Petroleum Stakeholder Group key messages 11 July 2019

Welcome and introductions

Tony Poulakis, Private Wealth, ATO

Tony Poulakis welcomed members to the meeting.

No conflicts of interest were declared. Minutes of the meeting of 7 June 2018 had been finalised and published on the ATO website. There were no outstanding action items.

Reflections of 2018–19 and Compliance focus areas for 2019–20

Andrew Cassidy, Private Wealth, ATO

Andrew advised that the compliance treatment plan for 2019–20 would be similar to the previous year, ie to engage early with clients, particularly to identify where they may be having difficulties with lodging excise returns and paying excise on time. The ATO would also be attempting to identify those who were operating outside the system or who had disengaged from the ATO. The ATO would continue to focus on management of our larger clients given the significant amount of excise paid by a small number of clients. These clients have ATO Excise Client Managers (ECMs) assigned to them or are linked in through other engagement activities. Issues for these clients commonly related to systems and impacts on excise return preparation, lodgement or payment, for example where industry’s SAP management software produced reports which were not completely compatible with ATO systems. This has led to the use of manual processes to match returns with payments in some cases. Also, there have been instances where returns were not attached to messages coming through the ATO’s Business Portal. The ATO, usually with assistance of ECMs, continued to work with clients to resolve these issues when they arise.

Further investigation would also be undertaken around biofuels which represented a small part of the market. Nathan Dickens offered to provide a briefing for the ATO on biofuel activities in NSW and Queensland in relation to the fuel supply chain from the perspective of excise payers. Members discussed companies coming back into the biofuels industry and issues around education. Industry suggested that this is an area where education regarding obligations would be useful, as well as overall monitoring of the industry.

There was a differential in the duty rate for manufactured product versus imported. Some states have mandated volumes. The ATO are not seeing a direct correlation with what is manufactured and would like to gain a better understanding of what is happening in the market. Inquiries to assist this work may come to members via their Excise Client Managers.

Helen Curran referred to issues being experienced with the use of the Business Portal when software updates, such as Java, take place. As some industry members are required to submit returns internally by 10.00am, delays can occur as this only provides a short turnaround window for company’s IT staff to fix the problem.

ATO updates

Overview of myGovID and Relationship Authorisation Manager (RAM)

Paul Stasinowsky, Enterprise Solutions and Technology, ATO

Paul Stasinowsky provided a presentation regarding digital identity changes to improve how clients access whole-of-government services on behalf of business. From March 2020, AUSKey will be phased out and replaced by myGovID. This is an app which individuals are able to download and have their identity approved which would then allow access to business information. The RAM is able to store business authorisations. MyGovID is currently available on IOS and is being rolled out in Android in August.

Members discussed the communications campaign to ensure that benefits of use for the client featured in messaging. Industry also advised that while myGovID could be connected on any web-based device that had AusKey, some companies had limitations where equipment was standalone to perform specific transactions. Industry would also need to work on internal assessments regarding controls in systems.

Members were keen to be kept informed of the rollout of myGovID and RAM as it would involve significant work for businesses.

Kathryn Traczyk provided an update on the Contemporary Excise Experience (CEE) funding to upgrade the excise and excise equivalent goods (EEGs) payment system which will be provided in 2020–21. Kathryn acknowledged the significant feedback provided by members of this group for this work in the move from paper to online lodgement. The ATO is commencing work on a design build, with a three year IT build expected. Excise systems would be brought online, followed by claims and then authorisations.

Tony Poulakis advised members that the ATO had recently restructured some business lines and that the Excise Product Leadership Branch would now be called the Excise Centre, aligning with the recently created GST Centre and Not for Profit Centre. ECMs continue to provide assistance and support to industry. Excise client managers (ECMs) were formerly called Relationship managers (RMs). Industry expressed appreciation for timeliness in response to queries from industry to both the ATO and Customs Group, particularly in relation to permissions required for ships at short notice.

Update on ATO consultation surveys

Rowena Troth, Private Wealth, ATO

Rowena Troth provided an update of two requests relating to stakeholder feedback.

The first related to a request in August 2018 from the previous Chair, Raj Srikhanta, to members asking for feedback on the ATO and the stakeholder group meetings and arrangements. Responses from the four external stakeholder groups had been collated and worked through by Excise Centre staff to identify potential solutions to any issues raised. Generally, responses had been very positive on the working relationship with the ATO and Excise Centre.

In March 2019, a separate request had been sent to members of external stakeholder groups seeking feedback on consultation across the ATO. Responses had been collated and would be used to provide an effectiveness measure of ATO consultation. Individual stakeholder group responses would not be provided to secretariats. It was expected that the outcome of this survey would be published in the ATO Annual Report.

Industry updates

Grace Leung raised the issue of double duty treatment of importation additives.

Members discussed excise paid on marine fuel and time taken validating whether a voyage was international or domestic, where excise was paid and then claimed back as fuel tax credits. The ATO had recently considered this issue and found that there was no administrative solution and law change would be required. Industry saw this issue as both a red tape reduction issue as well as relating to market competitiveness measures.

Industry also raised the issue of excise rate increases being linked to the consumer price index (CPI) and administrative issues experienced in relation to the date of effect not being linked to excise reporting. Increases taking effect on the first day of the relevant month would cause less impact on industry in relation to changes to sales contracts and notifications to customers. Susan Bultitude advised that a fix for this would require legislative amendment.

Nathan Dickens informed Commonwealth members of key issues impacting industry, including:

The current review of fuel quality standards:

• Significant ongoing industry investment – there has been an increased infrastructure investment of $2 billion over the last five years. The majority of investment has been fixed where growth and demand were located, with trends continuing to be the greatest in diesel and jet fuel. Gasoline consumption had remained steady despite the number of vehicles doubling over the last decade.
• Storage to meet demand – Australia is dependent on the frequency of the supply shipping pattern, however larger ships meant less trips and lower freight costs.
• Red tape reduction agenda.
• Liquid Fuel Security Review – an interim report has been issued.
• Excise Reform – this continues to be a high priority for industry.

Members also discussed mandatory reporting on petroleum. The ATO had provided reports to the Department of Industry, Innovation and Science, who would query any discrepancies. The ATO is working with the Department of the Environment and Energy who were also keen to understand the interactions of the petroleum industry and how it worked.

Other business

Susan Bultitude advised members of regulations relating to the product stewardship for oil program which were due to sunset at the end of 2019 – Product Grants and Benefits Regulation. It was not expected that significant amendments would be made.

There was no other business. The meeting closed at 3.05pm.

Action item updates

Attendees

Apologies