Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Firstly, I would like to thank all those senators who have contributed to this debate. These bills implement the government's 2014-15 budget measures to reform the taxation treatment of biodiesel and ethanol. These measures have been amended to provide additional transitional assistance for domestic biodiesel producers to assist that sector in adapting to these excise changes.

Following some further discussion with industry, further amendments are being made in the Senate to provide a slower phase-in of the rate of excise. As a result of the amendments yet to be moved, the fuel tax rates for biodiesel increase in a straight line manner from 1 July 2016 until 1 July 2030 when the excise right for biodiesel will be approximately 50 per cent of the excise right for diesel. The extended phase-in for biodiesel producers will provide additional support to that industry while it continues to develop and grow.

The government's amendments balance the support for the biodiesel industry against the need for a sustainable approach to the budget going forward. The phase-in of excise gives these producers time to adjust while encouraging their businesses to be self-supporting in the future.

These bills also abolish the cleaner fuels grant scheme, which refunds excise and excise equivalent Customs duties paid on both imported and domestically produced biodiesel. In addition, the Ethanol Production Grants scheme, which refunds excise paid on ethanol to domestic producers, will cease on 30 June 2015.

The government is continuing to provide support to Australian producers of ethanol and biodiesel while ensuring that responsible decisions are made to continue the path back to a budget surplus. Continued support for these industries highlights the role of ethanol and biodiesel producers in maintaining diversity in Australia's fuel mix and future energy security. I commend these bills to the Senate.

Question agreed to.