House debates

Wednesday, 25 June 2014

Bills

Customs Tariff Amendment (Fuel Indexation) Bill 2014, Excise Tariff Amendment (Fuel Indexation) Bill 2014, Fuel Indexation (Road Funding) Bill 2014, Fuel Indexation (Road Funding) Special Account Bill 2014; Second Reading

4:21 pm

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

I rise to support the Customs Tariff Amendment (Fuel Indexation) Bill 2014 and associated bills, to oppose the amendment proposed by the opposition. These bills form part of a wider strategy to massively boost infrastructure spending in Australia. In particular, the focus of this package of bills is a massive increase in road infrastructure which will help boost the productivity of the Australian economy. That is vitally important because with a more productive economy it means we can, in a sustainable way, pay for all those other things that government provides like health services, education services and defence.

These bills amend the Excise Tariff Act and the Customs Tariff Act so that the rate of excise and excise equivalent customs duty applying to all fuels listed will be bi-annually indexed by reference to the consumer price index. The exception will be aviation fuel and the production of crude oil or condensate. The government has also provided that the increased revenue will be diverted to road expenditure. These measures will provide a stable and growing source of revenue to deliver the government's new road infrastructure projects.

Let us be clear: this is not so much the introduction of fuel indexation—that was done by the Hawke government in its 1983 budget. Instead, it is a reintroduction after a number of years of a hiatus. The rate of excise and excise equivalent customs duty on most fuels has not changed since the cessation of indexation in March 2001. As the Treasurer has detailed, petrol and diesel have both maintained an excise rate of 38.143c per litre since that time, with the real value of this rate having been eroded by inflation.

To give listeners a sense of this in relative terms, in the June quarter 2001, excise represented approximately 41.5 per cent of the price of unleaded petrol. Things are vastly different now. It is now worth around 25 per cent. The government has committed to the biggest increase in road expenditure in Australian history and reintroducing indexation is projected to moderately assist in funding these commitments by raising approximately $2.2 billion.

My electorate of it Eden-Monaro is receiving an early down payment on the increased roads expenditure. On 13 June the then Acting Prime Minister—that is, the Deputy Prime Minister and Minister for Infrastructure—visited Queanbeyan in my electorate. Together with the New South Wales Deputy Premier, Andrew Stoner, he announced a joint funding commitment of $50 million to build the Queanbeyan bypass. The Commonwealth and New South Wales governments have committed $25 million each to construct a 4.6 kilometre two-lane carriageway linking the end of Ellerton Drive to the new Edwin Land Parkway intersection at Old Cooma Road. A bridge will also be built over the Queanbeyan River.

The extension of Ellerton Drive will provide an alternative route for traffic wanting to bypass Queanbeyan's busy CBD and improve road safety. It is also a major economic development investment for the Queanbeyan district and has been the No. 1 infrastructure priority for the Queanbeyan City Council for a number of years. For those people worried that spending decreases in Canberra will adversely affect Queanbeyan and Eden-Monaro, this project will be a massive boost in investment and in jobs.

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

Under standing order 66A Interventions, I ask if the member for Eden-Monaro would take an intervention to which he could then respond.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Will the member take an intervention?

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

I am always interested to hear your questions.

Photo of Anthony AlbaneseAnthony Albanese (Grayndler, Australian Labor Party, Shadow Minister for Infrastructure and Transport) Share this | | Hansard source

I thank the member for Eden-Monaro. I ask, because this is related to the fuel tax increase, whether the project in Queanbeyan that he referred to in his contribution or even the Majura Parkway Parkway that is already under way are dependent upon the carriage of this new tax for funding or whether if this new tax does not go ahead those projects will still be concluded, which would suggest that the funding is not dependent upon this new tax at all.

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

The point I think is really relevant is that the ALP absolutely opposed this Queanbeyan bypass in the last election.

Mr Albanese interjecting

You did not support it at all.

