Mr HUNT (Parliamentary Secretary to the Minister for the Environment and Heritage) (9:18 AM) —I move:

The tariff proposals which I have just tabled contain alterations to the Excise Tariff Act 1921 and the Customs Tariff Act 1995. Excise Tariff Proposal No. 1 (2005) and Customs Tariff Proposal No. 5 (2005) formally place before parliament proposed decreases in the excise and customs duty rates applied to aviation turbine fuel and aviation gasoline.

The current rate of aviation turbine fuel is $0.03151 per litre and the current rate of aviation gasoline is $0.03114 per litre. These rates comprise two elements. One element is provided to the Civil Aviation Safety Authority and the second element is used to fund the Location Specific Pricing Subsidy provided to Airservices Australia.

The purpose of the location specific pricing subsidy was to limit the effect of location specific pricing at smaller airports where low traffic volume limits the ability to meet the real cost of air traffic control services.

In the 2004-05 budget, the government announced that it would continue the location specific pricing subsidy until 30 June 2005 to enable Airservices Australia to move towards longer term pricing arrangements for providing terminal navigation services. The announcement also indicated that the location specific pricing subsidy would continue to be funded from revenue collected from excise and customs duty on aviation fuels up to 31 October 2005 to ensure full cost recovery.

Consequently, the government is proposing to reduce the excise and customs duty rates applied to aviation gasoline and aviation turbine fuel, with effect from 1 November 2005. The excise and customs duty rates on aviation gasoline are proposed to fall by $0.0026 per litre, and the excise and customs duty rates on aviation turbine fuel are proposed to fall by $0.00297 per litre. As a result, the excise and customs duty rates on both fuels are proposed to be equalised at $0.02854 per litre.

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 Edwards) adjourned.