Mr HOCKEY (Minister for Financial Services and Regulation) (12:51 PM) —I appreciate the contribution to the debate from all of the members who spoke on the Excise Tariff Amendment Bill (No. 1) 2001 and the Customs Tariff Amendment Bill (No. 2) 2001. I would like to clarify two misconceptions about this debate. The first is that this is perceived as an attempt to link the petrol excise reduction with any change in beer excise.

Mr Crean —Call it blackmail. Call it what it is.

Mr HOCKEY —No-one is listening to you, Simon. The first thing the bill covers is aviation kerosene. This was announced in the 2000-01 budget and took effect from 13 May 2000, so that is nearly a year ago. The second initiative is in relation to alcoholic beverages, where Labor's 37 per cent wholesale sales tax is being replaced with the changes to the excise and the GST. The third area is in relation to petroleum products, which is the ANTS commitment and reduces the excise on unleaded petrol, leaded petrol and diesel by around 6.7c per litre.

The fourth area is product stewardship in relation to oil. This is a technical measure which increases from two to five the number of decimal places in the excise rates for products dutiable under the product stewardship oil arrangements. The fifth initiative is in relation to the fuel tax reduction. This measure gives effect to the Prime Minister's announcement on 1 March of this year that the rate of excise on unleaded petrol, leaded petrol and diesel would be reduced by a further 1.5c per litre from 2 March 2001, and the duty on aviation fuels and other fuels attracting concessional rates of duty are reduced by proportional amounts.

The first furphy put forward by the member for Hotham is addressed there. This is not just about two particular issues in relation to excise. It actually covers a number of excise initiatives. The second furphy—and this is one that the member for Hotham has traded on for an extensive period—is that it applies to all beer sold. That is plainly wrong. What the member for Hotham has been claiming publicly is that most beer being sold in Australia is draught beer—over-the-counter beer. That is wrong. Most beer sold in Australia is bottled beer and packaged beer. In an amendment under the ANTS package that went up by 1.9 per cent. The reason draught beer went up more was because of the service component associated with draught beer. Obviously, when you are in a pub there is a service component associated with the person standing behind the bar. There is a service component associated with people cleaning the tables. There is a service component associated with going into a pub and sitting at a table, or into a registered club—whatever the case may be.

I know it is very difficult for the member for Hotham to get his mind around something so hard to understand, which is the fact that there is a service component associated with draught beer, but only 25 per cent of beer sales in Australia are draught beer. In that instance it is quite obvious that the majority of beer sold in Australia does not have a service component. Therefore, the allegations being made by the Labor Party about beer are incorrect.

A third key factor, which has been lost in the debate, involves the way people are meant to pay for these excise changes. They are able to pay for them because of the fact that we reduced income tax. Eighty per cent of Australians are paying no more than 30 cents in the dollar in income tax, so they have more than enough money left over in order to compensate for these increases.

The Labor Party are engaging in a debate full of rhetoric with very few facts coming from their side of the table. It is disappointing that the Labor Party are seeking to deceive the Australian people with their factless rhetoric about beer and petrol. The government will be supporting the bills, obviously. We have not seen the additional proposed amendments from the member for Hotham so I cannot express an opinion on those amendments at this stage. If the member for Hotham really wanted to have an informed debate about this, perhaps he would have given us a copy of the proposed amendments. Unfortunately, the member for Hotham is all about gas and not much action.

Question resolved in the affirmative.

Bill read a second time.