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Thursday, 22 June 2006
Page: 172


Senator ALLISON (Leader of the Australian Democrats) (6:28 PM) —Parliamentary Secretary, I think in answer to my question, you said—to paraphrase it—that there would be no disadvantage to biodiesel producers until 2010. We understand that it is 2111 when the excise starts to kick in effect, but is it not the case that the Energy Grants (Credits) Scheme also reduces from 2007 to the point where the advantage to biodiesel starts to diminish after next year? Assuming that the gate price was $1.25 for biodiesel, which is one of the examples that was given to the committee in the tables provided, and the comparative gate price of diesel was $1.32, what happens under your legislation is that diesel gets a fuel tax credit of, effectively, 18c a litre—a 38c excise credit minus 20c for the road user charge—so the final price of diesel on 1 July would be $1.14.

Sitting suspended from 6.30 pm to 7.30 pm


Senator ALLISON —I think I was midway through asking a question of the minister on the figures which, as I have said many times, are very complex and I understand the difficulty in understanding them. At the present time, diesel with a gate price of, say, $1.32—which I gather might not be today’s price but has been the price in recent times—from 1 July will enjoy a fuel tax credit of 38c less the 20c road user charge. That would result in a final price of $1.13. This is for on-road use of diesel. If we then talk about biodiesel by comparison, on 1 July with a gate price which I also understand to be fairly typical of $1.25, it will have a fuel tax credit of zero because the cleaner fuel grant has offset the fuel tax credit. It also gets an Energy Grants (Credits) Scheme rebate of 14.8c a litre. Can the minister confirm that to begin with? Is that scenario correct?