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Wednesday, 29 May 2002
Page: 2585


Mr WINDSOR (11:44 AM) —I rise to speak in support of the Diesel Fuel Rebate Scheme Amendment Bill 2002. I was quite interested in some of the comments that the member for Barker made in relation to some rearrangements with the new tax scheme in the last parliament. I would encourage him and other members of the government to consider revisiting some of the diesel rebate impacts of the changes that took place in the last parliament. I would also urge the Labor Party to consider some of the examples of businesses that the member for Barker mentioned in his address.

I do support the bill. The bill extends the eligibility provisions for the Diesel Fuel Rebate Scheme to retail and hospitality businesses that use diesel and like fuels to generate power for their own use where there is no ready access to a commercial supply of electricity—and I would like members to just remember that particular phrase: `no ready access to a commercial supply of electricity'. It gives effect to a policy initiative announced by the government during the 2001 election campaign and will principally benefit small business operators in remote areas of Australia by providing a rebate of the customs and excise duty paid on diesel and like fuels used by them to generate power for their own use. I support the initiative of the government in relation to that.

The government may well have noticed that I have a notice of motion on the Notice Paper which relates to an extension of this particular rebate scheme to businesses. It is not unlike the matter the member for Barker raised a moment ago. The notice of motion follows along similar lines to the extension to hospitality and retail businesses but it also incorporates those businesses that are in quite remote areas and do not have the advantage of commercial supplies of electricity. In my view, they should be entitled to the rebate scheme. I will give an example to the House of a particular instance in my electorate. The former member for New England also raised this particular issue during his term in parliament but nothing has happened in the intervening period. I am disappointed to say that these sorts of businesses have not been included in this particular piece of legislation.

The business I refer to by way of example is called G and C Foundry, located about 22 kilometres from the community of Uralla, which is south of Armidale. It is on a property owned by a Geoff Swilkes and his wife and family. The business grew out of what was essentially a hobby for Geoff and his family originally and they have developed quite a successful foundry on the property. They employ something like 21 people. They have two large generators powered by diesel, because of the unavailability of electricity in that particular location. The generation of electricity by diesel does mean that there has to be a full diesel charge paid for the use of the diesel. I fully understand the implications of standing order 292 in relation to money bills, appropriation bills, and private members being able to impact upon the organisation of Treasury, but I would ask the parliamentary secretary in the chair to take on board this particular instance. There are many other instances around Australia like this one, and I would encourage the government to look very closely in the future at extending the rebate scheme to those sorts of businesses.

It would cost G and C Foundry about $1 million to locate the electricity grid at their particular business. Obviously that is above any commercial reality. Currently, the truck that delivers the fuel to the generators at G and C Foundry claims a rebate but the business that operates internally with the use of that diesel is not able to claim the rebate, and obviously that has cost implications for that particular business.

Those cost implications, I believe, are important. That particular business make, amongst other things, planting equipment for Australian agriculture, for the cotton industry. They are an import replacement competitor, so they are out there doing all sorts of things that the government and members of parliament are encouraging Australian business to do—to fight in the real world, to get into the global economy, to take advantage of local technology and expertise and to try to out-compete some the imports coming into this nation—and here they are being taxed by the same government that is encouraging them to have a go by imposing the full diesel excise upon them.

I think there is a degree of hypocrisy in relation to the way in which this scheme has been applied and, as I said, I encourage the government to revisit it. I am fully aware of the implications of the Democrats' arguments in the last parliament, but this is a new parliament and I would encourage the government to revisit some of these arguments. I pledge my support in terms of any negotiations that may need to take place with the Democrats or with any other members in the Senate to try to bring some sanity to the regional implications of this sort of legislation—or the lack of the legislation being applied to remote businesses. I would be only too willing to assist in any way that I can.

