Julie Owens (Parramatta, Australian Labor Party) Share this | Hansard source

I rise to speak on the Fuel Tax Bill 2006 and the Fuel Tax (Consequential and Transitional Provisions) Bill 2006. This is an important debate, but it is a very small part of a much larger debate which this nation should be having centring around the use of energy and the way we develop our energy resources for the future. We have touched on some of those issues in our second reading amendment. Energy is an issue which is being debated widely in the community at the moment. Petrol prices are rapidly rising, putting incredible pressure on family budgets. There are conflicting views in the community and in this parliament on the signing of the Kyoto protocol and we have at the moment the furphy of nuclear power raised by the Prime Minister last month thrown into what is a vacuum of the larger policy of energy in Australia. There is a lack of talk in this place even on alternative sources, of Australia’s ingenuity and of ways for us to shield Australia from oil price shocks in the future by developing alternative sources within Australia both for use within Australia and for export.

But today we are talking not about that but about a very small but important part of it, which is fuel tax. There are 19 speakers on the opposition side for these bills, which reflects how importantly we on this side view the entire energy debate and how few and far between are the genuine opportunities to debate this important matter in this parliament. The fuel tax bills today do not deal with the general motor car use of mums and dads and motorists but specifically with some businesses and particularly regional areas. The legislation plays around the edges. It makes some very important changes and those changes are needed. They have been needed for some time. In fact, the government has made four announcements about the reform of the fuel excise rates over the last few years. The first was in the 2003-04 budget, where the government outlined the reforms, and then in December 2003 the Prime Minister elaborated on the budget announcements. In March 2004, the government extended the transition path for fuels becoming subject to excise. In June 2004, they released their energy white paper, and the Treasury, quite independently, on 27 May 2005 introduced a paper called Fuel tax credit reform: discussion paper. So there have been at least four major announcements on the need for this reform dating back to 2003-04.

Essentially this bill implements a system of credits to offset either partially or fully the excise that some taxpayers pay on fuels and to lay a groundwork for extending the tax net to alternative fuels, both current and developing. Most fuels are subject to excise, when a fuel is produced in Australia, or customs duty, when the fuel is imported, and also to the goods and services tax. This bill relates to excise and customs duty. The bill also deals with the Energy Grants (Credit) Scheme, which allows users to recover some or all of the excise and customs duty on fuels. That system is administered by the Taxation Office, which publishes the grant rates on its website. This bill essentially moves some of those processes around. It simplifies the process into one process through the BAS system. It increases tax for some and decreases tax for others. Some will pay less, few will pay more and it introduces a tax regime for alternative fuels which will be introduced over a number of years. The current arrangements for taxation of fuel in Australia are highly complex and there is much scope for rationalisation.

The proposed changes from 1 July 2006 seek to consolidate a range of measures into a single fuel tax regime with credits achieved through the BAS reporting system. Many users will effectively receive the same level of tax credit but under different administration arrangements. As I said, some will face more tax and some will face less. Under the current system, off-road use is treated differently to on-road use, as it is in this new bill. Under the fuel tax credit system, all taxable fuel acquired in, manufactured in or imported into Australia for use in off-road applications for business purposes will over time become tax free. There will be effective fuel tax-free status introduced for business off-road use. On-road users, on the other hand, will face increased taxation, the 20-tonne threshold will be removed and vehicles over 4.5 tonnes will pay fuel tax at the level of the road user charge and receive a fuel tax credit for other tax. The Fuel Sales Grants Scheme will be abolished over time. The scheme costs $256 million per year and provides a grant for sales of gasoline or diesel of up to three per cent per litre in non-metropolitan regions.

The bill has been supported by most producers, but it has been opposed by the ACCI due to the cash flow implications for small to medium enterprises. Currently, remission certificates permit some industries to receive fuel excise free, but under the proposed regime these fuel credits will be received only after the BAS has been lodged and processed by the ATO. This will cause cash flow problems for many SMEs, who may have to wait almost 50 days between paying the excise and receiving the fuel credit. This morning, some two hours before the debate began, we received a new amendment from the government which will provide short-term relief for that but only for two years. In recognition that this will cause considerable hardship for many small businesses, they will be able to receive their credit early, but at the conclusion of those two years the regime will revert. So this is not a solving of the problem at all, merely a pushing of the problem away for another two years.

It would be nice if this government, particularly given that it has known about these reforms since 2003-04, spent more time getting the bill right in the first place. This is why in its second reading amendment the opposition condemns the government for failing to properly consult with commercial fuel users on the appropriate model for payment of fuel tax. This is a system which suits the Taxation Office but does not suit the many small users who have built their business models and cost structures around the existing concessions made at the time of fuel purchase. The amendment also condemns the government for circulating major amendments less than two hours before debate on the bill. Most people not in this parliament would assume that when one receives an amendment one can actually read it. Amendments actually read like this: ‘(1) Clause 2, page 2, table 8, omit parts 1 to 4, substitute parts 1 to 4A.’

