Download WordBills Digest No. 61 1999-2000
Taxation Laws Amendment Bill (No. 9) 1999
Warning:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal stat us. Other sources should be consulted to determine the subsequent official status of the Bill.
Contents
Passage History
Taxation Laws Amendment Bill (No. 9) 1999
Date Introduced: 2 September 1999
House: House of Representatives
Commencement: Immediately after the commencement of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999, i.e. from 1 July 2000.
Purpose
To ensure that the diesel fuel rebate rate applying to eligible forestry activities is aligned with the rate applying to other primary production activities.
Background
Prior to the agreement between the Government and the Democrats on the modified diesel fuel rebate scheme (DFRS), the rebate for eligible activities was the same across all primary production (agriculture, forestry and fishing).
The relevant part of the Government / Democrat agreement states:
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, aged persons homes and private residences but not for construction, power generation, manufacturing or forestry. (emphasis added).(1)
This meant that forestry would not get the 100 per cent rebate ('f ull credit') that marine etc use will receive. No mention was made of agriculture. No details were provided as to the rates of rebate that would apply to the activities that would not receive the 100 per rebate.
The changes to the DFRS were implemented t hrough the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 . Subsection 5AAA of that Act states that:
A declaration … may declare different rates for
- (a) use of diesel fuel in primary production other than forestry; and
(b) use of diesel in forestry.
However, the rate declared for use of diesel fuel in forestry must be 35/43 of the rate declared for use of diesel fuel in primary production other than forestry.
The effect of this legislation was that the parity between the primary product ion sectors was broken, with forestry receiving only 81.4% (i.e. 35/43) of the rebate applicable to the other sectors. This effect seemed to be confirmed in the second reading speech
The full rebate will be extended to…agriculture, fishing and mining…currently they do not receive a full rebate. Forestry will continue to have access to the rebate in the proportion it currently receives.(2)
The move created concern within the forestry peak body, the National Forests Industry Association, who described it a s creating a ' significant disincentive to investment'(3) in the forest sector.
However, the Government has now said that it always intended the forestry and timber processing industries would receive the same rebate amount as other primary production indus tries(4) and has introduced the Taxation Laws Amendment Bill (No. 9) to correct the situation.
Main Provisions
Item 1 of Schedule 1 repeals subs 164(5AAA) and (5AAB) of the Customs Act 1901 . These subsections were inserted by the s ubsection 5AAA Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 referred to in the background of this digest.
Item 2 of Schedule 1 repeals subs 78A(5AAA) and (5AAB) of the Excise Act 1901 . These subsections were also inserted by the s ubsection 5AAA Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 referred to in the background of this digest.
The effect of these changes will be to repeal the differential rate between forestry and other primary production sectors imposed by s ubsection 5AAA of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 .
Endnotes
1. Prime Minister's We bsite, 'Changes to the Goods and Services Tax' http ://www.pm.gov.au/media/pressrel/1999/changes3105.htm
2. The Hon. John Anderson, House of Representatives, Debates , 22 June 1999
3. NAFI Website, 'GST and Diesel Fuel Excise Rebate' NAFI News, July/August 1999 http://www.nafi.com.au/newsletter/1999-08/
4. The Hon Wilson Tuckey, House of Representatives, Debates , 2 September 1999
Contact Officer
Angus Martyn and Richard Webb
16 September 1999
Bills Digest Service
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