Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Taxation Laws Amendment Bill (No. 9) 1999



Download WordDownload Word

Bills Digest No. 61  1999-2000

image

Taxation Laws Amendment Bill (No. 9) 1999

Warning:

This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal stat us. Other sources should be consulted to determine the subsequent official status of the Bill.

Contents

 

Passage History

Taxation Laws Amendment Bill (No. 9) 1999

Date Introduced:   2 September 1999

House:   House of Representatives

Portfolio:   Treasury

Commencement:   Immediately after the commencement of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999, i.e. from 1 July 2000.

Purpose

To ensure that the diesel fuel rebate rate applying to eligible forestry activities is aligned with the rate applying to other primary production activities. 

Background

Prior to the agreement between the Government and the Democrats on the modified diesel fuel rebate scheme (DFRS), the rebate for eligible activities was the same across all primary production (agriculture, forestry and fishing).

The relevant part of the Government / Democrat agreement states:

The extension to the off-road concession for diesel and like fuels will be limited to providing full credits for marine use, bush nursing homes, aged persons homes and private residences but not for construction, power generation, manufacturing or forestry. (emphasis added).(1)

This meant that forestry would not get the 100 per cent rebate ('f ull credit') that marine etc use will receive. No mention was made of agriculture. No details were provided as to the rates of rebate that would apply to the activities that would not receive the 100 per rebate.

 

The changes to the DFRS were implemented t hrough the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 . Subsection 5AAA of that Act states that:

A declaration … may declare different rates for

  1.  (a) use of diesel fuel in primary production other than forestry; and

(b) use of diesel in forestry.

However, the rate declared for use of diesel fuel in forestry must be 35/43 of the rate declared for use of diesel fuel in primary production other than forestry.

The effect of this legislation was that the parity between the primary product ion sectors was broken, with forestry receiving only 81.4% (i.e. 35/43) of the rebate applicable to the other sectors.  This effect seemed to be confirmed in the second reading speech

The full rebate will be extended to…agriculture, fishing and mining…currently they do not receive a full rebate. Forestry will continue to have access to the rebate in the proportion it currently receives.(2)

The move created concern within the forestry peak body, the National Forests Industry Association, who described it a s creating a ' significant disincentive to investment'(3) in the forest sector.

However, the Government has now said that it always intended the forestry and timber processing industries would receive the same rebate amount as other primary production indus tries(4) and has introduced the Taxation Laws Amendment Bill (No. 9) to correct the situation.

Main Provisions

Item 1 of Schedule 1 repeals subs 164(5AAA) and (5AAB) of the Customs Act 1901 . These subsections were inserted by the s ubsection 5AAA Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 referred to in the background of this digest.

Item 2 of Schedule 1 repeals subs 78A(5AAA) and (5AAB) of the Excise Act 1901 . These subsections were also inserted by the s ubsection 5AAA Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 referred to in the background of this digest.

The effect of these changes will be to repeal the differential rate between forestry and other primary production sectors imposed by s ubsection 5AAA of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 .

Endnotes

1. Prime Minister's We bsite, 'Changes to the Goods and Services Tax' http ://www.pm.gov.au/media/pressrel/1999/changes3105.htm

2. The Hon. John Anderson, House of Representatives, Debates , 22 June 1999

3. NAFI Website, 'GST and Diesel Fuel Excise Rebate'  NAFI News,  July/August 1999  http://www.nafi.com.au/newsletter/1999-08/

4. The Hon Wilson Tuckey, House of Representatives, Debates , 2 September 1999

Contact Officer

Angus Martyn and Richard Webb

16 September 1999

Bills Digest Service

Information and Research Services

This p aper has been prepared for general distribution to Senators and Members of the Australian Parliament.  While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document. IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.