they cannot afford to fill their cars with petrol. It is interesting that this debate should occur today following an article in the Herald Sun yesterday, which I trust most people would have seen by now, in which the Prime Minister took it upon himself to claim that he had already acted on petrol prices. He had the audacity to tell motorists that reductions in federal excise saved motorists, on average, about $10 each time they filled up their car. I do not know about you, Mr Speaker, but I do not believe that every time motorists in my electorate fill up their cars they are thinking that this Prime Minister has done great things for them by relieving the burden of higher petrol prices. It just does not seem to resonate out there.

To try and sell this to the Australian public has to be considered the ultimate spin over substance. This government has not acted on higher petrol prices and has refused to even take the smallest steps to do so. It continues to reject calls for the ACCC to monitor petrol prices, as provided for under part VIIA of section 95G(6) of the Trade Practices Act. What is worse is that the government tries to tell people that petrol prices are really the states’ problem. The government has been out there suggesting that it is the fault of state governments because they receive the GST. The GST is a Commonwealth tax—and no-one should believe otherwise—introduced by the Prime Minister himself and his government now stands as being the highest taxing government in our history. It is a Commonwealth tax. It was legislated in the Australian parliament, it is collected by the Commonwealth and distributed by the Commonwealth. There is no doubt that the GST is a Commonwealth tax and for the Prime Minister to blame the problems of higher petrol prices on the states because of the GST is misleading in the extreme.

Getting the ACCC to have a cursory look at petrol prices over the last long weekend might have been another example of tokenism, or at least spin, by this government, but it was patronising to all those motorists who are trying to fill up their car and not receiving much change from $100 every time they do so. Petrol prices are impacting every day on local families and they are certainly impacting on businesses. Petrol prices are impacting on our communities, as shown in the recent ACNielsen survey. The data also indicated that small business throughout the country is being grossly affected by it. It also made the point that it is deleterious to the tourism industry as a whole. The government needs to cut the spin and start coming up with solutions. A good first step would be to have the ACCC continually monitor petrol prices and not be used as a token method of overcoming the short-term problems on one weekend in the year.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I support the amendments that have come back from the Senate on the Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006, but I would like to make some comments on the broader energy debate that has been truncated not only on the fuel excise arrangements but on the energy debate that was before the House yesterday.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

The member for New England might do that, but it must also be relevant to the motion before the chair.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

A few weeks ago the Prime Minister called for a debate on Australia’s future energy needs and the nuclear issue was mentioned. A number of bills have been before this House, of which this amended legislation is part, which relate to future energy needs and how the excise and transitional arrangements for biofuels, ethanol, biodiesel et cetera will apply. But for some unfortunate reason the government has decided not to have a debate on Australia’s future energy needs and has used the guillotine to truncate some of those debates.

I would like to mention a few issues concerning fuel taxation. The current round of fuel bills that have gone through the House have included, as the shadow minister mentioned a moment ago, a proposal to remove the Fuel Sales Grants Scheme. This means that country people will be discriminated against in relation to the amount of GST that they pay at the bowser. It has amounted to about $270 million a year since 2000 and was described recently by my colleague the member for Gwydir on ABC radio in Tamworth as an inefficient scheme and a scheme that was not equalising the impact of GST on country motorists. If that was the case, why has this government shelled out $270 million over six years to the fuel companies? If the Deputy Prime Minister at the time recognised that it was an inefficient scheme that was not passing on the benefits to country motorists because of the disparity between country and city prices, why wasn’t something done earlier? Why was this massive subsidy of about $1.6 billion given to the fuel industry over those years?

Ethanol and biodiesel have been mentioned in these debates over the last few weeks. In the United States of America by the end of this year something like 20 per cent of the US corn crop will be utilised for ethanol. For those who do not know, that equates to about 60 million tonnes of corn. To put that into some perspective, Australia is one of the major trading nations in wheat—ethanol can be produced from corn, wheat, sorghum and other materials. We export 16 million tonnes of wheat, so it is not hard to see the impact a move towards ethanol or biodiesel would have on the farming community of regional Australia and obviously on the price of wheat.

