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Wednesday, 19 September 2001
Page: 31043

Mr ENTSCH (Parliamentary Secretary to the Minister for Industry, Science and Resources) (7:18 PM) —in reply—In speaking to the Excise Tariff Amendment (Crude Oil) Bill 2001 I would like to thank the honourable members who have participated in this debate. I thank the member for Bonython for his contribution. His comments about AGSO were particularly relevant. That is a magnificent organisation and I agree with him wholeheartedly. It is a premium geoscience organisation which is very capably run by Neil Williams and his crew. From a government perspective, it is an organisation in which we can take a great deal of pride. It is highly recognised around the world.

The member for Mitchell's magnificent contribution touched on the value and incentives created by responsible treatment of excise. For those who might have forgotten, he reminded us that this government removed the automatic CPI increases on petrol, and of the subsequent benefits felt by the Australian public as a result of that action. The member for Paterson raised a very valid point, and one with which I totally agree, in respect of his support for alternative fuel sources. He acknowledged that we have to be able to focus on those alternatives and that we cannot rely forever on our fossil fuels. I remind the member for Paterson of this government's recent investment in ethanol. I am particularly proud of the $7.35 million that went to the Mossman central mill in my electorate as part of a successful G Gap proposal, to develop an ethanol plant. I can tell the House that it is progressing very well. It will certainly have an added value for the sugar industry in my region and it should blow a new breath of life into that region.

I thank the member for Calwell for his contribution. I was pleased that he welcomed the opportunity offered through this bill to increase oil production in Australia which hopefully will reduce our reliance on imports. He also offered some interesting views on the issue of fuel pricing and raised some serious concerns about non-competitive pressures placed on independent operators by majors. I was pleased to see that he acknowledged that there has been quite considerable work done in this area to address these concerns. However, I note his interest in wanting to continue to further investigate this area and to see what further can be done.

The bill responds to concerns raised by industry groups that high excise imposts on old oilfields discourage full exploitation of these existing and very valuable resources. It streamlines current legislation. It reduces certain crude oil excise rates and encourages oil exploration and production both onshore and offshore. A secondary but highly desirable benefit could be gas discoveries arising from oil exploration.

At the moment, the excise regime for crude oil is complex, with rates increasing according to the age of the oilfield and the volume of the oil produced. It is proposed to streamline this system and to reduce rates for the oldest and the newest oilfields. For old oilfields the crude rate is up to 75 per cent. The bill will reduce the rate for some oil by as much as 20 per cent. In addition, as part of the streamlining, the bill will remove the threshold price provisions for old oil. These provisions have not been used recently, so they are an unnecessary complication in the law. Reductions in crude oil excise rates for new oil have the effect of providing an incentive for the North West Shelf expansion project by delivering $75 million worth of assistance over 10 years from 1 July this year.

Question resolved in the affirmative.

Bill read a second time.