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  • Petroleum Stakeholder Group minutes 20 September 2016

    Meeting details

    Venue: ATO Office, 747 Collins Street, Docklands, Melbourne

    Date: 20 September 2016

    Start: 1.30pm Finish: 4.00pm

    Chair: Tom Wheeler

    Secretariat: Rowena Troth


    Tom Wheeler


    Andrew McIver


    Michelle Scott


    Stasi Polas


    Chris Brennan


    Michael O'Rourke


    David Pullen


    Sasha Billett

    Department of Immigration and Border Protection (DIBP)

    Renae Hutchinson

    Australian Border Force (ABF)

    George Binos

    Australian Border Force (ABF)

    Nathan Dickens

    Australian Institute of Petroleum

    Chris Scully

    BP Australia Pty Ltd

    Adrienne d'Rose

    BP Australia Pty Ltd

    Grace Leung

    Caltex Australia Petroleum Pty Ltd

    Jenny Park

    Caltex Australia Petroleum Pty Ltd

    Helen Curran

    Viva Energy

    Rod Geer

    Exxon Mobil

    Grace Abinoja

    Exxon Mobil

    Rowena Troth

    ATO - Secretariat


    Lee Holland

    Caltex Australia Petroleum Pty Ltd

    Discussion summary


    The Petroleum Stakeholder Group agendas, minutes and related papers are not binding on the ATO, DIBP or the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

    Agenda item 1 – Welcome


    It was noted that the minutes of the meeting of 20 May 2015 were previously endorsed and have been placed on the website. All action items have been finalised. No conflicts of interest were declared by members.

    Agenda item 2 – Reinventing the ATO


    Members noted the report by Tom Wheeler regarding achievements to date and the ATO’s commitment to further improve client’s experience with the tax system. An infographic providing details of key achievements for 2015–16 in relation to excise payers was distributed. Tom provided more detail about several items, including the New to Excise initiative.

    The ATO welcomed input on any new irritants or opportunities that specifically apply to the petroleum industry for consideration.  Industry reiterated issues that they have previously raised which are being taken into consideration by the ATO in the design of the contemporary excise solution.  Industry expressed that the vast majority of irritants would be resolved as part of the current excise/excise equivalent goods reform proposal.  Industry were supportive of this type of major reform rather than smaller changes with limited benefit.  Industry expressed that streamlining of the excise and excise equivalent goods regimes remains their top priority and they would be agreeable to being part of a pilot, if required, as a representative of industries impacted by excise payments.

    Action Item 20092016-2-1 – The ATO to provide a key contact for petroleum excise to assist in directing inquiries for new-to-petroleum excise clients. This would include a phone number and email address.

    Action Item 20092016-2-2 – Members to provide suggestions to Chris Brennan for a Frequently Asked Questions relating to petroleum excise for potential inclusion in guidance / support materials.

    Agenda Item 3 - Compliance focus areas for 2016–17


    Members noted the update provided by Andrew McIver. The fuel and energy treatment focus has shifted towards lighter touch products such as phone calls, advisory visits and streamlined reviews. This is in line with a more tailored engagement of clients based on their circumstances and behaviour. The early intervention approach is intended to resolve non-compliance early rather than through audit products. A focus for this year will be activities targeting mid-tier fuel and energy clients. The purpose is to provide assurance around systems, processes and controls and gain an understanding of their business.

    Mid-low tier assurance

    • Large clients have an allocated relationship manager who, through regular interactions with their client, develop an understanding of business processes and compliance assurance for their client however this relationship doesn’t exist for mid-low tier entities.
    • The aim of the activities to be undertaken on the mid-low tier entities is provide assurance around business processes and compliance with obligations, and to understand the client, the environment, behaviours/pressures that may lead to risk.
    • A financial outcome is not anticipated in these activities, rather a focus on controls and assurance with some testing and reconciliation.