Opposition members interjecting

I was asked a question about the Queanbeyan bypass.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

The member for Eden-Monaro has the call. The member for Grayndler will listen in silence to the answer. He was afforded the silence of the chamber for his intervention.

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

Indeed, Mr Deputy Speaker. I was asked a question about the Queanbeyan bypass, which was opposed by the Labor Party. The member for Grayndler may have been the relevant minister at the time. He opposed a project that was the No. 1 priority of the Queanbeyan City Council. Instead, those opposite proposed a Dunns Creek Road extension road that was not actually on the list of priorities for the Queanbeyan City Council and was never asked for. It was actually promised for in the 2010 election and was never delivered through the course of the 2010, 2011, 2012, 2013 parliamentary term.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

Who was that member?

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

The member then was a fellow named Mike Kelly.

Photo of Ewen JonesEwen Jones (Herbert, Liberal Party) Share this | | Hansard source

What party was he in?

Photo of Peter HendyPeter Hendy (Eden-Monaro, Liberal Party) Share this | | Hansard source

He was with the ALP. It is a road—that is, the Queanbeyan bypass—that will not only ease congestion in the CBD but will provide better access to the new housing estates in the area like the Googong development and maintain connection between east and west Queanbeyan during a one-in-100-years flood. This project has been promised for decades at the state level but was never delivered by Labor governments. Coalition governments at both the Commonwealth and state levels are now delivering it.

The government does not resile from the fact that these initiatives come at a cost. The estimated price impact of fuel indexation by the end of 2014-15 is an increase of about 0.8c per litre with an additional 0.1c per litre due to the GST, as the GST is applied to the excise inclusive price. The Treasury has calculated that 50 litres of fuel would cost around 45c extra or around $24 extra per annum if this usage was weekly, assuming the change is passed on in full and ignoring any other price changes. By the end of the forward estimates period in 2013, the increase is about 3.7c per litre with an additional 0.4c per litre due to the GST. Fifty litres of fuel would cost around $2.05 extra or around $107 extra per annum extract if this usage was weekly. For those businesses using fuel in off-road operations or operating a vehicle with a gross vehicle mass in excess of 4.5 tonnes, this measure will not increase their business cost. This is because these businesses are able to receive fuel tax credits to offset the fuel excise paid.

Since I have been interrupted by the member for Grayndler, I will cut to this really important point: I would like to remind people in my electorate that, on coming to office, the new coalition government faced a $47 billion budget deficit for the 2013-14 financial year and $123 billion of projected deficits to 2016-17. Today every man, woman and child in Australia, and therefore in my electorate, is footing a $1 billion interest bill every month on Labor debt. This budget begins the task of restoring budget integrity for the long term, making savings in current expenditure so we can invest in the infrastructure necessary to rebuild our national economy. The 2014 budget outlined a $50 billion investment across Australia to deliver vital transport infrastructure for the 21st century. The budget includes many large-scale commitments which will trigger more than $125 billion in infrastructure investment but, importantly, there is also a significant boost to road funding at the local level.

As part of this agenda we have committed $2.5 million for the continuation of the Roads to Recovery program to support the maintenance and upgrade of local roads. This includes an additional payment of $350 million to local councils during the 2015-16 financial year. To fix dangerous and accident-prone sections of local roads and streets, $565 million will be provided through the ongoing Black Spot program. This includes an extra $100 million in both the 2015-16 and 2016-17 financial years. Recently, on 4 June this year, the Assistant Minister for Infrastructure and Regional Development and I announced funding of $622,450 to fix dangerous black spots in Eden-Monaro. The Eurobodalla Shire Council will receive a total of $530,000, the Queanbeyan City Council will receive a total of $52,450 and the Bega Valley Shire Council will receive $40,000. The projects were recommended by a panel of independent road safety experts and will be delivered in the course of the coming financial year, 2014-15. A recent evaluation of the Black Spot program found that fatal and casualty crashes are reduced at treated sites by 30 per cent. That is a great result for the Black Spot program. This investment in black spot projects will deliver safer roads for Eden-Monaro through targeted upgrades proven to deliver results.

