House of Representatives

Excise Tariff Amendment Bill (No. 1) 2003

Second Reading Speech

Mr SLIPPER (Fisher-Parliamentary Secretary to the Minister for Finance and Administration)

I move:

That this bill be now read a second time.

The Excise Tariff Amendment Bill (No. 1) 2003 amends the Excise Tariff Act 1921 to validate the changes made by Excise Tariff Proposal No. 4 (2002). This proposal removed the excise exemption from fuel ethanol from 18 September 2002 and imposed an excise duty rate equivalent to that applying to petroleum, currently 38.143 cents per litre.

Customs Tariff Proposal No. 3 (2002) made complementary changes to customs duty on imported fuel ethanol.

The measure was introduced as part of the strategy of the government to encourage the use of biofuels in transport in Australia. At the same time the government introduced a domestic production subsidy for new and existing producers of fuel ethanol at a rate of 38.143c a litre. This subsidy, administered by the Department of Industry, Tourism and Resources, was a targeted means of maintaining the use of biofuels in transport in Australia while the government considered longer term arrangements. Ongoing arrangements have been announced in the budget.

The amendments to the Excise Tariff Act 1921 alter the classification of denatured ethanol for use as fuel and impose an excise rate equivalent to petroleum. A new formula is inserted in the Excise Tariff Act 1921 for determining the duty payable on a blend of fuel ethanol and other petroleum products, reflecting the changed classification and rate of duty.

Complementary changes to Customs legislation are being addressed through Customs Tariff Amendment Bill (No. 2) 2003.

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

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Mr Edwards) adjourned.

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