John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

There are four bills before the chair at this stage. It is the intention that, as there are amendments to the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and the other bills are requests, we will be dealing with the bills separately. In other words, the other bills will be dealt with quite separately. So the first bill to be dealt with is the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

I table a supplementary explanatory memorandum relating to the government amendments to be moved to this bill. The memorandum was circulated in the chamber on 15 June 2006.

Barnaby Joyce (Queensland, National Party) Share this | Link to this | Hansard source

I would like clarification with regard to the 38c investment grant envisaged in a future bill that will be taken as a tax offset. Is that in any way dealt with in this bill? Obviously, there have been a number of queries brought to us, especially by people in the biodiesel industry who are collecting the investment grant. After 1 July this investment grant will be deemed as a tax offset; therefore, the people who purchase it off them will not be able to claim the diesel fuel rebate. I am pretty sure that it is not in this bill, but I just want to clarify that for the record so that I can get back to those people.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

That is dealt with in the other bill which will be dealt with later in the week.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

We will move now to the government amendments.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

by leave—I move government amendments (1) to (14) on sheet PF374:

(1)    Schedule 1, item 37, page 8 (line 15), omit “31 March”, substitute “30 September”.

(2)    Schedule 1, item 37, page 8 (line 17), omit “15 April”, substitute “15 October”.

(3)    Schedule 1, item 37, page 8 (line 17), omit “31 March”, substitute “30 September”.

(4)    Schedule 1, item 37, page 8 (line 18), omit “15 March”, substitute “15 September”.

(5)    Schedule 1, item 37, page 8 (line 18), omit “31 March”, substitute “30 September”.

(6)    Schedule 1, item 40, page 9 (line 5), omit “31 March”, substitute “30 September”.

(7)    Schedule 1, item 40, page 9 (line 6), omit “1 March”, substitute “1 September”.

(8)    Schedule 1, item 40, page 9 (line 7), omit “31 March”, substitute “30 September”.

(9)    Schedule 1, item 40, page 9 (line 9), omit “31 March”, substitute “30 September”.

(10)  Schedule 1, item 40, page 9 (line 11), omit “15 April”, substitute “15 October”.

(11)  Schedule 1, item 40, page 9 (line 12), omit “1 April”, substitute “1 October”.

(12)  Schedule 1, item 40, page 9 (line 17), omit “31 March”, substitute “30 September”.

(13)  Schedule 1, item 102, page 27 (line 22), omit “31 March 2007”, substitute “30 September 2006”.

(14)  Schedule 1, item 102, page 27 (lines 24 and 25), omit “is taken to continue in force under that Part until the end of 31 March 2007”, substitute “ceases to be in force at the end of 30 September 2006”.

John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

The question is that government amendments (1) to (14) be agreed to.

Question agreed to.

Bill, as amended, agreed to.

EXCISE TARIFF AMENDMENT (FUEL TAX REFORM AND OTHER MEASURES) BILL 2006

Andrew Murray (WA, Australian Democrats) Share this | Link to 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:

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.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

In relation to the requests, I put to the Senate a statement of reasons. Is it the wish of the committee that the statement of reasons accompanying the requests be incorporated in Hansard immediately after the requests to which they relate? There being no objection, it is so ordered.

Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Link to this | Hansard source

I did indicate in my contribution to the second reading debate that Labor would not be supporting Senator Murray’s amendments on the basis that, as was evidenced in the inquiry, we need to consider this issue as part of a much broader consideration of the whole alcohol regime.

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

As Senator Murray indicated he expected, the government will not be supporting the amendments. That is not to say that we are not interested in some of the issues he has raised. I am certainly aware that there is some interest, particularly in relation to low-strength RTDs. As a parent with three children between 18 and 25, I see a bit of that stuff go through the fridges at my place and at some of the parties my children attend. It certainly is an interest but I think best dealt with in the context of an overall alcohol debate, as has already been indicated by Senator Stephens. I indicate that there remains some interest within the government in addressing that as an issue, given the concern we have about alcohol use and particularly alcohol abuse.

I am aware of Senator Murray’s longstanding interest in this and I note some correspondence to the Treasurer going back to 2003 in relation to this and also to the matter of brandy. I have here some correspondence that the Treasurer, Mr Costello, has sent back to Senator Murray in relation to that, so I will not address those things particularly at this time but indicate that the government will not be supporting the amendments.

Question negatived.

Bill agreed to.

CUSTOMS AMENDMENT (FUEL TAX REFORM AND OTHER MEASURES) BILL 2006

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I move:

That the House of Representatives be requested to make the following amendments:

(1)    Schedule 2, item 4, page 6 (line 14) to page 8 (before line 1), omit the item, substitute:

4 Subsection 19(1) (table)

Repeal the table, substitute:

(2)    Schedule 2, page 10 (after line 15), after item 12, insert:

12A Schedule 3 (subheading 2208.20.10, the rate of duty in column 3)

Repeal the rate of duty, substitute:

5% and $62.64/L of alcohol

$62.64/L of alcohol

NZ/PG/FI/

DC/LDC/

SG

3% and $62.64/L of alcohol

DCS

12B Schedule 3 (subheading 2208.90.20)

Repeal the subheading, substitute:

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.

I do not intend to speak to these because the arguments have already been made. However, I merely add that the parliamentary secretary has obviously picked up on the fact that I am persistent and consistent in these matters, which is probably a sin as well as a virtue. I do feel strongly that we should promote low-alcohol products in this community.

The Temporary Chairman:

The question is that the requests be agreed to.

Question negatived.

Bill agreed to.

Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 reported with amendments; Excise Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006, Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006 reported without amendments or requests; report adopted.