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Wednesday, 4 May 1994
Page: 148


Senator FAULKNER (Manager of Government Business in the Senate) (9.56 a.m.) —I move:

  That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

  Leave granted.

  The speeches read as follows

ABORIGINAL LAND RIGHTS (NORTHERN TERRITORY) AMENDMENT BILL 1994

This bill reflects the continuing commitment of this Government to securing legitimate title to traditional lands on behalf of the Aboriginal people of the Northern Territory.

The Aboriginal Land Rights (Northern Territory) Act 1976 provides a mechanism whereby traditional Aboriginal land in the Northern Territory referred to in Schedule 1 of that Act may be granted to Aboriginal Land Trusts to hold title on behalf of Aboriginal people. Since the Act came into operation in 1977 a total of 57 separate parcels of land have been scheduled under the Act.

Mr President, the effect of this bill would be to bring within the Schedule to the Land Rights Act that area of land which is the subject of the Wampana Land Claim. The Northern Territory Government, the Central Land Council and Gambamora Industries Pty Ltd have entered into an agreement which settles that Land Claim. As part of that agreement the Northern Territory Government agreed to request the Commonwealth to exercise its powers under the Land Rights Act to grant the claim area to the traditional owners by scheduling that area under the Land Rights Act. The result of such scheduling would be that no further hearing or report by the Aboriginal Land Commissioner would then be necessary in order for the Aboriginal people concerned to be able to have the full rights of enjoyment of their traditional lands in fee simple.

Mr President, the Government has the assurance of all parties to the negotiations that representative views of all Aboriginal people concerned have been obtained and their wishes taken into account.

There are no financial implications arising from this bill.

Mr President

I commend the bill to the Senate.

DEFENCE FORCE (HOME LOANS ASSISTANCE) AMENDMENT BILL 1994

This bill amends the Defence Force (Home Loans Assistance) Act 1990, to enable the adjustment of interest rates applicable to the Defence Force Home Loans Assistance Scheme to remove an irregularity.

The Scheme established under the Act provides for a subsidised loan of up to $40,000 to members or ex-members of the Australian Defence Force for a period related to their length of service. The loans are made available by the National Australia Bank. The Bank paid a franchise fee to the Commonwealth to provide loans under the Scheme.

The subsidy to be paid on a loan in any month is equal to 40 per cent of the average monthly interest to be paid over the life of the loan, calculated on a 25 year period at the Benchmark Interest Rate applying for that month. Essentially, the Benchmark Interest Rate is assessed on a month-by-month basis and represents the lower of the rate offered by the National Australia Bank and the average of the rates offered by the five largest Australian banks. The method of calculating the Benchmark Interest Rate is prescribed in subclause 5.15 of the Agreement between the National Australia Bank and the Commonwealth, contained in Schedule 1 to the Act. Section 35 of the Act prohibits amendment of subclause 5.15.

Subclause 5.15 is currently operating in a manner that was not originally envisaged and which is not desired either by the National Australia Bank or the Commonwealth. The irregularity has arisen because special low introductory rates for new loans with interest fixed for a period of 12 months or less were not contemplated when the Agreement was drawn up. The present wording of subclause 5.15 applies these introductory rates to all borrowers under the scheme, irrespective of whether they are new borrowers, and for as long as those rates are on public offer. These special introductory rates are significantly lower than the Bank's majority interest rate which previously would have applied. For example, from August 1993 to April 1994 the Bank's introductory rate was 5 per cent compared to the majority rate of 9.5 per cent, and from April, 6.95 per cent compared to 8.75 per cent.

This irregularity will occur whenever a special introductory rate is offered by the National Australia Bank. This results in a reduction of interest charges to customers and interest receipts by the Bank, and a reduction in Commonwealth subsidy payment for each month that the lower interest rate applies. Potentially, continuation of the present situation would result in the Commonwealth receiving windfall savings of up to $400,000 in a full year, depending on the particular interest rates that apply at the time.