There are three pages to this amendment. In the debate on the industrial relations legislation we saw 300 amendments written like that, and they were debated and voted on within 40 minutes. They are not amendments you can read; you really do have to sit down with the bill and insert those amendments one by one. To receive this sort of amendment two hours before a debate when the legislation is clearly contentious for large sections of the industry not only does not allow the opposition—or the government, for that matter—to seriously consider the amendment but also does not allow any debate by or feedback from the industry that will be affected by this bill.

It is extraordinarily arrogant of this government. Lately we have seen a lot of inability on the part of the government, in spite of knowing sometimes for years that legislation is to be introduced, to consult fully with industry or to give anybody a chance to provide appropriate feedback on bills being debated in this House. As members of parliament, we can all fool ourselves into believing that we know best. Occasionally maybe we do, but nobody knows as well as a group of people putting their views together to find the best outcome.

The opposition also calls on the government to reduce Australia’s dependency on foreign oil and to promote existing alternatives like liquefied petroleum gas, ethanol and biodiesel, emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity, and future fuels such as hydrogen. Under this government Australia is a country without a national goal on energy. We on this side of the House believe that a strategy must be developed. We need leadership on this issue. We need national leadership to develop the natural talent for innovation that Australia has in existing areas such as liquefied petroleum gas, ethanol and biodiesel, to explore emerging alternatives such as compressed natural gas—one of the great natural assets of Australia—liquid fuel from gas and stored electricity, and to explore future fuels such as hydrogen. We also need to develop the technologies and techniques to make all this happen. We need a serious investment, a serious plan and a serious commitment to finding alternatives to fossil fuels. We must make Australia less reliant on foreign oil, which affects our trade deficit, creating foreign debt. By developing alternative fuels, we place Australia in a very good position to export to the world.

We also condemn the government for ignoring the impact of rising petrol prices on Australian families. We see it in all our electorates. The increase in petrol prices is clearly hurting Australian families, who on average are spending around $10 per week extra on unleaded fuel compared to just a few months ago. Since January, the average cost of unleaded petrol has increased nationally by 22 per cent. The $138 million increase confirms the reason that consumer sentiment has fallen by 13.3 per cent. A family that drives a 2000 model Holden VT Commodore is paying an estimated $18 extra per week, while a 1999 Ford AU Falcon Futura costs $16 more to run per week and a Mitsubishi costs $13 extra to run per week.

I recently visited a school and was talking to some grade 5 and grade 6 children. I had been there for about an hour and they were asking all the usual questions about whether I fly or drive to Canberra—all the really important questions that children ask of politicians and that we have all experienced. One of them asked me about my car and I explained that it is provided as part of my salary. This little boy said, ‘Do you pay for your petrol?’ I said, ‘No, I don’t; it’s paid for as part of my package.’ The entire group of children took in a collective breath in shock and outrage that I was somehow exempted from the pain of petrol prices that even grade 5 and grade 6 kids understand. Grade 5 and grade 6 children know that their families are suffering because of the price of petrol. I know some members have been in this House for a very long while and have not handed over their cash at a petrol pump for many years, but Australian families are and they are doing it more frequently and paying more for it than ever before.

We also condemn the government for failing to strengthen the Trade Practices Act to protect competition in the petroleum industry. Labor has been talking for many years about the need to strengthen the Trade Practices Act to protect small business from unfair competition from megacompanies. In the petrol industry it could not be more important than it is now. The government has been extremely slow in acting in this area. We have been calling for it for quite some time—it has been part of our policy at each election—and it is desperately needed not just in this industry but in many others as well. Finally, we condemn the government for failing to guarantee that the money saved as a result of the abolition of the Fuel Sales Grants Scheme will be specifically directed to roads in regional, rural and remote Australia.

In summary, there is some good work in this bill. To some extent it does simplify some extremely complex arrangements. It phases in taxes on alternative fuels. Labor has been arguing for some time that these taxes not be introduced rapidly but rather phased in over time. The phasing in and out of the other regimes does provide some opportunity for businesses to respond and to build these changes into their cost structures. We are disappointed that the government has not found a real solution to the problem for small to medium enterprises caused by the claiming of credits through the BAS system rather than up front. We urge the government to seriously consider that problem and refer the matter to a Senate committee for further consideration.

We also urge the government to take seriously the opposition’s calls for a much stronger debate on energy in Australia—one that actually canvasses all the options and not just the furphy of nuclear power. There are many other alternatives for Australia. We have an abundance of sun, wind, natural gas and coal. The opportunities for this country in those areas are quite extraordinary. In our people, our skill and our natural resources we have a talent in those areas, and we should be exploring those to the full.

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