For instance, in Europe at the moment canola is used for biodiesel, and that is having an extraordinary impact on the world price of canola. And this government does absolutely nothing other than to put in place this legislation. Last week the fuel excise platform bills were introduced to allow for domestic encouragement incentives for domestic ethanol to be removed over time so that imported ethanol would come into this country, which sends a message to investors in this country not to invest in biofuels. I think there are a number of issues in this whole area of energy for our future that really do need greater elaboration in this place. Yesterday’s debate was again truncated. Many members of this House intended to speak on that legislation and raise issues relating to solar energy and the use of bioenergies for electricity. All those issues have been bypassed by this government and I think that is an absolute disgrace at this time in our nation’s history. (Time expired)

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

Before my time expired during the second reading debate, I was talking about the Senate Economics Legislation Committee recommendations on the alcohol taxation regime. I made the point that Labor were of the view that the recommendations and, in fact, the reference were probably outside the scope of the bill, but we certainly did not want to deny the committee the opportunity to consider those aspects of the bill and we certainly did not want to stand in the way of the Australian Democrats in their attempt to have those matters considered.

I was making the point that, while the opposition does not have any particular position on alcohol taxes, throughout the course of the inquiry some important points were made about the health impacts of the current taxation regime, the way the ad valorem system does not necessarily deliver the best health and social outcomes and whether there is merit in applying a volumetric tax to alcohols generally. This would be highly disruptive, I have to say, for the industry, which is pretty much settled and lives with the current alcohol taxation regimes. In his decision to have an inquiry into the uranium industry and how far Australia should become involved in the nuclear cycle, the Prime Minister made the point that that does not mean he has any particular position on uranium, particularly enrichment and power generation, but that there is merit in having these inquiries.

The Senate Economics Legislation Committee has called upon the government to look at whether alcohol taxes are economically efficient and deliver the best social and health outcomes, and this should be responded to by the government. When he approaches the dispatch box I expect the Parliamentary Secretary to the Treasurer to give a short response on behalf of the government and indicate whether the government is likely to take up the Senate Economics Legislation Committee’s challenge to look at that taxation regime as it applies to alcohol to determine whether we are getting the best economic, social and health outcomes under the current regime.

I made the point during the second reading debate on this bill that certain sections of the alcohol industry were promised that there would not be any changes in isolation to the taxation regime as it applies to alcohol—in other words, it would be dealing with the industry on the whole. Some sections of the industry were quite upset that, as part of the budget, the government made some changes to the wine equalisation tax rebate, which the opposition welcomed very warmly. But that was an alcohol tax change made in isolation, and, of course, it has caused some other parts of the industry to become agitated and push for changes, particularly to ready-to-mix drinks and how excise treats them differently from some beer drinks which share the same alcohol volume but to which different tax rates apply.

Given the very public discussion about ethanol during the debate on the fuel tax bill and the consequential bills, I also expect the parliamentary secretary will pass some comment on that issue when he summarises this debate. It is well known that members of the government backbench—and indeed some members of the opposition backbench—are still pushing for some more generous treatment of the ethanol industry. I make the point that this industry still enjoys tax-free status, at least until 2011. I think the original start-up date was 2008. It still enjoys total import protection and, of course, is the recipient of a number of capital grants.

That is a very significant leg-up for the industry, but each time the government has come forward with these concessions, the opposition has backed them willingly. If the government is proposing to put forward further concessions to the ethanol industry, the opposition will be happy to hear them and consider them on their merits. So I hope the parliamentary secretary indicates to the House whether the government is reconsidering the taxation regime as it applies to ethanol. He should indicate to the House and to his own backbench whether the government is proposing any further changes. I note that there are no government backbenchers in the chamber at present. That is of great disappointment to me. They have lots to say about ethanol outside this place and today was a great opportunity for them to come into the House and put their case for further concessions for ethanol—we would have been happy to have that debate. Maybe the parliamentary secretary can give us some indication of the government’s thinking in this regard.