    The general focus for the other excise fuel and energy areas are client education and support, assurance and compliance.  30 cases have been allocated.

    • Correct licenses and permissions, unlicensed operations.
    • Compliance with obligations and reporting and payments (time and correct classification).
    • Diversion of underbond product.
    • Accounting for goods, maintaining records.
    • Cases will be targeted based on assessed risk. Likely to specifically include entities where there have been significant shifts in clearances, no contact for a number of years.

    Agenda item 4 – Technical updates


    Deregulation: bunker fuel – Stasi Polas provided an update regarding potential deregulation of bunker fuels to reduce compliance costs and reporting. This is being discussed with Department of Immigration and Border Protection. Since the last PSG meeting, the ATO have been liaising with the Department of Industry, Innovation and Science (DIIS), Maritime Australia, Shipping Australia and others. DIIS have advised their preference of Australia being the gateway to Antarctica. It was noted that this proposed change in legislation would be useful however it may not be a priority project, and is not currently on the government’s law change agenda.

    Action Item 20092016-4-1 – Stasi Polas to provide a copy of the consolidated position to Nathan Dickens. Stasi to also seek comments from members about additional data / statistics that would provide more information about this subject.

    Tom Wheeler also raised the proposed Commissioner's Statutory Powers which should be considered for addressing appropriate irritants.

    Fuel Tax Credit (FTC) ATO advice products – Members noted the update provided by Michelle Scott regarding the recently released guidance products around claiming FTCs. These included:

    • Fuel tax determination 2016/1 (FTD 2016/1) referring to the FTC rate being reduced by the road user charge for fuel used in a heavy vehicle for idling on a public road or powering the air conditioning unit of the vehicle’s main cabin when travelling on a public road.
    • The explanation of ‘public road’ was clarified in fuel tax ruling FTR 2008/1.
    • Practical compliance guideline PCG 2016/11 replaces PSLA 2013/4 (GA) and is a guide to methods that claimants can use to apportion fuel used in heavy vehicles to power auxiliary equipment.

    The group discussed the issue of public roads / toll roads. Michelle also advised members of the safe harbours released by the ATO in March 2016 around apportionment of fuel claimed for FTC’s as well as vehicles used off road. A list of vehicles was issued as part of this document. The ATO are happy to add other types of vehicles proposed by industry if the ATO considers them appropriate. During October and November, a post-implementation review of the safe harbours initiatives will be carried out. The ATO welcomes any feedback on these initiatives as part of this review.

    Michelle advised that there was a specific commitment to make it easier to apportion FTCs as part of the ATO’s Every Year Counts commitments. As part of this work, the ATO’s FTC Calculator and FTC Eligibility Tool has been updated and improved. The safe harbours mainly impact those clients claiming $10,000 or less, which make up approximately 80% of claimants. The ATO would welcome any suggestions where there might be similar or potential safe harbours for larger entities.

    Action Item 20092016-4-2 – Rowena Troth to ensure that messages to the Fuel Schemes Stakeholder Group are also provided to the Petroleum Stakeholder Group members.

    Members reiterated their interest in receiving advice, where possible, to alert the group of any changes in policy, processes etc.

    Return to bond claims for lubricant additives / products 

    Action Item 20092016-4-3 – Sasha Billett to follow up out of session with Nathan Dickens to gain a better understanding of this Customs duty issue.

    Draft Vapour Recovery Unit (VRU) simplification proposalStasi Polas summarised the options identified in the paper for this item. Members discussed potential issues including possible large variations in testing which would be used for some time if implemented. It was noted that one client is currently researching the reasons for the variations in readings, whether temperature variations, particularly time of day, what the truck was previously carrying impact the result. Members discussed potential savings if the number of tests were reduced, as well as new technology in VRU’s which are giving better recovery rates. Benchmarking the readings may provide a long term average. The impact of such a potential safe harbour in relation to cost savings and benefits would be required to be included in the proposal.

