Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Thursday, 3 November 1983
Page: 2315

Mr DUFFY (Minister for Communications and Acting Minister Assisting the Minister for Industry and Commerce)(4.28) —I move:

That the Bill be now read a second time.

This Bill proposes to amend the States Grants (Petroleum Products) Act 1965 to enact the legislative changes to the petroleum products freight subsidy scheme announced by the Treasurer (Mr Keating) in his Budget Speech. The petroleum products freight subsidy scheme subsidises the cost of transporting certain petroleum products so that consumers in non-metropolitan areas pay no more than currently 1.1c per litre of the freight costs. In his Budget Speech, the Treasurer announced that the Government has decided to amend the scheme. Over the years the scheme has become complex, difficult to administer and more open to abuse. The proposals announced by the Treasurer emanate from a review of the scheme instituted by the previous Government. Proposals for which legislation is not required involve removing from eligibility for subsidy those locations where there is no retail site. Subsidy rates for these locations will then be based on the rate applicable at the nearest location with a retail site or, for a location at sea, at the port of loading.

Effective from 1 January 1984, this Bill proposes the removal of power kerosene from subsidy eligibility. The usage of this fuel has dropped considerably in recent years, and its removal will result in a small saving in subsidy payments. The other fuels, motor spirit, automotive distillate and aviation fuels, will remain eligible for subsidy. Provision is also made in the Bill to recognise the need to include the Northern Territory under the Commonwealth Act, which was originally drafted to provide assistance to the States. In the early stages of the scheme, special financial arrangements were made to provide equivalent assistance to the Northern Territory, which enacted its own legislation along similar lines to the Commonwealth Act. With self-government now in place in the Northern Territory, it is appropriate to accord the Northern Territory Government the same level of recognition under this Act that applies to all the other States. Proclamation action of the Commonwealth amendments is proposed as soon as complementary State-type subsidy legislation is enacted by the Northern Territory Government. As an interim measure, the changes in this Bill relating to power kerosene will, by the operation of clause 10, extend the measures covered by this Bill to the Northern Territory pending the introduction of its new legislation.

Clause 5 of the Bill, also effective from 1 January 1984, will strengthen existing legislation to specify delivery to be a requirement which must be met before subsidy payments are made. This clause also includes a provision to assist in determining rates of subsidy for certain locations which would not automatically qualify for subsidy under the normal location listing criteria. In this regard, the Petroleum Products Pricing Authority sets the freight differentials for each place. These are subsequently used to calculate the subsidy rates for those places. The Authority does not, however, set differentials for all Australian places where a sale occurs. It is therefore necessary to have a mechanism to enable subsidy to be paid at those places. Under the provisions of the Bill, subsidy will, for example, be able to be based on the rate upon which sales occur at the nearest place. It will also enable a rate of subsidy to be set for remote farms and isolated communities where the rate of subsidy for the nearest place would not be appropriate. The changes as announced by the Treasurer to the petroleum products freight subsidy scheme are estimated to save $2m in 1983-84 and $4m in a full year. I commend the Bill to the House.

Debate (on motion by Mr Moore) adjourned.