The National Australia Bank and the Commonwealth have agreed that subclause 5.15 of the Agreement should be amended so that borrowers under the Defence Force Home Loans Assistance Scheme have the benefit of the special introductory loan interest rates under the same conditions that they are available to the public. That is, the special rates would apply only for new borrowers and for the period that those rates are normally available to the public. Compared with applying the Bank's majority rate to all borrowers, the saving to the Commonwealth would be about $100,000 a year.

To enable the changes to be made, section 35 of the Act will have to be amended to remove the prohibition on amending subclause 5.15 of the Agreement. The bill achieves this by removing the reference to Subclause 5.15 from section 35. I would like to stress that the proposed amendment of the Agreement, as outlined, will still be subject to clause 20 of the Agreement, which provides that any amendment to the Agreement will have no effect unless it is confirmed in writing by the National Australia Bank and the Commonwealth.

I commend the bill to the Senate. I present the explanatory memorandum to the bill.

EXCISE TARIFF AMENDMENT BILL 1994

This bill proposes amendments to the Excise Tariff Act 1921 to incorporate in that Act two Excise Tariff Proposals that have been previously tabled in the Parliament.

Excise Tariff Proposal No. 2 of 1993 proposed a reduction in the excise duty payable in respect of gasoline for use in aircraft, or avgas, and Excise Tariff Proposal No. 3 of 1993 proposed an increase in the excise duty payable in respect of avgas and kerosene for use in aircraft, or avtur.

Avgas

Clause 3 of the bill proposes a decrease in the excise duty payable in respect of avgas from $0.25456 per litre to $0.22443 per litre, a reduction of 3.013 cents per litre. This reduction is effective from 1 July 1993. This decrease results from three sources. The first is from the final stage of the Government's program of transferring Commonwealth owned aerodromes to full local ownership and encouraging owners of local ownership plan aerodromes to accept full financial responsibility for their aerodromes. The second is the result of changes in cost recovery arrangements for the provision of firefighting services by the Civil Aviation Authority, or CAA. The third is the result of changes in cost recovery arrangements by the CAA in respect of the provision of meteorological services by the Bureau of Meteorology. Both the firefighting and meteorological services will now be directly charged to aircraft operators.

The cost savings from these sources result in a corresponding reduction in the proportion of excise duty used to fund the aerodromes and the firefighting and meteorological services. This reduction in funding is then passed on to the aviation industry in the form of a decrease in the rate of excise duty payable on avgas. A decrease of 1.013 cents per litre is attributable to the aerodrome transfer program and the remaining 2 cents per litre reduction is attributable to the CAA in respect of firefighting and meteorological services.

Clause 4 of the bill proposes an increase in the excise duty payable on avgas to $0.22999 per litre, an increase of 0.264 cents per litre. This increase was announced in the 1993 Federal Budget and is effective from 1 September 1993. The purpose of the increase is to enable the CAA to recover part of the costs of aviation safety regulation from the aviation industry and is the first stage in a program to phase in recovery of the industry's contribution to these costs.

Avtur

Clause 4 of the bill also proposes imposing an excise duty of 0.264 cents per litre on avtur. This change was also announced in the Federal Budget. This imposition of excise duty on a product previously free of duty is to enable the CAA to recover part of the costs of aviation safety regulation from the aviation industry and is in conjunction with the proposed increase in avgas.

Financial Impact Statement

Avgas

The reduction of 1.013 cents per litre in respect of the transfer of ownership of aerodromes program will result in a reduction of revenue of $1 million in 1993-94 and $1 million in 1994-95.

The combined decrease of 2 cents per litre from the changes in the CAA's cost recovery arrangements in relation to firefighting services and meteorological services is balanced by an equivalent decrease in moneys appropriated to the CAA. The financial impact is neutral.

The increase of 0.264 cents per litre is balanced by an equivalent increase in the moneys appropriated to the CAA. The financial impact is neutral.

Avtur

The imposition of 0.264 cents per litre is balanced by an equivalent increase in moneys appropriated to the CAA. The financial impact is neutral.

I commend the bill to the Senate and present its explanatory memorandum.

  Debate (on motion by Senator Reid) adjourned.

  Motion (by Senator Faulkner) agreed to:

  That the bills be listed on the Notice Paper as separate orders of the day.