Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006

Second Reading Speech

Senator Kemp (Minister for the Arts and Sport)

I table revised explanatory memoranda relating to the Age Discrimination Amendment Bill 2006 and the Electoral and Referendum Amendment (Electoral Integrity and Other Measures) Bill 2006 and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-

This bill is a companion bill to the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006.

This bill makes changes to the Excise Tariff Act 1921 so that the mechanism of fuel tax relief for eligible users is through the fuel tax credit system, legislated through the Fuel Tax Bill 2006, and not through concessions within the excise system. In particular, the fuel items in the Schedule to the Excise Tariff Act 1921 are amended so that there are only two rates of duty, one for aviation fuel and one for other fuels. In conjunction with the fuel tax credit system this will remove the effective excise on burner fuels and provide effective excise relief for a wide range of business users of fuel, including where fuel is used other than as a fuel.

The fuel items of the tariff are also amended to recognise that fuels can now be manufactured from sources other than petroleum, oil shale or coal.

This bill streamlines the existing Schedule by removing redundant provisions and also removes certain free items where the items are for use by certain third parties. These concessions will still be available to those third parties through changes to the Excise Regulations 1926. There will be no changes to the eligibility for these concessions except for a tightening of conditions under which tobacco can be used, free of excise duty, for research purposes. The changes are directed at simplifying the Schedule and making it, as far as possible, concerned with classifying goods and not providing concessional rates in the Schedule.

The excise rate for snuff tobacco is aligned with the rate for other tobacco. Snuff is not manufactured in Australia however the complementary changes in the Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006 will ensure that importers of snuff tobacco pay the same duty as other tobacco users.

Full details of the measures in the bill are contained in the explanatory memorandum already presented.