Chris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I thank the member for Hunter, the member for Werriwa and the member for New England for their contributions this morning. We have heard that the member for Hunter has a lot of hopes for me this morning—he hopes this and he hopes that. And he is disappointed with lots of things. I want to reassure the member for Hunter that satisfying him and all of his hopes is obviously a key driver for us on this side; we are always striving to satisfy his hopes and wishes!

The member for Hunter and the member for Werriwa raised the Senate Economics Legislation Committee report in relation to alcohol tax. I have to say that I am a little bit confused about this, because I had been advised that Labor actually voted with the government to reject amendments moved by Senator Murray in relation to alcohol taxation. So I am a little bit confused as to where the member for Hunter might be coming from.

The other thing to bear in mind is that this morning we are here to talk about amendments to the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006. When the member for Hunter and the member for New England first spoke they talked about the Fuel Sales Grants Scheme, they talked about the two-year transitional period and they talked about the use of BAS for fuel tax credits. The problem is that all those aspects relate to a completely different bill. Those aspects do not relate to the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and they do not relate to the amendment that we are debating this morning. So the member for Hunter and the member for New England have the wrong bill in mind. All of the issues that they raise relate to the Fuel Tax Bill 2006, which has already passed the House of Representatives. So I am not sure where the member for Hunter is coming from.

The bill before us relates to things like clarifying the arrangements for using imported inputs in the manufacture of excisable goods; streamlining and clarifying the current arrangements for concessional spirits; strengthening controls over tobacco leaf, which has a high potential for excise liability; and acts against the beer excise revenue avoidance practice. This bill seeks to make improvements to excise licensing provisions to make renewal periods consistent and to allow better capacity for licensing to be used as a compliance tool to protect excise revenue. This bill is all about amending certain provisions of the Excise Act. It is about repealing a number of other acts. It also repeals a number of fuel related acts that are no longer required because of the fuel tax reforms.

So that is the bill that we are talking about this morning. The amendment that I moved this morning, which I think is a commonsense amendment, actually relates to that bill. The issues that the member for Hunter and the member for New England, and to a certain extent the member for Werriwa, have raised are completely irrelevant to this particular bill and this particular amendment.

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

You did provoke me, Mr Parliamentary Secretary. Can I point out to the parliamentary secretary, for his benefit and the benefit of the House, that this bill amends the Excise Tariff Act 1921 to implement certain elements of the government’s fuel tax reforms. So this is an important bill that gives effect to those fuel tax reforms. On that basis it is in order and appropriate for members on this side of the House to raise issues as contained in the fuel tax bills. I know that the government does not like us speaking about them, because they are very embarrassed publicly about the impact on small to medium businesses in particular. I know they are very embarrassed about the impact of the abolition of the Fuel Sales Grants Scheme on rural and regional motorists—indeed, on some motorists living in outer-metropolitan areas of capital cities. I know they are embarrassed about that, and do not want to have the debate. We guarantee them that we will keep having the debate and alerting the general public to the fact that, at a time of record high petrol prices, this government is now removing, abolishing, the very compensation that was put in place to offset the compounding impact of the GST in outer-metropolitan areas and in rural, regional and remote Australia.

But what really disappoints me about the parliamentary secretary’s contribution is that he failed to take up my challenge to give the House some guidance, some indication, about where the government is going, firstly, on ethanol—whether we can expect more proposals to change the taxation regime as it applies to ethanol and biofuels generally, whether we can expect proposals to change the Customs duty to delay the implementation of some import competition on the domestic ethanol industry and whether the government has any new initiatives to ensure that the major oil companies themselves do more to produce ethanol rather than remaining so reliant upon one particular company, which remains a very dominant force in the ethanol market in this country.

