House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Amendments relating to the Diesel Fuel Rebate Scheme

Overview

1.1 Schedule 1 to this Bill will:

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amend the Customs Act 1901 to repeal subsections 164(5AAA) and (5AAB); and

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amend the Excise Act 1901 to repeal subsections 78A(5AAA) and (5AAB).

Summary of amendments

Purpose of amendments

1.2 The purpose of the amendments is to align the diesel rebate rate for forestry use with the rebate rate for agriculture.

Date of effect

1.3 The amendments apply from 1 July 2000.

Background to the legislation

1.4 An inadvertent consequence of the passage of the overall package of amendments to the modified ANTS scheme is that the forestry and timber processing industries would have been required to pay approximately 8 cents per litre more for off-road use of fuel than other Agricultural industries. The intention of the Government was always that these industries would receive the same rebate amount. To ensure this commitment is kept, this amendment repeals the relevant subsections of the Customs Act 1901 and the Excise Act 1901 .

1.5 The full rebate will be payable for fuel purchased for eligible forestry activities from 1 July 2000 and this amendment aligns the diesel rebate rate for forestry use with the rebate rate for agriculture.