The issue of fuel across regional Australia is obviously very important in a whole range of ways. I take the opportunity to encourage the government and the parliamentary secretary in the chair—and I am sure the Labor Party would be interested in this as well—to look very closely at the future use of ethanol in relation to fuel replacement. Currently within my electorate there is a proposal for a $55 million ethanol plant to be located somewhere on the Liverpool Plains to take advantage of the grain sorghum production in that particular area—and I recognise that you, Mr Deputy Speaker Scott, would be familiar with the possibilities of ethanol, grain sorghum and other grains in relation to the production future fuels. I think it is important that this parliament encourages the future use of ethanol and other alternative fuels.

I understand that there are currently some debates going on in relation to that particular issue, but it seems to me that the only way the parliament will really drive this issue is to legislate at some future date that fuel used in Australia should contain a certain proportion of ethanol or alternative fuel base. I think that will assist in driving the economics of that industry. It has happened in many states of the United States, and I would encourage the government in particular, but also the Labor Party, to look at ways and means of putting in place some practical legislation that will help drive that industry towards its future. If there were a legislative framework in which fuel had to include five or 10 per cent ethanol across Australia, the impact on the grain industry would be quite enormous. As most people who are concerned with the environmental debate would fully recognise, that is a fully replaceable fuel, not a fossil fuel. If we are serious about driving some of the environmental agendas that some people in this place talk about from time to time, I think we have to look very closely at how we as a parliament can assist that through some regulatory frameworks.

I refer briefly again to the example I gave in relation to the G and C Foundry. I would like to read into Hansard the amendment that I would have put before the parliament if standing order 292 did not preclude a private member being able to impact on an appropriation bill. I would suggest to the government that it take on board the following amendment. It would mean that after paragraph 78A(1)(d) of the Excise Act 1901 the government would insert the following:

(e) in manufacturing or service enterprises satisfying requirements set by the Minister under subsection (4D) as remote or isolated industrial enterprises unable to access normal electricity services economically.

It is essentially similar to the amendment the government has made in relation to the retail and hospitality industries. I suggest that when possible that particular amendment be included in the government's deliberations.

Obviously the taxation of fuel has been a never-ending debate in relation to road funding and the equity of access to those funds as between regional and city users. I take this opportunity to say to the House that, in terms of the excise generally charged on fuel, for every cent of excise that is charged it raises about $280 million in income to the government. Currently the government receives about $13 billion in excise annually and it spends something like $1.6 billion of that on roads. I think that in the budget debate a number of people will be taking some issue with the government in relation to that. I note that the budget papers give some forward projections of a drop in that funding of $1.6 billion over the next three years: I think it goes down to about $1.1 billion by 2004-05. That should be of concern to many people, not only in regional Australia but in Australia generally.

I also note that the Minister for Transport and Regional Services has developed what he calls the AusLink plan, which is very scant on detail at the moment. I do not mean that in a critical sense—I am aware that the minister is going to have a process of consultation in relation to how that plan is structured and how we can remove from the electoral cycle the funding of roads. I would encourage the minister for transport to actually pursue that. But I would argue that, before embarking on other sources of road funding across Australia in relation to private and public partnerships and those sorts of examples that have been mooted, even though we do have very scant detail on the AusLink plan, the government should look very closely at the funds that it does raise from fuel excise at the moment and the highly inadequate amount of those funds that is spent on roads—$13 billion is raised and $1.6 billion is spent on roads.

For every cent of excise, you get another $280 million, so I encourage the minister to not throw that out and assume that no more money can come out of that particular pot. The minister should look very closely at how more money could come out of that excise bucket in the future to be spent on roads. We are spending about 6c a litre on roads now. If we double that to 12c a litre, that would have a revolutionary effect on road funding across Australia.

In conclusion, I support the bill. I encourage the government to look very closely at the proposed amendment which standing order 292 precludes me from introducing at this particular time. As I mentioned earlier, I would be very happy to assist in any way in future negotiations with the Labor Party and the Democrats in another place to look at how some of these provisions which are being extended today to retail and hospitality businesses can be extended further to include those more remote businesses that do not have access to power generation that people in the city take for granted.