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Thursday, 23 September 1999
Page: 10381

Mr KELVIN THOMSON (1:12 PM) —I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the Bill a second reading the House condemns:

(1) The Prime Minister for attempting to deceive the Australian public by announcing a policy concerning diesel fuel rebate for the timber industry in his media release of 31 May 1999 and then reneging on that policy commitment less than three months later;

(2) the Deputy Prime Minister for claiming the House on 28 June 1999 that the cut in the diesel fuel rebate was as a result of the deal with the Democrats when the Government now claims that that decision was a mistake;

(3) the Minister for Forestry and Conservation for not protecting the interests of the timber industry and allowing its access to the diesel fuel rebate scheme to be traded off with the Democrats in securing the deal to pass the GST".

There is a mystery for the unravelling here. I do not know if we have a great deal in the way of investigative journalism these days, but it is certainly there for anyone who is interested in it, and the likes of Agatha Christie would take a great deal of interest in it indeed. I invite the House to consider the history of this matter and to have a look closely at what has happened. The Taxation Laws Amendment Bill (No. 9) 1999 proposes to undo one aspect of the deal done between the Prime Minister and the Democrats to secure passage of the GST, namely, the reduction of the amount of diesel fuel rebate eligible for forestry operations. This will increase the amount of the rebate by 100 per cent for forestry operations.

By way of background, the Diesel Fuel Rebate Scheme returns to certain businesses—such as mining or primary production—all or a proportion of the diesel excise that they pay on diesel fuel used in their business operations. The rebate applies only to these off- road uses, presumably because of the historical link to excise and road funding.

The Prime Minister announced in a media release on 31 May this year the following change of policy regarding the GST package, which had proposed to extend the off-road uses of diesel which would qualify under the Diesel Fuel Rebate Scheme. I quote:

Off-road Diesel and Like Fuels

The extension to the off-road concession for diesel and like fuels will be limited to providing full credits for marine use, bush nursing homes, hospitals, nursing homes, aged persons homes and private residences, but not for construction, power generation, manufacturing or forestry. The proposed full credit for mining currently accessing the DFRS will be maintained.

The government then followed up this announcement by introducing the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999 which was passed by the Senate on 28 June. This bill specifically limited the amount of rebate to 35/43 of diesel used in forestry—not a full rebate at all. The amount was expressly limited in this legislation to 35/43 . Minister Anderson commenced the second reading speech by stating that the bill:

. . . implements changes to the Diesel Fuel Rebate Scheme agreed with the Australian Democrats as part of the package of environmental measures that will now accompany the introduction of the new tax system on 1 July 2000.

Subsequently, the minister at the table, Minister Tuckey, claimed that the legislation was a mistake, and that the government did not intend to reduce the rate of rebate to forestry.

Mistake, my foot. It is quite clear from the legislation that was introduced into the Senate in June 1999 that it was the government's intention to limit the rebate to 35/43 diesel used in forestry. A mistake is the sort of thing we were considering earlier in the legislation to do with regulatory levies in superannuation—where the government introduced a regulation and then found that it offended against the Acts Interpretation Act and therefore had to come into the House with a bill. That is a mistake. This is not a mistake; this is something else altogether.

The issue to be determined here is: should we support forestry being treated in the same manner as other off-road industrial users of diesel or should the current limitation of 35/43 remain? The case in support of the legislation is that it has the support of the relevant industry organisations such as the National Association of Forestry Industries. This association argues that it merely restores the parity between forestry and other primary industries and that there is no case for their industry to be discriminated against. I think that is a fair argument. This legislation also has the support of relevant unions. Labor has always treated forestry operations like all other forms of primary production for the purposes of the Diesel Fuel Rebate Scheme. That is to say, it has always been eligible for a 100 per cent rebate, so supporting this bill is consistent with that situation. Opposition to this bill would involve a change to policy on our part.

The case against the legislation can be summarised briefly: the environment movement do not support logging in native forests, they certainly do not support any public subsidisation of that activity, and they see the Diesel Fuel Rebate Scheme for forestry as a subsidy in that context.

The other relevant aspect of the legislation that we should consider is the question of whether we facilitate the government's reneging on its public commitments. Opposing the bill would amount to holding the government to its public commitments. As I have indicated, on balance, the argument that there ought to be parity between forestry and other primary industries in relation to the Diesel Fuel Rebate Scheme is a compelling and reasonable argument, and we are not going to oppose the legislation.

I think it is extraordinary that the Democrats have so far sat absolutely mute while the government has reneged on a deal which was an aspect of the agreement with the Democrats to secure the passage of the GST. That strikes us as absolutely extraordinary and, on that basis, there is a case for this legislation to be referred to a Senate legislative committee which could look at the deal making process between the government and the Democrats on the GST. I think there would be considerable public interest in some of the questions being asked.

We have to ask ourselves, `Just how weak are the Democrats in their present mode? Where are the Democrats?' They have disappeared completely on these sorts of questions. Their deal with the government on the environmental consequences of the GST generally was appalling. They cooperated with the government in the passage of legislation for the government to be able to devolve some of its national responsibilities to the environment back to the states. Their position on these matters has been entirely unsatisfactory.

The financial impact of this proposal has not been disclosed by the government; the explanatory memorandum states that the cost is nil. We think, in fact, that it would cost tens of millions of dollars, and we would be interested to hear any further information the government can provide in relation to this matter. We will not be opposing the second reading. We do, however, think that a substantial fraud has been perpetrated on somebody if the government and the Democrats can say, `We have a deal on the GST, and we have associated elements of the environmental package with it. One of them is the reduction of the diesel fuel rebate for forestry operations.' Now the government comes back into the parliament and says, `No, the diesel fuel rebate for forestry is going to be 100 per cent,' completely contradicting the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999, which they introduced and passed in the Senate as recently as 28 June 1999.

Mr DEPUTY SPEAKER (Mr Mossfield) —Order! Is the amendment seconded?

Mr Martyn Evans —I second the amendment and reserve my right to speak.