I also note the government's Bridges Renewal program, which was promised in the election campaign, will commence in 2014-15. Partnering with local councils and state governments, this program will invest $300 million in Commonwealth funding into the repair and replacement of local bridges. I have already raised this program with the mayors in my electorate and they are considering putting in bids.

To improve productivity and safety in the heavy vehicle industry, the government has also committed to continue the heavy vehicle safety and productivity program, with $200 million available over the next five years for projects such as road enhancement, rest areas and technology trials. In addition there has been a Community Development Grants program since the election which has confirmed $314 million in investments in over 300 projects, which are designed to deliver the coalition's election commitments, and some residue projects from the previous government. Among those 300 projects was the $10 million for the port of Eden redevelopment in my electorate, which is one of the most important local investments in infrastructure we have seen in years. It was promised by the previous government over the course of a whole six years but, amazingly, it was not delivered. We are now proceeding with it. The money is in the budget. We are getting on with the job, in consultation and partnership with the New South Wales coalition government.

Talking about infrastructure, I am also happy to confirm the coalition government will continue with its $160 million commitment to the Bega community to build the new South East Regional Hospital. This is a major project, in collaboration with the New South Wales government, which we hope will be completed in 2016. Only in February this year—that is, 2014—was it announced that the tender for the main works were awarded to Brookfield Multiplex. Do not let people think this is a Labor government project just because they announced it before the election: it is taking form and substance under a coalition government. We are actually getting the work done on this vital need for the Bega Valley district.

Further, the government's new $1 billion National Stronger Regions Fund aims to promote economic development through investment in infrastructure projects at the local level. The program will help communities with lower than average socioeconomic circumstances and higher than average unemployment by improving local facilities, creating jobs and building needed infrastructure. Grants from the program will commence next year. Again, I have been talking to the mayors in my district to ensure we work together, collaboratively, to get bids in for this very useful regional and rural program.

By partnering with state governments and leveraging private sector investment through innovative financing models, Australia is set to receive $126 billion in investment in productivity-enhancing infrastructure. Major projects are occurring across the country. I have already talked about major projects in my electorate like the port of Eden redevelopment, the Bega Valley hospital project, the Queanbeyan bypass and other road spending in the Eurobodalla and Bega Valley shires. In conclusion, these bills are a vital part of the government's infrastructure strategy and I commend them to the House.

4:36 pm

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | | Hansard source

The shame of this debate is that it has been truncated and effectively gagged, which means that members opposite who should be speaking will not be. I am not talking about members who come from Eden-Monaro or even the mighty Herbert. I am talking about the members for O'Connor, Forrest, Pearce, Capricornia, Grey and Leichhardt—those people who come from large regional electorates.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | | Hansard source

Lyons is not a large regional electorate. Let me just tell you what the impact of this GST is on those communities—I'll speak up on behalf of their constituents, even if they won't. Let me be very clear: the fuel excise will have a dramatic impact on people who live in those communities. We heard the Deputy Prime Minister say today in question time that the major impact of the tax is on the trucking industry. Well, I've got news for him. The major impact of the tax is on residents and constituents of mine who live in remote parts of northern Australia.

If you index fuel in the way that is being proposed and it also cops the GST it becomes a cascading tax. So if you pay fuel at $1.53 a litre then the current excise plus GST is 53.2c. If, however, you are paying $2.50 a litre you are paying 63c tax, a difference of 10c. But, of course, the people opposite do not acknowledge this cascading impact of this tax on the cost of fuel for people who live in regional Australia. They need to understand the impact of this tax on those people and on their lives, because families will be adversely affected by this silly tax. The Deputy Prime Minister has already said, and others have spoken of this: 'Fuel tax is a tax on distance. If ever there was a country that should not aggressively tax fuel it is a vast country like Australia. It is a tax on doing business outside of the capital cities. It is a tax on farming and the distant parts of our nation. It is a tax on living and setting up a business in a country town.'

