Ian Macfarlane (Groom, Liberal Party, Minister for Industry, Tourism and Resources) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Australian automotive industry is recognised worldwide for its innovation, its quality standards and its expertise in design and engineering. The government provides significant support to the industry through the Automotive Competitiveness and Investment Scheme, ACIS. ACIS is a transitional assistance scheme which encourages the industry to become internationally competitive through investing in its own future at a time of phased tariff reductions. Through these arrangements, the government has provided the automotive industry with another decade of certainty, building on the five years of certainty it received under the first ACIS plan.

The participants in ACIS number about 250 and they include the four motor vehicle producers, automotive component producers, automotive toolmakers and automotive service providers. ACIS delivers assistance to participants through the issuing of duty credits and it will provide over $4 billion in assistance during the period from 2006 to 2015. This is an unprecedented assistance program of over $7 billion delivered to the industry in a well set out tariff reduction program which only occurs every five years, as distinct from the program of the Labor Party, who had an ad hoc method every year.

Assistance is provided up-front—that is, duty credits are issued on receipt of quarterly claims by a registered ACIS participant. A subsequent audit process ensures that claims are legitimate and that they relate to eligible expenditure. If items of ineligible expenditure or other errors are identified, an unearned credit liability (UCL) is issued to the participant and this is offset against their future ACIS credits.

A recent decision of the Administrative Appeals Tribunal has important implications for the Commonwealth’s ability to issue UCLs under the ACIS act, other than in very limited circumstances. That decision has raised the prospect that claims of participants may have to be fully assessed as to their eligibility prior to any credits being issued.

It would be unacceptable from a financial management perspective for the Commonwealth to be issuing credits unless it is certain that it has the ability to recoup any credits issued to which a participant is subsequently found not to be entitled.

The up-front assessment of all claims would result in lengthy delays in the issuing of duty credits—delays which could impose significant financial hardship on members of the automotive industry.

The industry has long accepted that the approach of issuing credits up-front then issuing UCLs should ineligible expenditure be identified is the best way for them to receive credits in a timely manner and the Commonwealth is keen to ensure that approach can continue.

This bill will confirm the Commonwealth’s ability to issue UCLs. It will ensure that the industry can continue to receive credits as soon as practicable after they submit their quarterly returns and it will ensure that the ACIS scheme can continue to be administered in the manner agreed by all parties when it was first established.

In summary, the amendments I am introducing today are designed solely to restore to the Commonwealth the power to administer the ACIS scheme in a manner that best meets the needs of the Australian automotive industry.

Debate (on motion by Mr Crean) adjourned.