Senate debates
Monday, 19 June 2006
Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006; Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006; Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006; Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006
In Committee
12:55 pm
Andrew Murray (WA, Australian Democrats) Share this | Hansard source
by leave—I move Democrats amendments (1) to (4) on sheet 4949 revised, and the request sheet:
(1) Schedule 1, item 30, page 6 (lines 12 to 16), omit the item, substitute:
30 The Schedule (definition of Brandy)
Repeal the definition.
(2) Schedule 1, item 32, page 6 (lines 19 to 22), omit the item.
(3) Schedule 1, item 35, page 7 (lines 7 to 13), omit the item, substitute:
35 The Schedule (definition of Other Excisable Beverage)
Repeal the definition, substitute:
other excisable beverage means any beverage containing more than 1.15% alcohol by volume, but does not include:
(a) beer; or
(b) wine.
(4) Schedule 1, item 45, page 8 (line 12) to page 15 (before line 1), omit the item, substitute:
45 The Schedule (table)
Repeal the table, substitute:
Excise duties | |||
Item | Subitem | Description of goods | Rate of Duty |
1 | Beer | ||
1.1 | Beer not exceeding 3% by volume of alcohol packaged in an individual container not exceeding 48 litres | $31.73 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.2 | Beer not exceeding 3% by volume of alcohol packaged in an individual container exceeding 48 litres | $6.33 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.5 | Beer exceeding 3% but not exceeding 3.5% by volume of alcohol packaged in an individual container not exceeding 48 litres | $36.98 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.6 | Beer exceeding 3% but not exceeding 3.5% by volume of alcohol packaged in an individual container exceeding 48 litres | $19.89 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.10 | Beer exceeding 3.5% by volume of alcohol packaged in an individual container not exceeding 48 litres | $36.98 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.11 | Beer exceeding 3.5% by volume of alcohol packaged in an individual container exceeding 48 litres | $26.03 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.15 | Beer not exceeding 3% by volume of alcohol produced for non-commercial purposes using commercial facilities or equipment | $2.22 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
1.16 | Beer exceeding 3% by volume of alcohol produced for non-commercial purposes using commercial facilities or equipment | $2.58 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
2 | Other excisable beverages not exceeding 10% by volume of alcohol | ||
2.1 | Other excisable beverages not exceeding 3% by volume of alcohol packaged in an individual container not exceeding 48 litres | $31.73 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
2.5 | Other excisable beverages exceeding 3% but not exceeding 3.5% by volume of alcohol packaged in an individual container not exceeding 48 litres | $36.98 per litre of alcohol calculated on that alcohol content by which the percentage by volume of alcohol of the goods exceeds 1.15 | |
2.21 | Other excisable beverages not elsewhere included not exceeding 10% by volume of alcohol | $36.98 per litre of alcohol | |
3 | Spirits; Other excisable beverages exceeding 10% by volume of alcohol | ||
3.1 | Other excisable beverages exceeding 10% by volume of alcohol | $62.64 per litre of alcohol | |
3.5 | Spirit that: | Free | |
(a) a person has an approval, under section 77FD of the Excise Act 1901 , to use for fortifying Australian wine or Australian grape must; and (b) is otherwise covered by the approval | |||
3.6 | Spirit that: | Free | |
(a) is for use by a person who is included in a class of persons determined under section 77FE of the Excise Act 1901 ; and (b) if a quantity is specified in a determination under that section in relation to the person—does not exceed that quantity; and (c) is for an industrial, manufacturing, scientific, medical, veterinary or educational purpose | |||
3.7 | Spirit that: (a) a person has an approval, under section 77FF of the Excise Act 1901 , to use for an industrial, manufacturing, scientific, medical, veterinary or educational purpose; and (b) is otherwise covered by the approval | Free | |
3.8 | Spirit denatured according to a formula determined under section 77FG of the Excise Act 1901 , other than spirit for use as fuel in an internal combustion engine | Free | |
3.10 | Spirits not elsewhere included | $62.64 per litre of alcohol | |
5 | Tobacco, cigars, cigarettes and snuff | ||
5.1 | In stick form not exceeding in weight 0.8 grams per stick actual tobacco content | $0.23259 per stick | |
