Thursday, 30 October 2014
Customs Tariff Proposal (No. 1) 2014, Excise Tariff Proposal (No.1) 2014
Proposals described as Customs Tariff Proposal (No. 1) 2014 and Excise Tariff Proposal (No.1) 2014 in the terms of the printed proposals which are now being circulated to honourable members.
The government is continuing to implement all of our budget measures in an orderly and methodical way. As part of the 2014-15 budget, the government announced it would reintroduce the biannual indexation of fuel excise to inflation. The excise and customs tariff proposals I have just tabled give practical effect to this decision. Funding constraints at all levels of government have become a significant impediment to the provision of the infrastructure that Australia needs to bolster the productive capacity of the economy and prosperity for the 21st century.
This government is responding to the needs of the economy by building infrastructure that will drive economic growth, create jobs and improve productivity. That is why we have committed to the biggest increase in road expenditure in Australian history. Reintroducing fuel duty indexation will contribute to a secure funding source for these productivity enhancing road infrastructure projects going forward. In difficult budget circumstances, this is the responsible way to immediately start building the roads that Australia needs.
The impact on individual households will be modest. For a typical household which consumes 50 litres of fuel per week, the estimated price impact of fuel indexation by mid-2015 will be around 40c per week. Implementing this policy now, through the use of tariff proposals, is essential to the government's plans to build a strong and prosperous economy into the future. That is why I am tabling these excise and customs tariff proposals.
These tariff proposals will, from 10 November 2014, index the rate of fuel duty for liquid fuels, such as petrol and diesel, to the consumer price index. The new rate will be 38.6c per litre. Consumer price index indexation of duty on fuel will apply each year thereafter on 1 February and 1 August. Other duty rates for alternative fuels, such as gaseous fuels, will be indexed in the same manner.
The tariff proposals will also simplify the burden on businesses by rounding the applicable duty rate of indexed fuels from three decimal places of a cent to one decimal place. For example, if it were applied to the current rate of petrol, this would have the effect of changing the excise and excise equivalent customs duty rate from 38.143c per litre to simply 38.1c per litre.
Amendments to the law will also be introduced shortly as part of the Tax and Superannuation Laws Amendment Bill (2014 Measures No. 6) Bill 2014 to ensure that businesses which claim fuel tax credits continue to receive the appropriate credit when a tariff proposal increases the rate of fuel duty being collected.
Fuel tax credits ensure that businesses operating heavy—that is, greater than 4.5 tonnes of gross vehicle mass—on-road vehicles or using fuel for off-road purposes are not affected by fuel duty. This removes the incidence of fuel duty for these business activities. The government considers it very important that business will be able to receive fuel tax credits equal to the rate of duty on fuel as soon as possible so that they do not have to wait until a later date to claim them.
The government is continuing to implement all of our budget measures in an orderly and methodical way. For further details, a summary of the alternations made by the tariff proposals has been prepared and is being circulated.