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States' Contribution to Lower Petrol Prices Bill 2001

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1998-1999-2000-2001

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

excise tariff amendment (PETROL TAX CUT) bill ( No . 2) 2001

CUSTOMS TARIFF AMENDMENT (PETROL TAX CUT) BILL ( No . 2) 2001

STATES’ CONTRIBUTION TO LOWER PETROL PRICES BILL 2001

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

(Circulated by Mr Robert Charles MP)



Table of contents

Glossary                                                                                                                     i

 

General outline and financial impact                                                                       1

 

Part 1  Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001                     3

 

Part 2  Customs Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001     4

 

Part 3  States’ Contribution to Lower Petrol Prices Bill 2001                                 5

 

 
 
Glossary

The following abbreviations are used throughout this explanatory memorandum.

Abbreviation

Definition

ANTS (Commonwealth-State Financial Arrangements) Act

A New Tax System (Commonwealth-State Financial Arrangements) Act 1999

Avtur

aviation kerosene or aviation turbine fuel

Customs Tariff Act

Customs Tariff Act 1995

Excise Tariff Act

Excise Tariff Act 1921

 





General outline and financial impact

 

Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001,

Customs Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001, and

States’ Contribution to Lower Petrol Prices Bill 2001

The purpose of this legislation is to propose a package of cuts to fuel taxes and to propose an adjustment to the Commonwealth-State shares of revenue.

Fuel tax reductions

The Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001 proposes amendments to the Excise Tariff Act to reduce the rates of excise for certain petroleum products.

The Customs Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001 proposes amendments to the Customs Tariff Act to reduce the rates of customs duty for the same petroleum products.

Date of effect :  The proposed reductions are conditional on:

1.       the House of Representatives passing a motion requiring the rates of excise be reduced;

2.       the House of Representatives passing a motion requiring the Commonwealth to propose to the Ministerial Council, an adjustment to the Commonwealth-State shares of revenue; and

3.       the Ministerial Council agreeing to a Commonwealth proposal.

The decreases in the rates of duty and the adjustment to the shares of revenue will take effect from the day on which the Ministerial Council agrees to a Commonwealth proposal.

Adjustment to Commonwealth-State revenue shares

The States’ Contribution to Lower Petrol Prices Bill 2001 proposes amendments to the ANTS (Commonwealth-State Financial Arrangements) Act to adjust the Commonwealth-State revenue shares. The purpose of the adjustment is to enable the Commonwealth to retain an amount of revenue equal to the total duty foregone because of any fuel tax cuts that take effect under:

·         amendments proposed to the Excise Tariff Act by the Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001, and

·         amendments proposed to the Customs Tariff Act by the Customs Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001 .

Date of effect :  The adjustment to the revenue shares will take effect from the day on which the Ministerial Council agrees to any Commonwealth proposal.

Financial impact of the 3 bills

In relation to similar reductions in excise and customs rates for the same categories of petroleum products, the Government estimated that the impact of the reductions on the 2000-2001 Budget was $140 million (see the explanatory memorandum to the Excise Tariff Amendment Bill (No. 1) 2001 and Customs Tariff Amendment Bill (No. 2) 2001, introduced on 8 March 2001).

As the States’ Contribution to Lower Petrol Prices Bill 2001 proposes that the Commonwealth retain an amount of revenue equal to the total duty foregone because of any reduction in the rates of excise and customs duty for certain petroleum products, the net impact for the Commonwealth will be nil.

 



Part 1.

Excise Tariff Amendment (Petrol Tax Cut) Bill ( N o. 2) 2001

1.1  Schedule 1, item 1 amends the Excise Tariff Act by providing for new rates of excise for certain subitems of the Schedule to the Excise Tariff Act, conditional on the House of Representatives passing a motion requiring that rates of excise for certain petroleum products be reduced by 1.5 cents per litre or by specified proportional rates.

1.2  In Tables 1 and 2 rates of excise for subitems of the Schedule to the Excise Tariff Act that attract the diesel or unleaded or leaded petrol rate are reduced by 1.5 cents per litre.