Let me tell you that at Numbulwar in the Northern Territory people are currently paying $2.57 a litre for fuel. At Ngukurr, close by, the price is somewhat similar. Ngukurr is 300 kilometres from Katherine in the Northern Territory. People play football in Katherine of the weekend. The round trip is 600 kilometres and they are paying about $2.50 a litre for fuel. Who can say that this is sustainable? Who can argue that this impost that is going to have a cascading impact and increase over time will not have a major impact on those communities?

It is not the trucking industry, it is the people who live in those places who are most adversely affected by the changes which are being made. They already suffer huge costs. For example, the Central Land Council did a remote communities store price mark-up survey of the price in the CLC region compared to in the nearest regional centres of Tennant Creek, Alice Springs or Katherine. It found: fruit and vegetables, 35 per cent mark-up; essential health items, 55 per cent; variety products, 150 per cent; takeaway foods, 100 per cent; clothing, 80 per cent. It is the people there who are going to suffer, yet people in this chamber from the National Party and those people who purport to represent regional seats are not prepared to get up on their scrapers and represent the interests of those people.

We have an obligation in this place to tell this government that the people who will be most adversely affected, in this case in the Northern Territory, are the poorest people in Australia. They will be most gravely impacted by the whole suite of measures in this budget and this fuel indexation proposal will most adversely impact upon them. It is an absolute shame that we cannot get the members of the National Party to come in here and explain why it is they are going to support this measure when they know it is contrary to the interests of their constituents. I make it very clear that there is no way on God's earth I would support such an impost on the people in my community. Why would they?

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

In accordance with the resolution agreed to earlier, I call the honourable parliamentary secretary.

4:41 pm

Photo of Steven CioboSteven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | | Hansard source

I thank those members who have contributed to this debate. These bills modify the Excise Tariff Act 1921, the Customs Tariff Act 1995, the Excise Act 1901, the Fuel Tax Act 2006 and the Financial Management and Accountability Act 1997 to reintroduce the biennial indexation of excise and excise equivalent customs duty on all non-aviation fuels. Indexation to the consumer price index will begin on 1 August 2014 and will occur in February and August every year thereafter. The re-indexation of fuel excise and excise equivalent customs duty will raise $2.2 billion over the forward estimates. This will provide a predictable and growing source of revenue for the government's road infrastructure projects. Indeed, this revenue source allowed the government to commit to the biggest increase in road expenditure in Australian history in the recent budget.

This legislation also establishes the fuel indexation road funding special account. This account will ensure that net revenue raised through the re-indexation is spent on road infrastructure. The balance of this account will be reported in Budget Paper No. 4. The cost of petrol and diesel is expected to increase by approximately 0.9c per litre for consumers by July 2015 as a result of re-indexation. Businesses using fuel in off-road operations or operating and on-road vehicle with a gross vehicle mass in excess of 4.5 tonnes will not face an increase in their business costs from indexation. These businesses are able to receive fuel tax credits to offset the fuel excise paid. Consequential amendments will also be made to the Excise Tariff Act 1921 and the Customs Tariff Act 1995.

While indexation will continue at three decimal places for each indexation period, the applicable duty rate will be rounded from three decimal places in the cent to one decimal place. This rounding will simplify the duty rate to reduce the burden on businesses. On the current rate for petrol this would have the effect of reducing the rate from 38.143c per litre to 38.1c per litre.

We have reached the point in this debate where the Labor Party have put forward their opposition to it and have even put forward an amendment that in some rather poor way attempts to maintain that this policy is not consistent with what the coalition took to the last election. We have the Greens, in an amazing about-turn, an almost gymnastic effort of a backflip, now saying they will not support re-indexation of excise on fossil fuels—surely something that I think most people would reasonably have thought. But what is extraordinary from the contributions of Labor members opposite is the Labor Party's contention that because we in the coalition government are seriously attempting to deal with the state of the nation's finances, attempting to stop stealing from the next generation of young Australians to pay for today's spending and undertaking to make responsible decisions that deal with the fiscal challenges this nation faces, that is in some way inconsistent with the mandate received from the Australian people at the last election.

