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Tuesday, 12 November 1985
Page: 1967


Senator COONEY —I present the 234th report of the Joint Parliamentary Committee of Public Accounts.

Ordered that the report be printed.


Senator COONEY —by leave-Report 234 of the Joint Parliamentary Committee of Public Accounts is entitled `Excise and Deferred Customs Duties-Response'. This is the Government's response, in the form of the Department of Finance minute, to the Committee's 224th report which dealt with the collection of excise and deferred Customs duties. Report 224, which was tabled on 10 October 1984, was based on the concerns expressed in the Auditor-General's report of March 1982, which examined the procedures used to collect excise duty on beer, distilled spirits, tobacco products and petroleum products and hold goods, including imported goods, in bond pending payment of duty. In particular, the audit was designed to check that controls and procedures used by the relevant authority-then the Bureau of Customs within the Department of Business and Consumer Affairs-were adequate to protect the Commonwealth Government's revenue. The Auditor-General's report found that the checks on documentation tendered by producers to Customs, and indeed Customs' ability to make independent assessments of the revenue which was due, were inadequate.

For its part, the Committee considered the Auditor-General's comments and recommendations and discussed the issues raised with both government officials and industry representatives. The Committee also received submissions from participants in the various industries concerned. The Committee's report recommended action to improve security over this important revenue source. The Committee recommended that Customs-which was by that time part of the Department of Industry and Commerce-improve specific controls over particular excisable commodities and improve their general management operations. I should state here that the Australian Customs Service is now an independent statutory body reporting to the Minister for Industry, Technology and Commerce.

In its report the Committee recommended that authorities in addition to Customs also play a part in ensuring that the fundamental costs and benefits of the present excise system and possible changes to it were fully considered. The Committee recommended, for instance, that the issue of the perceived need for the bonded warehouse system and the implications of its abolition be referred to the Industries Assistance Commission for inquiry. The Committee also canvassed some quite radical modifications to the excise collection system. In the interests of streamlining the process of accounting for losses the Committee discussed shifting the point at which excise is collected and applying an automatic fixed percentage adjustment to the assessed quantity of excisable product. The Committee considered that such initiatives should be indicative of those to be given careful consideration by the Department of Industry and Commerce and other appropriate departments in consultation with industry.

The Committee accepts the action undertaken in some areas, particularly the strengthening of Customs' general management strategy, with the formulation of a detailed planning document, the review of staffing requirements and training programs, and action to improve controls over end users in the distilled spirits sector. However, the Committee does have difficulty with aspects of the response to the report. Of particular concern is that issues impinging on bodies other than Customs were not addressed. The Committee expects that where agencies involved in the implementation or consideration of suggestions or recommendations are identified, those same agencies provide direct and clearly attributable written responses. No response was provided by agencies such as the Industries Assistance Commission or the Department of the Treasury to the Committee's relevant comments. The Committee had requested that possible alternative methods of excise collection should be given careful consideration by the then Department of Industry and Commerce and other appropriate departments in consultation with industry and that the bonded warehouse system should be referred to the IAC for inquiry. No comment was provided on possible alternative methods of excise collection, nor was there any indication from the relevant authority regarding a reference to the IAC on the bonded warehouse system.

In addition to these omissions, other features of the Finance Minute make it an inadequate response to the Committee's 224th report. Customs rejected each of the recommendations relating to improved computerised inventory control in bonded warehouses and gave only cursory treatment to recommendations 3 and 25, which suggested improvements and economies in the excise and bond system. The Committee has decided to present this report and concurrently seek further information from the Minister for Industry, Technology and Commerce (Senator Button), the Minister who is responsible for both the Australian Customs Service and the Industries Assistance Commission.

The Committee has expressed its disappointment at the defensive attitude which permeates the response to its report and at the narrow interpretation which has been placed on several of the Committee's recommendations. Specifically the Committee asks for supplementary information on its recommendations concerning controls in, and possible alternatives to, the bond system; a reference to the IAC on bonds; information on the level of additional resources for investigation and control of the petroleum freight subsidy scheme; evidence that controls embodied in the diesel rebate scheme are adequate to ensure its efficient implementation; and on the matter of simplified loss standards, to receive advice on the outcome of the spirits working party study. I trust that the Committee can report a satisfactory conclusion to the inquiry on receipt of this information. I commend the report to honourable senators.