    Action Item 20092016-4-4 – Stasi Polas to draft an email to PSG members outlining the information required to be included in the VRU proposal in terms of benefits / impact quantification prior to members providing further comment on the VRU options paper.

    Agenda item 5 - Project updates


    Excise Online System and reform – Michael O’Rourke advised that ATO Design staff are undertaking consultation as to the design of a new contemporary excise online system. This is part of our 2016–17 every year counts commitments for excise payers experience with the tax system. The Design team will be consulting and drafting a proposal over a 12 week intensive period. The Design team will be meeting with external clients soon.

    Part of the work will be to map out different touch points eg standard business reporting. Chris Scully raised possible changes to the legislation framework of out of period adjustments (OOPAs), either requiring them less often or if technology was improved, this would save considerable time for clients. Rod Geer also referred to the BAS lodgement environment and other irritants discussed at the Excise Client Experience Workshop in October 2015.

    Industry members advised that companies are reducing resources working in the excise area on the expectation that the ATO will be making material changes in this area. Members discussed the work being carried as part of the wider excise and excise equivalent goods reform proposal, particularly around stock on hand arrangements and potential transition processes.

    Industry restated their support of reform indicating that 95% of irritants would disappear if the proposed reform was implemented – and would assist Government significantly as well.

    Customs Licensing Review – Sasha Billett advised that DIBP announced a review of licensing procedures in July 2016. Since then the scope of the review has been reconsidered. Workshops will be held in October for DIBP and industry to work to strengthen the integrity of the system to safeguard against corruption. The DIBP are currently working on a forward workplan.

    Agenda item 6 – Industry/member updates


    Industry asked for an update about Mandatory Data Reporting. Andrew McIver advised that the ATO are working with the Department of Industry, Innovation and Science (DIIS) regarding this work. Discussions will take place with AIP in due course. Members discussed issues related to this work including periodic settlement permissions, the taxing point, and whether DIIS would require data in addition to what industry collect. This will be discussed further out of session between Andrew McIver and Nathan Dickens to confirm timeframes and other arrangements.

    Members discussed the possibility of improved digital interaction with the ATO and whether there were any improvements on the Business Portal. The ATO advised that improved digital delivery systems are part of the design of the Contemporary Excise Solution which was discussed earlier.

    Agenda item 7 – Other business


    Secondments - Andrew McIver – Following 'Build Excise Capability' being identified as one of the three priorities from last year’s Client Experience Workshop, the Excise Product Leadership Branch have been undertaking various initiatives to improve both internal and external capability. One of these initiatives is increasing the number of secondment opportunities – both for ATO officers in industry and for industry staff to work in the ATO. The EPL Branch currently have an officer on secondment at Treasury, another with the Australian Federal Police (AFP) and are finalising arrangements of a swap of staff with an accounting firm. The purpose of these secondments to industry is to understand drivers (not compliance), to build networks and connections, and to gain a better understanding of commercial impacts of ATO decisions.

    An ATO officer is currently seconded to a large business and this has been very successful. He will be working on Mandatory Data Reporting and IT systems and will not be working on anything that is commercially sensitive, as specified in the Secondment Contract.

    The EPL Branch are also working with DIBP to arrange short term exchange programs between DIBP / ABF and the ATO of staff working in the excise area around compliance, licensing, risk and intelligence, relationship management etc.

    Australian Trusted Trader (ATT) - Sasha Billett – Sasha advised members of the launch of the Australian Trusted Trader Program on 1 July 2016. This has been very heavily subscribed gaining a lot of interest in the supply chain. Approximately 300 Expressions of Interest have been lodged with five now fully accredited.

    Action Item 20092016-7-1 – Sasha Billett to provide advice of numbers of EOIs received for the Australian Trusted Trade Program and the number of companies which have been fully accredited.

    There was no other business.

    The meeting concluded at 4.00pm.

      Last modified: 21 Sep 2017QC 53339