Let's be clear about what exactly it is that is inconsistent. It is inconsistent for the Australian Labor Party to come in on debates like this and rail about equity. It is inconsistent for the Australian Labor Party to come into debates like this one and rail about the impact on families. The reason it is inconsistent is that Labor's efforts, not only in relation to this budget initiative but in respect of the nearly $40 billion of additional spending that Labor want to reintroduce into the budget, combined with the fact that Labor stand opposed to revenue increases like this one, underscore that Labor are not serious when it comes to inequity. Labor are not serious when it comes to Australian families because, if they were—if Labor were genuine about the impact on families and genuinely motivated and concerned about what it meant for Australian children—they would not condemn them to tens of billions of dollars of additional debt in order to try to win a few votes.

The Australian Labor Party have form; Australians know that. They will say anything on any given day if they think that there is a vote in it. They will not make the serious decisions that are in the national interest to address the challenges that we have. The Labor Party will not undertake the heavy lifting that is required to meet the challenges this nation faces. When the coalition are genuinely concerned about making sure that Australian children do not have to spend the next 20 or 30 years paying off Labor's debt, we respond by making unpopular decisions like this one—not because we think there are votes in it but because it is in the national interest. The Labor Party used to know that. The Labor Party was once a party of principle.

Photo of Eric HutchinsonEric Hutchinson (Lyons, Liberal Party) Share this | | Hansard source

They stood for something.

Photo of Steven CioboSteven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | | Hansard source

The Labor Party did indeed once stand for something—but no more. The only thing you can be assured of in this day and age is that the Australian Labor Party will adopt whatever position they need to adopt in order to try to secure themselves one extra vote. So we get members like the member for Lingiari, who professes to be concerned about the people of the Northern Territory and who in his contribution to the debate made claims that this measure is not in their interests but conveniently ignores the fact that, as a result of the six biggest budget deficits in Australia's history, the actions of the government that he was a member of mean that the Australian people of the Northern Territory are forecast to be in debt to the tune of $25,000 for every man, woman and child.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | | Hansard source

What did you do to the deficit when you came to government?

Photo of Steven CioboSteven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | | Hansard source

So do not expect us to take you very seriously, Member for Lingiari, because we do not take you very seriously.

Photo of Warren SnowdonWarren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | | Hansard source

What did you do to the deficit?

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

Order, Member for Lingiari!

Photo of Steven CioboSteven Ciobo (Moncrieff, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | | Hansard source

The member for Lingiari cannot come into the chamber professing to be concerned about Australian families and professing to be concerned about the people of the Northern Territory after the track record of the government of which he was a member left those people in so much debt and deficit that they will take 20 or 30 years to repay the debt.

When we take initiatives like this to stop Australia from staying on a trajectory where we have to borrow $1 billion every single month simply to pay back the interest on the debt that Labor accumulated, we do not expect the Australian Labor Party to stand in the way; we expect them to do the right thing. We know that the right thing is not always popular, but that does not in any way, shape or form erode the fact that it is the right thing to do for our nation. The coalition will continue to do the right thing for our nation. The coalition will continue to make sure that we put the interests of the next generation of Australians first. The next generation of Australians know that we will attempt to bequeath to them a country that is in a stronger financial position than what we inherited. That is not Labor's approach; it is not the approach of the Greens. On that basis, this is the right thing to do. I commend the bill to the House.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

The question is that amendment moved by the honourable member for Hunter be agreed to.

5:01 pm

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

Pursuant to the resolution agreed to earlier, I will now put the question on the Excise Tariff Amendment (Fuel Indexation) Bill 2014 and three related bills. The question is:

That these bills be now read a second time.

The House divided. [17:02]

(The Deputy Speaker—Mr Vasta)