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Wednesday, 20 August 1980
Page: 520

Mr GARLAND (Curtin) (Minister for Business and Consumer Affairs) - I move:

That the Bill be now read a second time.

The purpose of this Bill is to enact the excise tariff alterations moved in the House on 17 April 1980 by Excise Tariff Proposals (No. 2) 1980. Excise Tariff Proposals (No. 2) 1980 increased the excise duty on naturally-occurring liquefied petroleum gas from $14 to $41 .65 per kilolitre. This measure was taken against the background of substantial increases in the price of LPG. Government policies set out by the Minister for National Development and Energy (Senator Carrick) on 8 April 1980 explained a comprehensive package of measures designed to encourage the use of LPG as a means of reducing our dependence on imported oil, particularly in areas where LPG has a premium value, such as for automotive use. Australia will also be more self-sufficient and hence more secure in supplies of essential energy requirements if greater quantities of LPG are used in the Australian domestic market rather than being exported.

In accordance with Government policy, the new maximum wholesale price of LPG was reduced to $205 per tonne with effect from 9 April 1980. From that date the wholesale price of naturally occurring LPG will be linked with the price of indigenous crude oil and will increase by the same percentage as any increase in the price of that oil. The price of ex-refinery LPG will also move in accordance with any such adjustment. These arrangements will maintain an appropriate price differential between LPG and crude oil. The controlled prices will not apply, however, to LPG when used as a petrochemical feedstock in nontraditional industrial uses or for exports. The only exception to the nexus between crude oil and LPG pricing will occur on those occasions when world prices for LPG become lower than the Australian domestic price. In this event the lower export parity price would become the basic price for domestic purposes. Against this background the Government has decided to set a formula to provide an appropriate level of excise collections from the revenue received by producers of naturally occurring LPG derived from fields in production in August 1977. The excise will be set at a rate which is equivalent to 60 per cent of the average wholesale price in excess of $147 per tonne. The revenue raised from the new excise arrangements is estimated to be $104m in 1980-81 . 1 commend this Bill to the House.

Debate (on motion by Dr Cass) adjourned.

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