Secondly, it disappoints me that I requested from the parliamentary secretary some response from the government to the recommendation of the Senate Economics Legislation Committee on alcohol taxes. They have called for a public debate in this country on those taxes. Again, we do not come to that debate with any particular issue or concern, but it is a debate worth having, particularly in the context of what is happening in the Northern Territory with the difficulties in some Aboriginal communities and whether some changes to alcohol tax arrangements could address some of those very significant health and social issues. So I would have thought, given the strength of the Senate Economics Legislation Committee report, and its somewhat unanimous nature, that the government might have taken the opportunity to indicate to the House whether it does intend to take up that recommendation and proceed with a review of how the taxation regime applies to alcohol in this country.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

I was listening with some interest to the parliamentary secretary making some points on people talking on the wrong legislation. I would have thought that the parliamentary secretary would have been well aware that the people who did want to make contributions yesterday on renewable electricity, the people who wanted to move amendments last week to some of the consequential bills to this piece of legislation that has come back from the Senate, have not been able to make those contributions because the government has refused those people the opportunity. So to come in here today and attack members of this parliament for wanting to make a contribution to the energy debate—the very debate that the leader of your party has said we should have, but does not seem to want to enable people in this parliament to participate in—is an absolute disgrace.

This legislation, as I understand it, is about the expiry dates for excise licences. Maybe the parliamentary secretary would like to explain to country motorists why the Fuel Sales Grant Scheme has expired and why those people will now have to pay a greater price at the bowser for petrol than their city cousins. Why will they have to pay 1c to 3c a litre more for their fuel than they do presently? Why has the government initiated legislation in this parliament which will lead quite directly to an increase in price for those people who live in country areas who do not have the benefits of competition between the fuel companies and who do not have the benefits of the dumping regime that the fuel companies have in the city areas?

The parliamentary secretary may take the time to explain to those people why they will have to pay more. Why, for one of the first times in the history of this nation, is the government—particularly a coalition government—putting in place policy that will discriminate against country people? The parliamentary secretary may also like to explain why the National Party and that branch of the National Party, the National Farmers Federation, are participating in this farce, where they are endorsing an increase in petrol prices for country people.

The parliamentary secretary may also like to let the people of Australia know, particularly country people, why the cash flow arrangements that will occur with the transfer of the rebate—what was originally called the diesel rebate—will now come under due consideration through the BAS. I understand we have a deferment of two years before that guillotine comes down on the farming community of Australia. The parliamentary secretary may take the time to explain why that is good for farmers and why farmers, who under the reckoning of anybody in this place do not know owe that tax, will have to pay that tax at the point of purchase and then wait three months or longer for the receipt of that money from the government. Why will that have to come into place?

I note the member for Hunter made mention of the fact that there are many people on the government side who talk about biofuels, ethanol, biodiesel and a whole range of other additives that could be used for a more environmental and healthy fuel source, but they are not here today and they were not here last week. The ones that were here last week—and the member for Gilmore is one that I have great respect for—made some very important points, including the very points that I made about the fuel excise legislation last week, and then they voted for it in this parliament. I think it is about time that the country members on the government benches start to stand up for the blubberings that they carry on with outside this parliament.

The parliamentary secretary may like to explain a few of those issues in his reply. Why are the BAS arrangements required? Why the Fuel Sales Grant Scheme has expired and discrimination against country motorists is required? Why is the government putting in place a scheme that will cause country motorists to pay more at the bowser? He might like to explain why there are no participants, why he has not mentioned the biofuels debate and why the broader debate on energy needs for Australia is being completely ignored by this government. (Time expired)

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

The chair indicates that the onerous duty of the chair is to be the arbiter of what is relevant in debates and indicates that the chair believes that there has been some leniency this morning, and this is always dependent upon the atmospherics and the karma of the chamber. I thank the members for their cooperation. The question is that the amendments be agreed to.

Question agreed to.