5.5 | Other | $290.74 per kilogram of tobacco content | |
10 | Goods as follows: | ||
(a) petroleum condensate and stabilised crude petroleum oil for use otherwise than: (i) in the recovery, production, pipeline transportation or refining of petroleum condensate or stabilised crude petroleum oil; and (ii) as feedstock at a factory specified in a licence granted under Part IV of the Excise Act 1901 ; (b) topped crude petroleum oil; (c) refined or semi-refined liquid products derived from petroleum, other than such products for use (other than in an internal combustion engine) in refining petroleum condensate or stabilised crude petroleum oil; (d) liquid hydrocarbon products derived through a recycling, manufacturing or other process; (e) denatured ethanol for use as fuel in an internal combustion engine; (f) biodiesel; (g) blends of 1 or more of the above goods (with or without other substances), other than blends covered by subsection 77H(1) or (3) of the Excise Act 1901 ; but not including the following: (h) goods classified to item 15; (i) waxes, liquefied petroleum gas and bitumen | |||
10.1 | Petroleum condensate | $0.38143 per litre | |
10.2 | Stabilised crude petroleum oil | $0.38143 per litre | |
10.3 | Topped crude petroleum oil | $0.38143 per litre | |
10.5 | Gasoline (other than for use as fuel in aircraft) | $0.38143 per litre | |
10.6 | Gasoline for use as fuel in aircraft | $0.02854 per litre | |
10.7 | Blends of gasoline and ethanol | The amount of duty worked out under section 6G | |
10.10 | Diesel (other than biodiesel) | $0.38143 per litre | |
10.11 | Blends of diesel and ethanol | The amount of duty worked out under section 6G | |
10.12 | Blends of diesel and biodiesel | The amount of duty worked out under section 6G | |
10.15 | Heating oil | $0.38143 per litre | |
10.16 | Kerosene (other than for use as fuel in aircraft) | $0.38143 per litre | |
10.17 | Kerosene for use as fuel in aircraft | $0.02854 per litre | |
10.18 | Fuel oil | $0.38143 per litre | |
10.20 | Denatured ethanol for use as fuel in an internal combustion engine | $0.38143 per litre | |
10.21 | Biodiesel | $0.38143 per litre | |
10.25 | Liquid aromatic hydrocarbons consisting principally of benzene, toluene or xylene or mixtures of them (other than goods covered by section 77J of the Excise Act 1901 ) | $0.38143 per litre | |
10.26 | Mineral turpentine (other than goods covered by section 77J of the Excise Act 1901 ) | $0.38143 per litre | |
10.27 | White spirit (other than goods covered by section 77J of the Excise Act 1901 ) | $0.38143 per litre | |
10.28 | Petroleum products (other than blends) not elsewhere included (other than goods covered by section 77J of the Excise Act 1901 ) | $0.38143 per litre | |
10.30 | Blends of 1 or more of the above goods (with or without other substances) not elsewhere included that can be used as fuel in an internal combustion engine (other than goods covered by section 77J of the Excise Act 1901 ) | The amount of duty worked out under section 6G | |
15 | Goods as follows, other than: (a) goods for use as a fuel; and (b) exempt oils and hydraulic fluids | ||
15.1 | Petroleum-based oils (including lubricant/fluid/oil products) and their synthetic equivalents but not greases | $0.05449 per litre | |
15.2 | Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as oils (including lubricant/fluid/oil products) but not greases | $0.05449 per litre | |
15.3 | Petroleum-based greases and their synthetic equivalents | $0.05449 per kilogram | |
15.4 | Petroleum-based oils (including lubricant/fluid/oil products and greases) and their synthetic equivalents, recycled for use as greases | $0.05449 per kilogram | |
20 | Stabilised crude petroleum oil, other than: (a) stabilised crude petroleum oil produced from a Resource Rent Tax area; and (b) exempt offshore oil | ||
20.1 | As prescribed by by-law | Free | |
20.2 | Delayed-entry oil | The delayed-entry oil rate that applies to the oil | |
20.3 | Pre-threshold onshore oil | Free | |
20.5 | New oil | Free, or, if higher, the amount of duty worked out under section 6C | |
20.6 | Intermediate oil | Free, or, if higher, the amount of duty worked out under section 6D | |
20.7 | Other | Free, or, if higher, the amount of duty worked out under section 6B | |
21 | Condensate produced in a State or Territory or inside the outer limits of the territorial sea of Australia other than condensate produced from a prescribed source | Free | |
Statement pursuant to the order of the Senate of 26 June 2000—
These amendments are framed as requests because the bills to which they relate are bills imposing taxation within the meaning of section 53 of the Constitution. The Senate may not amend a bill imposing taxation.
Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000
Under section 55 of the Constitution, bills for imposing duties of customs and bills for imposing duties of excise may deal with different goods, and increases in duties on some goods and decreases on duties on other goods may be contained in the same bill.
Where a bill contains both increases and decreases in duties, the Senate regards it as a bill imposing taxation within the meaning of section 53 of the Constitution. The Senate may therefore not make amendments directly to such a bill, and all Senate amendments must proceed by way of requests.
This is in accordance with the precedents of the Senate.
What these amendments do is propose several limited changes to the current excise laws on the taxation of excisable beverages below 10 per cent alcohol by volume, other than beer and brandy. These amendments directly relate to the Senate Economics Legislation Committee’s recommendation 3 in its report of June 2006 of its inquiry into the provisions of the Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and three related bills.
To remind the chamber, the committee recommended that the government apply the same tax and excise treatment to low- and mid-strength ready-to-drink alcohol products as it applies to similar strength beer products. The tax and excise structure for RTDs should incorporate the three-tiered structure that currently applies to beer, with the 1.15 per cent excise-free threshold that applies to beer extended to low- and mid-strength RTDs but not—note—to full strength, 3.5 per cent alcohol by volume and above, RTDs. These amendments fulfil exactly that recommendation.
I would expect that if the Treasury were to produce their own amendments they would be very much in this format. However, I am not expecting these to be agreed to by the government today simply because the government has not yet signalled its acceptance of the policy outlined by the committee, and a consultation process would no doubt be required. You would then ask, ‘Why am I moving these amendments?’ Firstly, I am moving them because I have previously moved amendments of this type and to confirm the strong support of my party for the introduction of a low-alcohol regime, which we think has extremely attractive health as well as good economic virtues attached to it.
I would note again the remarks I made in my speech during the second reading debate about how strongly this particular policy is supported by health professionals who study the effects of alcohol on our society. These issues were explored during the recent Senate Economics Legislation Committee inquiry into the Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and other related bills. I also intend to put these amendments on the record so that industry participants have a template which they can examine so that when they are considering these issues they can look at the effects of these amendments as they would be in legislation.
The purpose of the amendments is to provide taxation equivalence between the low- and mid-strength packaged, ready-to-drink alcohol products and packaged beer of similar content. The DSICA submission to the committee, like its submissions in past years, is a very detailed and thorough one. The DSICA submission estimated the cost to the revenue of this change as being around $2 million per year, so it does not have a high cost.
The amendments also provide an increase in excise duty on brandy from the current concessional rate to the same rate as all other full strength spirits. Not only is this an integrity measure in the sense of having like products taxed alike but I have not understood why that tax concession has been allowed to remain as part of government policy. The spirits industry—all its bodies—have long supported the ending of that concessional rate, despite the fact that they estimate the change will result in an additional $5 million revenue per year. I view the brandy amendment as having a twofold virtue. First of all, it ends an unnatural distinction between brandy and other spirits such as rum, whisky, vodka or gin. Brandy has an unnecessary concessional rate. The second virtue is that it would enable the revenue costs of $2 million per year to be paid for.
The amendments after the taxation treatment of two categories of alcohol beverages apply the existing 1.15 per cent alcohol by volume excise-free threshold that applies to beer to ready-to-drinks and it also applies the tiered taxation regime currently applicable to all beer products packaged in individual containers not exceeding 48 litres to other excisable beverages not exceeding 3.5 per cent alcohol by volume packaged in individual containers not exceeding 48 litres, which excludes beer. That is a longwinded technical way of saying that, effectively, this applies to low-and medium-alcohol products; it does not apply to high-alcohol products above 3.5 per cent alcohol by volume. The other thing is, as I have already mentioned, that it does increase the brandy excise rate to that of other excisable beverages exceeding 10 per cent alcohol by volume.
These items mirror those provisions which already apply to low-alcohol packaged beer and to mid-strength packaged beer and they would ensure that all remaining categories of ready-to-drinks would continue to be taxed at the current rate. In other words, those which are above 3.5 per cent alcohol by volume would not have their excise affected or changed in any way. With that somewhat technical motivation, I have moved those four items and the request attached.
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