Senator ALSTON (Communications, the Information Economy and the Arts) (9:39 AM) —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—

EXCISE TARIFF AMENDMENT BILL (No. 1) 1998

The main purpose of this bill is to insert into the Excise Tariff Act 1921 Excise Tariff Proposals Nos. 1 and 2 of 1998.

As part of its aviation policy, the Government reduced the rate of excise and customs duty on aviation gasoline ("avgas") to $0.17403 per litre, with effect from 3 July 1997.

On 31 January 1998, the legislation package implementing the fuel substitution reforms, which I will discuss in greater detail shortly, came into effect. Part of these reforms involved a complete restructure of item 11 of the Schedule to the Excise Tariff Act 1921. As a result of that restructure the duty rate for avgas was set at $0.18003 per litre. This rate did not reflect the Government's 1997 decision in relation to avgas.

The amendments made in this bill reduce the excise duty payable on avgas, as from 3 July 1997, to $0.17403 per litre.

On 31 January 1998, a package of 9 acts, implementing the Government's Budget decision to combat revenue loss through the minimisation of fuel substitution practices commenced. The prime object was to ensure that petroleum products dutiable at concessional rates of excise duty were not used as fuels in internal combustion engines.

Fuel substitution avoids paying the correct excise. It also is a fraud on consumers and on the vast majority of those involved in the petroleum products distribution and retail system who follow the rules.

Moreover, in many cases, use of petroleum products not designed for use in engines can greatly harm engine performance and expose consumers to great danger as the blends contained in these products may have a much lower flashpoint than proper diesel.

These acts were passed by the Parliament in the 1997 Spring sittings.

The petroleum industry was consulted at all stages of policy development and implementation of this package. It was concerned the new structure may create misunderstandings as to how much excise was payable on some petroleum products intended for particular uses, particularly products used otherwise than as fuels.

Accordingly, the technical amendments contained in this bill are designed to remove any such uncertainty. The amendments insert new subheadings of "other" in all subitems of item 11 except subitem 11(A) and 11(D), to cover petroleum products used for purposes other than as fuel.

These amendments do not widen the intended scope of the fuel substitution minimisation legislation.

Other technical amendments to the Excise Tariff Act 1921 are discussed in the bill's explanatory memorandum.

TELECOMMUNICATIONS (CARRIER LICENCE CHARGES) AMENDMENT BILL 1998

This bill provides for the imposition of annual charges to recover costs incurred by the Department of Industry, Science and Tourism (DIST) in monitoring telecommunications industry development plans prepared by carriers under the Telecommunications Act 1997.

Part 3 of the Telecommunications (Carrier Licence Charges) Act 1997 provides for the imposition of an annual charge on a carrier licence that is in force at the beginning of a financial year beginning on or after 1 July 1998. The amount of the annual charge is ascertained in accordance with a disallowable instrument determined by the Australian Communications Authority (ACA). The act provides for a limit on the total amount of this charge on carriers having regard to the amounts attributable to the ACA's and ACCC's telecommunications functions and powers for the immediately preceding financial year, the proportion of the Commonwealth's contribution to the budget of the International Telecommunication Union for the calendar year that is to be recovered from carriers and an estimate of the grants likely to be made by the Minister during the financial year to fund consumer representation and research in relation to telecommunications.

Currently, the licence charge payable by telecommunications carriers does not recover costs incurred by DIST. The bill provides that, in addition to the amounts mentioned above, the total charges imposed on carrier licences in force at the beginning of a financial year may include an amount determined, by a written instrument made by the Minister for Industry, Science and Tourism, to be the proportion of DIST's costs for the immediately preceding financial year that is attributable to the administration of the industry development plan requirements contained in Part 2 of Schedule 1 to the Telecommunications Act 1997.

Financial Impact

The cost associated with the administration of Part 2 of Schedule 1 to the Telecommunications Act 1997 is expected to be in the order of $600,000 in the first year and is likely to grow as the number of carriers increases. The bill will enable these costs to be recovered by the Commonwealth.

Debate (on motion by Senator Chris Evans) adjourned.

Ordered that these bills be listed on the Notice Paper as separate orders of the day.