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Thursday, 23 September 1999
Page: 10421


Ms O'BYRNE (4:33 PM) —The diesel fuel rebate returns to certain business all or part of the diesel excise they pay on diesel fuel used in their business operations. As from 1 February 1999, the excise on diesel fuel was 43.355 cents per litre. Forestry, along with agriculture and fishing, was included in the category of primary production. The rebate applicable to primary production was 35.027 cents per litre. The effective rebate rate was 35/43.

The Taxation Laws Amendment Bill (No. 9) 1999 seeks to redress the failure of this government to ensure the diesel fuel rebate is extended to forestry operations. The government's previous position outlined by the Prime Minister in late May indicated that `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'. This ensures a full credit or a 100 per cent rebate for those nominated areas.

Changes to the diesel fuel rebate were contained in the Customs and Excise Amendment (Diesel Fuel Rebate) Act 1999. Subsection 5AAA allows for the declaration of different rates for the use of diesel fuel in forestry. The declared rate was set at 35/43 of the rate declared for use of diesel fuel in primary production other than forestry, or as Senator Lees puts it:

We have increased the costs by 8 cents per litre for forestry. It is probably not something that we should point out to the National Party but there it is.

This position would have meant that forestry and timber processing industries would have been required to pay substantially more for off-road users of fuel than other agricultural industries, despite the historical equity in the area of primary production. This position was greeted with harsh criticism from the industry and workers.

It is at this point that we start to see the unravelling of the Democrat-government deal on diesel fuel rebates because the minister claims that there was never an intention to give a lesser diesel fuel rebate to the forestry industry, that it was indeed an `inadvertent consequence'—an inadvertent consequence that Senator Lees was happy to claim as an achievement. The minister claims that `the intention of the government was always that these industries would receive the same rebate amount'. The Minister for Agriculture, Fisheries and Forestry supports the claim that the impact was unintentional and in fact that the government always wanted to extend this concession to forestry.

The Democrats claim that the decision to exclude forestry was deliberately negotiated with the coalition, a position the government no longer subscribes to. In fact, according to a report in the West Australian regarding any modification to the government's position, Senator Allison of the Democrats said `that the move meant that Mr Howard was reneging on an integral part of the deal made to secure Democrat support'. So we have the option of four possible truths before us. Did the minister pay so little regard to his portfolio area; was he so unconcerned about the future of the forestry industry that he did not even notice his government's failure to treat them as any other agricultural industry; was he always planning to renege once the government had its way and pay no regard to the negotiations with the Democrats; or was he prepared to gamble timber workers' jobs to get the GST through? After all, the minister admitted in an interview on 14 July that he had `anticipated that they'—the Democrats—`would not agree to this particular change being made'.

I am afraid that none of these options inspire confidence in either the operations or the integrity of this government. All we can see is incompetence, dirty deals and blatant disregard. This government, however, have achieved one thing with this debacle, but I am afraid the minister may also have to refer to this as an `inadvertent consequence'. They have said to timber workers, `There are other areas of so much importance that we will let you hang while we ensure passage of other legislation.' They have signified their willingness to take a risk on this issue but hasten to assure workers: `Don't worry because we never meant it, anyway.' The big question is how much of this process the Democrats were aware of. Did they agree to exempt forestry, with the full expectation that the matter would be redressed? Were they misled into believing the government supported their position?

The Democrats have not proven to be skilled negotiators with this government. They walked into the negotiation room with firm commitments to the electorate regarding the GST in hand and they threw them away. One wonders if they even put up a fight. They fell over then, but did they fall over this time? If they did not, they must find this bill very disturbing because it shows exactly what their deals are worth. What this deal has shown is that even when they take a stand they have no capacity to enforce it. The government is not bound by their agreements. In fact, their deals have been labelled `inadvertent consequences' and as such can be amended at will. The government's escape clause? `We didn't mean it.'

This bill will ensure that the full rebate will now be payable for fuel purchased for eligible forestry activities from 1 July 2000 in line with the rebate for agriculture. Its practical application will be welcomed by timber industries and workers. However, it illustrates to the Australian community so much more. What this whole episode indicates is that there are many questions to be asked about the credibility of this government's deal with the Democrats. It depicts a sad story of incompetence, dirty deals and blatant disregard. I fear the Australian people are, and will continue to be, the victims.