Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 14 May 1987
Page: 3249


Mr BARRY JONES (Minister for Science and Minister Assisting the Minister for Industry, Technology and Commerce)(5.21) —I move:

That the Bill be now read a second time.

This Bill proposes amendments to the Customs Act and Excise Act to implement three of the measures announced by the Treasurer (Mr Keating) in the Government's May statement. They are:

(i) The payment of customs duty by Commonwealth authorities;

(ii) The imposition of a $200 fee on applications for a refund of customs duty; and

(iii) New arrangements to strengthen the diesel fuel duty rebate system.

I propose now to outline only briefly the salient features of the Bill. Full details are contained in the explanatory memorandum which is about to be circulated and the Australian Customs Service will be issuing administrative detail in the next few days. It might serve the needs of calming a frenzied House if I provide the explanatory memorandum straight away. The proposal to require Commonwealth authorities to pay customs duty in clause 6 stems from the Government's acceptance of the recommendation of the Committee of Review on Government High Technology Purchasing Arrangements. The Committee concluded that the concession of duty free entry of imports granted to most Commonwealth agencies leads to economic distortions and promotes a loss of allocative efficiency for the whole economy. Commonwealth authorities currently exempt from payment of customs duty will be required to pay duty on all imports from 1 July 1987.

The $200 fee for refund applications in clause 7 is proposed to recover the costs involved in processing refund applications after 13 May 1987. The Australian Customs Service receives thousands of such applications yearly many of which are time consuming as they involve a complicated assessment and examination of goods. The Government expects, however, that persons will be able to avoid the charge by making sure that the correct duty is paid when entering their goods for home consumption. The question of a refund application will then not arise. Provision is made for the regulations to specify the circumstances in which the fee will not be charged. Such circumstances will only relate to those beyond the control of the importer.

In relation to the changes to the diesel fuel rebate arrangements as set out in Parts II and III of the Bill I should mention that most of these were recommended in an efficiency scrutiny review. The scrutiny is the first major review of the administration of the scheme since it was introduced in 1982. The Government has accepted the scrutiny conclusion that a greater onus should be placed on rebate claimants to substantiate their claims. The rebate scheme relies heavily upon the self-assessment of eligible usage of diesel fuel by claimants.

The measures proposed in the Bill are designed to effect a greater degree of certainty to the estimation process. Additionally as outlays under the scheme in 1987-88 will be in a vicinity of $500m we believe it not unreasonable to require persons who are receiving this benefit from the public purse to provide sufficient information to substantiate their claims. Consistent with the requirement for person to substantiate their claims we will now require more information to be provided about claimants operation and the methodology used to calculate eligible usage of diesel fuel. The regulations proposed under clause 8 of the Bill will include such requirements.

Other important changes to the diesel fuel rebate arrangements involve:

(a) A provision to permit a reduction in the amount of rebate claimed if satisfactory details are not produced;

(b) The averaging of the rate of rebate because of continual fluctuations in the duty rates as a result of import parity price changes; and

(c) The introduction of an `on the spot' penalty system providing, as an alternative to prosecution, a penalty of three times the amount of rebate wrongfully obtained.

The new rebate arrangements will come into force by proclamation. this is to allow time for the necessary administrative arrangements and regulations to be put in place.

Financial Impact

The changes relating to the rebate on diesel fuel will enable savings to be achieved in two ways. In direct costs associated with administration and in rebate outlays it is estimated that savings in the order of $6m will accrue in a full year. The imposition of duties of customs on Commonwealth authorities is expected to result in an increase in revenue of $75m per annum or about $225m in the next three years. The processing fee of $200 for refund applications is estimated to raise about $6m in a full year. This figure is based on an estimate of the number of refund applications that will be lodged per annum even though a fee is to be charged. Additionally it is estimated that applications for refunds of duty that will now not be made because of the imposition of the $200 fee will involve about $1.1m in refunds of duty forgone by applicants. I commend the Bill to the House.

Debate (on motion by Mr Downer) adjourned.