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Wednesday, 29 April 1987
Page: 1978


Senator CHANEY —My question is directed to the Minister for Finance. I refer the Minister to his answer yesterday to Senator McKiernan's question about the excise applying on fuel products. In his answer, the Minister said:

At the outset I point out the fact that all distillate used on farms-which comprises the great majority of fuel used by farmers-is excise free already. For the first time ever in 1985 this Government entirely reduced excise on fuel. . . . It entirely removed excise for distillate used on farms. When Mr Howard was Treasurer there was an excise levy on distillate used on farms of something over 2c a litre.

Is it not a fact that, for the entire period that Mr Howard was Treasurer, primary producers were fully compensated either through a rebate or by an exemption certificate for the excise applying to fuel products used on farms and that, for a couple of years after the first Budget of the Hawke Labor Government, the rebate available to primary producers was at least 2c per litre less than the fuel products excise, and that hence primary producers were not fully compensated for the fuel products excise? Why did the Minister mislead the Senate yesterday?


Senator WALSH —I need to make one small correction to what I said yesterday. Throughout the entire period that John Howard was Treasurer, there was not an excise on distillate used on farms. However, John Howard, in his last Budget, imposed the excise as part of the bicentennial roads development program.


Senator CHANEY —I ask a supplementary question. Does the Minister deny that the changes to excise arrangements made in the Hawke Budget in 1983 opened a gap between the rebate and the amount of excise that was payable? It was not until 1985 that the Hawke Government removed that penalty which had been borne by farmers over that period.


Senator WALSH —The Fraser-Howard bicentennial roads development program imposed on distillate, petrol and a couple of other products a 2c levy from which there was no exemption.