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Tuesday, 30 October 2012
Page: 12506


Mr IAN MACFARLANE (Groom) (11:55): Thank you very much, Mr Deputy Speaker—and, as this is my first opportunity at the dispatch box to do so, can I congratulate you on your election to Deputy Speaker. It has been some time coming, but good always prevails and right always comes to the fore.

I will be moving an amendment to this bill in the consideration in detail stage, as circulated, which particularly relates to the LPG component of the bill. I will now speak to that. Whilst the coalition and opposition in general supports the amendments proposed under the TLAB, we certainly do not support the sections of the bill as they relate to the introduction of a huge compliance cost, particularly to small business, in relation to the taxation and the levying of an excise on gaseous fuels. These fuels are LPG, LNG, CNG—or compressed natural gas. These fuels are of course not only clean-burning fuels, and therefore something that is helpful in terms of the environment—and I would have thought those in government would understand that—but, secondly, these are fuels which Australia is overly endowed with; in fact, we are exporters of these fuels. We export LNG from the North-West Shelf and we have an excess of natural gas in its forms of compressed natural gas and liquefied natural gas. Australia is heading towards being the largest exporter of that gas in the world.

What we are short of in Australia, unfortunately, is liquid fuel—that is, crude oil or condensate—and so it makes absolutely no sense to me, or to Australians in general, that we introduce an excise on these gaseous fuels, yet this is what the government did last year. So desperate for money are they that they will tax anything that doesn't move, and if it doesn't move they push it and then tax it. We know that they are desperate for cash, we know they spend money day in, day out that they cannot bring back into balance—and, of course, we saw last week with the MYEFO that they are able to actually get themselves in such a position where they are so desperate for money that they are now going to tax businesses, including small businesses with a turnover of $20 million or more. They are going to make them pay their income tax not quarterly but monthly. So they are going to make them pay 14 months' tax in 12 months. This just highlights how out of control the spending is by those who sit opposite us in government.

The requirements and compliance regime being introduced under this TLAB bill and the excise being placed on gaseous fuels by this government is extraordinary red tape. They come into government and say that they are going to ease the compliance burden; but, as we know, all they have done is increase it and increase it and increase it. There is compliance burden on the small businesses that I talk to, whether they are in my hometown of Toowoomba or whether they are in Whyalla where I was last week. Geez, they remember the Minister for Trade there well—not nicely, but they remember him well. I doubt they will ever forget him.

Mr Bradbury: They are still there.

Mr IAN MACFARLANE: Despite the predictions of the AWU, they are still there. They are just waiting for the return of a decent government that will abolish the carbon tax, abolish the mining tax, ensure that there is a predictable environmental permitting system and ensure that nothing changes so that they do not wake up every morning in Whyalla and find that the government has imposed another new tax.

What we have in front of us today is a compliance regime which allows—let us call it—John Smith's Tent World to sell LPG, and they have been selling LPG to happy campers for a long time. They now have an enormous compliance burden because, if that LPG is used in transport fuels, they now have to fill out a whole heap of forms to say that it was not. If it happens to be the local BP—and I have a local BP that I use in east Toowoomba—they refuel your car with LPG, if you have got an LPG car, and they also refill your gas cylinders for your barbecue or whatever. Their compliance burden under this bill is enormous, because some of the gaseous fuel they sell will be taxed and some of it will not be. So, rather than just having to report the fuel that is taxed, of course you have to report everything. This is a government that has taken red tape to a new level.

The compliance measures contained in this bill have not been previously announced. The LPG industry, small business and let alone the users of LPG have never been consulted about these compliance measures. Had they been, there would have been a more sensible approach to this measure. If we look at the detail and the complexity of this, we realise that the government has got absolutely no idea of what it is doing with it, other than burdening business with a whole new level of red tape. The government says that this measure is necessary to get around administrative difficulties—which they created. So they create an administrative difficulty by taxing a gaseous fuel that is more environmental friendly than conventional fuels and then they say to small business: 'You not only have to pay in terms of paperwork and red tape but you're to blame. You're the reason we're doing this.' How crazy are they?

These amendments are clumsy at best. They go way beyond and are more arduous and stricter than the current Excise Act obligation for conventional fuel sellers and others obliged to collect excise. Let us look at the model. For 100 years or thereabouts, governments have been collecting excises in various forms. We have a model that works. If you sell petrol or you sell distillate or if you sell perhaps a little bit of kerosene—not so much these days—then you have an excise regime which your business has to follow. It works. Everyone is used to it. Everyone understands it. So why don't we use that? No. Far too simple. Nowhere near enough red tape in that. So government is introducing a regime just for gaseous fuels which is far more onerous and far more arduous than the regime that is currently in place.

