Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

CUSTOMS TARIFF AMENDMENT (TOBACCO DUTY HARMONISATION) BILL 2017

This bill will increase the excise equivalent customs duty imposed on roll your own tobacco to align it with the rate applied to cigarettes.

Consistent with the cognate Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017, the rate adjustment will correct a disparity in the tax treatment of cigarettes and roll your own tobacco.

To correct the disparity, this bill will adjust the per kilogram tobacco duty rate to reflect the new assumption that the average cigarette contains 0.7 grams of tobacco and not 0.8 grams of tobacco as applies under the current rate.

This adjustment, to be made over four years, will make sure the Government taxes tobacco more equally, regardless of its form.

Full details of the measure are contained in the explanatory memorandum.

EXCISE TARIFF AMENDMENT (TOBACCO DUTY HARMONISATION) BILL 2017

This Bill will increase the excise imposed on roll your own tobacco to align it with the excise rate applied to cigarettes.

The Bill will phase in the rate adjustment over four years to match the timing of existing excise increases. The first adjustment to the roll your own tobacco excise rate will occur on 1 September 2017.

The rate adjustment will correct a disparity in the treatment of cigarettes and roll your own tobacco. This disparity exists because there are two excise rates that apply to tobacco, a stick rate which is applied to manufactured cigarettes with 0.8 grams or less of tobacco per cigarette and a per kilogram rate which is applied to all other tobacco products, including roll your own tobacco and most cigars.

The stick rate simplifies the taxation of cigarettes and reduces compliance costs. Consequently, cigarettes have excise imposed at the same rate regardless of their tobacco content, as though they contain 0.8 grams in tobacco.

However, the average cigarette contains less than 0.8 grams of tobacco, which means the Government imposes excise on the average cigarette at a higher rate than roll your own tobacco.

To correct this disparity, this Bill will adjust the per kilogram tobacco excise rate to reflect the new assumption that the average cigarette contains 0.7 grams of tobacco.

This adjustment, to be made over four years, will make sure the Government taxes tobacco more equally, regardless of its form.

A cognate Bill, the Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017, will increase the excise equivalent customs duty on roll your own tobacco.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.