Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (10:26 AM) —I move:

The excise and customs tariff proposals that I have just tabled contain alterations to the Excise Tariff Act 1921 and the Customs Tariff Act 1995.

Excise Tariff Proposal No. 3 (2002) and Customs Tariff Proposal No. 2 (2002) formally place before parliament changes to the acts to introduce new rates of excise and customs duty for certain beer. The changes affect both local and imported beer and commence on 1 July 2002.

The new rates will give effect to the government's decision to implement a national excise scheme for low-alcohol beer. The key feature of this scheme is the cessation of state subsidies for low alcohol beer, with assistance now to be delivered through lower excise rates. Equivalent duty rate changes will also be made in the customs tariff for imported beer.

The scheme will:

· replace a range of existing state subsidy schemes with a nationally uniform and administratively efficient concession in the rate of excise duty on low-alcohol beer;

· eliminate the requirement for wholesalers to lodge a claim for a rebate;

· reduce compliance costs for industry; and

· eliminate administration costs for the states.

The introduction of this scheme also provides an opportunity to remove an anomaly in the current excise rates that allows manufacturers to reduce their excise liability. Beer manufacturers have been able to reduce the amount of excise payable on locally produced beer by marginally increasing the alcohol content of the beer from 3.5 per cent to 3.6 per cent alcohol by volume. Reducing the excise duty rate of mid-strength packaged beer from $38.59 to $33.22 per litre of alcohol will counter this anomaly.

Equivalent duty rate changes will also be made in the customs tariff.

The scheme will result in a variety of pricing outcomes across the states with the price of low-alcohol beer expected to fall by up to eight per cent in some states. However, prices may increase marginally in some market segments. These increases are not expected to be significant for consumers as the price increase will be negligible or the market share of the affected products is quite small.

A summary of the alterations contained in these proposals has been prepared and is being circulated.

I commend the proposals to the House.

Debate (on motion by Mr Cox) adjourned.