It is stated that this legislation will ensure the 2011 alternative legislation on excising gaseous fuel works as is intended. If the intention is to collect excise from businesses for gaseous fuels then we say firstly that that should not have been excised in the first place. We want to encourage the use of fuels for transport that are actually plentiful in this country in order to help our balance of payments and to make public transport cheaper so that we have buses running on CNG and trucks running on CNG and LNG, with less particulates, less pollution in the environment.

But then comes along the member for Lilley, the Treasurer. If he sees something he will tax it. So he has taxed it and now he has to try and work out how he is going to collect the tax. But, as I say, had he gone to the businesses and asked them how they would do this, this would not have been the way. Under this bill, premises for producing, importing or storing liquid fuels, petrol and diesel, are subject to licensing, and consequently untaxed liquid fuels do not appear in the marketplace. So that system works well. It has been around, as I say, for nearly 100 years. There are automatic remissions to fuel tax where LPG is going to be used for non-transport fuel, but that is after you have done all the paperwork.

CNG receives an exemption when it enters the marketplace as a non-transport use, but you have to identify that that has happened. It is not assumed that if Joe's Barbecue Shop is selling LPG that he is actually selling LPG for barbecues. You could never assume that, not if you are in government. You actually have to envelope, encase, that business in a pile of red tape to ensure that only those fuels that can be shown not to have been used in transport use are given an exemption.

The intention is that the compliance cost under the proposed regime will be lower than that applying to fuel tax to all gaseous fuels that enter the marketplace with subsequent fuel tax credits where appropriate. The gaseous fuel compliance regime would be based on obligations to maintain and produce appropriate records to provide access to premises, documents and goods. But in reality the government has introduced a layer of complexity not ever seen before in the excising and taxing of transport fuels. There is far more compliance, far more complexity, far more cost for small business and, of course—and here comes the next bit—it is far more difficult to be able to prove that you have done the right thing. So you have to keep your records for five years. You are open to an inspection at any time and under any terms. That places enormous pressure on small businesses not only to have the records but to have them there on site for inspection.

Subject to the following paragraph, schedule 3 is to be opposed because the amendments are more onerous and stricter than the current Excise Act obligations on conventional fuel sellers and others who are obliged to collect excise. We have a proven system; let us use that. Item 20 in part 2 of schedule 3, which will treat a forklift truck used off public roads as not being a motor vehicle for the purpose of the Excise Act is not opposed. They actually got one thing right, and we give them credit for that. We give them credit for actually realising it. I do not know if they have ever driven a forklift, but I have. If you have a forklift you are hardly going to be cutting laps around a city block in Toowoomba. They are there for the removal of produce, usually from the backs of trucks, or for moving produce round a warehouse.

In other respects, parts 1 and 2 of schedule 3 will increase the red tape burden, especially for small business and LPG, and the existing provisions in the Excise Act regarding record keeping, officials' access to premises and imposition of penalties for the supply of gaseous fuels subject to the fuel tax relief for transport use are amply sufficient. Why is it that this government does not get small business? Why is it, as Kim Beazley said famously once, the Labor Party is not the friend of small business? Why do they see a small business and want to tax it? Why do they see a small business and want to impose red tape? Why do they see a small business and make it harder for that small business to employ people? This is a clear example of what this government does to small business. There is no respect for them, no understanding of them, no understanding of the cost that they are burdening them with.

The coalition will not stand by quietly and watch small business get it in the neck again as a result of this government's incompetence and, of course, their fundamental failure to manage their own money—the fact that every time they look up they have to find a new tax to keep their wild and exorbitant spending in check.

In conclusion can I say, as I said at the opening, that these measures have not been previously announced. It is stated that the purpose is to ensure that the 2011 alternative fuels legislation works as intended, but I can assure those who sit opposite that if they consult with the coalition—and we accept that we lost the vote last year—with the LPG Association and with small business then we will find a way to make this work under the current compliance regime. We do not need a whole new level of red tape. There are, as I said, specific legislation exemptions—for example, where the duty has been paid at the same rate on each component of the blend—and we continue to work with the government to ensure that that works. Can I just say in conclusion, foreshadowing the amendment, that we are interested in good government. This is not good government.