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Tuesday, 8 October 1985
Page: 850

Senator GARETH EVANS (Minister for Resources and Energy)(10.28) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

This Bill proposes to amend the States Grants (Petroleum Products) Act 1965 to implement the legislative changes to the petroleum products freight subsidy scheme announced by the Government on 7 September and 26 October 1984.

The petroleum products freight subsidy scheme provides for the payment of a subsidy on the cost of transporting certain petroleum products from coastal refineries to consumers in country areas and to fishing vessels which are fuelled at sea. At present the scheme provides that country consumers and fishing vessel operators should pay no more than 5.2c per litre of the cost of transporting eligible petroleum products to their country location or ship refuelling zone.

This Bill proposes to strengthen the administration of the freight subsidy scheme, especially in its application to claimants for subsidy at safe anchorage locations, and to provide for payments of the freight subsidy on petroleum products produced at inland mini-refineries.

The administrative reforms to the scheme are the result of a review of the administration of the scheme at the safe anchorage locations for the fishing industry, which was initiated by the Government in November 1983.

On 7 September 1984, the Government announced the introduction of a number of changes resulting from that review, designed to strengthen the administration of the scheme as it applies to the fishing industry, and to control the potential for abuse by claimants under the scheme.

Clause 3 of the Bill provides the legislative authority for the imposition of conditions in a scheme formulated under the Act, relating to the various matters that must be complied with by persons applying for registration as distributors of eligible products, and the declarations and supporting documentation that might be required for submission with claims for subsidy.

Clause 4 of the Bill provides the legal sanction for the imposition of penalties for the making of false declarations in relation to subsidy claims for deliveries to safe anchorage locations.

These amendments are directed at ensuring that petroleum products for which subsidy is claimed have been actually delivered, and that the persons claiming subsidy are indeed legitimate claimants.

The second major matter dealt with in the Bill, this extension of the freight subsidy to petroleum products produced at inland mini-refineries, was announced by the Government on 26 October 1984. The amendments are intended to place inland refineries on the same footing as coastal installations, by enabling subsidy to be paid on sales of eligible products produced at such refineries at the same rate as the rate paid on products produced at coastal installations.

Owners and operators of mini-refineries will not be eligible to claim subsidy under a scheme as the subsidy will be paid in the normal manner to registered distributors on condition that the benefits of the subsidy are passed on to consumers.

Extension of the scheme to include inland mini-refineries will place inland mini-refineries which utilise readily available crude oil deposits on an equal footing with coastal installations.

Financial Impact Statement

The measures contained in this Bill have no direct financial implications. The provisions relating to the payment of the subsidy on products produced at inland mini-refineries, which are deemed to have come into operation on 1 January 1984, have the effect of validating subsidy payments already made on production at the only current inland installation at Roma in Queensland since 1 January 1984.

Since the Government's decision to increase the consumer paid margin for the freight subsidy scheme from 1.2c to 5.2c per litre, announced by the Treasurer (Mr Keating) on 14 May 1985, no subsidy has been paid on products produced at that refinery, as the new consumer paid margin is in excess of the freight differential applying to the location of that mini-refinery. I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.