1.3  In Tables 3, 4 and 5 rates of excise for subitems of the Schedule to the Excise Tariff Act that are for use as fuel in aircraft and for those subitems that attract concessional rates of duty are reduced by rates of duty proportional to the 1.5 cents per litre reduction applying to diesel and unleaded and leaded petrol.

1.4  If the House of Representatives passes a motion under proposed subsection 6H(1) , the Schedule to the Excise Tariff Act is amended by reducing all rates of excise duty for particular subitems of item 11 by specified rates. Both the subitems and the rates of reduction are specified in proposed subsection 6H(2) . The amendments would mean:

·         the rate for unleaded petrol, diesel and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre;

·         the rate for leaded petrol and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre;

·         the rate for avtur is reduced by 0.112 cents per litre;

·         the rate for aviation gasoline is reduced by 0.110 cents per litre; and

·         the rate for those petroleum products attracting concessional rates of duty is reduced by 0.297 cents per litre.

 



Part 2.

Customs Tariff Amendment (Petrol Tax Cut) Bill ( N o. 2) 2001

2.1  Schedule 1, item 1 provides for new rates of customs duty for certain subheadings of Schedule 3 to the Customs Tariff Act conditional on the House of Representatives passing a motion requiring that rates of excise for certain petroleum products be reduced by 1.5 cents per litre or specified proportional rates.

2.2  In Tables 1, 2 and 3 , rates of customs duty for subheadings of Schedule 3 to the Customs Tariff Act that attract the diesel or unleaded or leaded petrol rate are reduced by 1.5 cents per litre.

2.3  In Tables 4, 5 and 6 , rates of customs duty for subheadings of Schedule 3 to the Customs Tariff Act that are for use as fuel in aircraft and for those subheadings that attract concessional rates of duty are reduced by rates of duty proportional to the 1.5 cents per litre reduction applying to diesel and unleaded and leaded petrol.

2.4  If the House of Representatives passes a motion under proposed subsection 6H(1) of the Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001 , Schedule 3 to the Customs Tariff Act is amended by reducing the rates of customs duty for particular subheadings of Schedule 3 by specified rates. Both the subheadings and the rates of reduction are specified in proposed subsection 20A . The amendments would mean:

·         the rate for unleaded petrol, diesel and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.38143 cents per litre;

·         the rate for leaded petrol and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.40516 cents per litre;

·         the rate for avtur is reduced by 0.112 cents per litre to $0.02845 cents per litre;

·         the rate for aviation gasoline is reduced by 0.110 cents per litre to $0.02808 cents per litre; and

·         the rate for those petroleum products attracting concessional rates of duty is reduced by 0.297 cents per litre to $0.07557 cents per litre.



Part 3.

States’ Contribution to Lower Petrol Prices Bill 2001

3.1  Schedule 1, item 1 amends the ANTS (Commonwealth-State Financial Arrangements) Act to provide for an adjustment to the Commonwealth-State revenue shares, conditional on the Ministerial Council agreeing to a proposal by the Commonwealth.

3.2  Proposed subsection 10A(1) provides that if the House of Representatives passes a motion requiring the Commonwealth to propose an adjustment measure to retain an amount of revenue, at the next meeting of the Ministerial Council. The revenue would be retained in the Consolidated Revenue Fund.

3.3  The amount of revenue that the Commonwealth would retain is equal to the total duty foregone because of any reductions in:

·           rates of excise proposed under the Excise Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001; and

·           rates of customs duty proposed under the Customs Tariff Amendment (Petrol Tax Cut) Bill (No. 2) 2001 .

3.4  Proposed subsection 10A(2) provides that the revenue retained by the Commonwealth and paid into the Consolidated Revenue Fund will be the total of the amounts determined by:

·         the Chief Executive Officer of Customs in relation to customs duty; and

·         the Commissioner of Taxation in relation to excise.