Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
General outline and financial impact
The purpose of this legislation is to amend provisions of the Excise Tariff Act 1921 (Excise Tariff Act) to:
- adjust the rates of excise duty for relevant (commonly known as old) and new crude petroleum oil;
- remove threshold price provisions for old oil; and
- correct minor technical deficiencies in the crude oil excise provisions.
Date of effect: The amendments to be made by this bill to the rates of excise duty for old and new oil, and the removal of the threshold price provisions applicable to old oil, are to have effect on and from 1 July 2001. The minor technical amendments will commence on the date of Royal Assent.
Proposal announced: On 15 August 2001, the Government announced changes to the Excise Tariff Act to encourage oil exploration and production both onshore and offshore. The changes will streamline current legislation and reduce certain crude oil excise rates.
Financial impact: The estimated cost to revenue of the reductions in the rates of excise duty for old and new crude oil are $38.5 million in 2001-2002, $18.5 million in 2002-2003, $9.1 million in 2003-2004, $6.8 million in 2004-2005 and $6.9 million in 2005-2006.
Compliance cost impact: Nil.