Mr HOCKEY (Financial Services and Regulation) (9:52 AM) —I move:

That the bill be now read a second time.

The government recognises Australia's dependence on transport due to the vast size of our continent. In light of this, prior to the 1998 election, the government promised to substantially reduce the cost of our major transport fuels. Such reform would in turn reduce transport costs and consumer prices, especially in regional, rural and remote areas.

The recently enacted Diesel and Alternative Fuels Grants Scheme Act 1999 delivered this commitment. From 1 July 2000, certain on-road transport will be eligible for a grant under the scheme.

When the act was introduced by the Minister for Transport and Regional Services, he foreshadowed that a further bill would be introduced to put in place the necessary administrative arrangements, including the compliance mechanisms, needed to support the act. The minister also stated that the government would be seeking passage of this further bill prior to Christmas, to enable industry to develop record-keeping arrangements and plan with confidence for the introduction of the grants scheme on 1 July 2000. The introduction of this bill meets that commitment.

The bill provides that most provisions in the act will commence on royal assent. This will ensure that instruments and determinations may be made and registration mechanisms can be established before the Diesel and Alternative Fuels Grants Scheme takes effect on 1 July 2000. This will avoid any undue delay in claimants receiving their entitlements.

The amendments which are introduced by this bill also:

. provide guidance to claimants as to what records should be kept in order to substantiate their claims;

. clarify entitlements to the Diesel and Alternative Fuels Grants Scheme by prescribing formulae so that claimants will understand their entitlements;

. note that grants paid under the Diesel and Alternative Fuels Grants Scheme are assessable income under the Income Tax Assessment Act 1997, consistent with the treatment of rebates under the existing Diesel Fuel Rebate Scheme;

. enable the Commissioner of Taxation to issue a determination, after consultations with industry, to provide guidance to claimants as to what operation of a vehicle constitutes a journey for the purposes of the scheme; and

. ensure that the Commissioner of Taxation has adequate powers to administer the Diesel and Alternative Fuels Grants Scheme.

On 28 May 1999 the Prime Minister gave an undertaking to Senator Meg Lees that the government would put in place rigorous enforcement measures to police the scheme. In accordance with that undertaking, the bill provides adequate penalties and safeguards to protect funds and to prevent abuse of this scheme.

Where businesses also claim the diesel fuel rebate, the bill contains provisions to enable advances to be made under the grants scheme in the same way as they are made under the Diesel Fuel Rebate Scheme. This will assist in minimising the compliance costs of such claimants.

Full details of the measures in the bill are contained in the explanatory memorandum.

I commend the bill to the House and table the explanatory memorandum to the bill.

Debate (on motion by Mr Melham) adjourned.