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Tuesday, 7 December 1993
Page: 4081


Senator SPINDLER (11.17 p.m.) —I rise to address briefly the Excise Tariff Amendment Bill (No.2) 1993. This bill works in conjunction with the Customs and Excise Legislation Amendment Bill 1993 to effect amendments to the excise payable on the following products: firstly, the beer produced in brew-on-premises shops; secondly, blended petroleum products; and, thirdly, gasoline and mineral turpentine produced from oil shale mined in Australia.

  Clause 6(a) of this bill redefines the definition of beer in order to catch beer produced using commercial facilities and equipment—that is, beer produced in brew-on-premises shops. In these shops, the customer arrives, buys the products, mixes the brew in kettles and equipment provided by the shop, and goes away. The proprietors of the shop store the beer and stir it possibly once during the intervening two weeks. The customer comes back, bottles the beer and walks away with it.

  In regard to the definition of this process, the Australian Customs Service advised the entrepreneurs intent on establishing such shops, which are similar to shops established in Canada, that no excise would be payable. However, the government has now decided that the process that has been observed in Canada, where up to almost four per cent of beer produced is actually brewed in these shops, will in years to come heavily detract from the revenue.

  While we share the government's concern about the loss of revenue from beer produced in these shops, we also are concerned about the fact that these people were advised by the government that, as long as they followed the formula that they had placed before customs, they would not be subject to excise. I believe that people in that position are entitled to rely on the government's undertaking and should not now be put out of business.

  The government's amendments to this particular bill would ensure that beer produced in these brew-on-premises shops would attract the same excise as beer produced in large breweries. The imposition of the full excise and the flow-on taxes, the wholesale sales tax and state licence fees, would add $12.49 to the current shop price of $16 for 24 stubbies, amounting to $28.49. This compares with a price of $22 for 24 stubbies, purchased in a liquor shop, of beer brewed by breweries. Very clearly, the government's action would put these shops out of business after they have established their businesses relying on the government's undertaking.

  At the same time, however, the Democrats are concerned about the possible drain to revenue and I foreshadow an amendment which proposes to apply excise at the rate of 15 per cent of that which would be applicable under the government's amendments. This rate has been calculated to enable brew-on-premises shops to offer a viable alternative to commercial beer at approximately the same cost that is now available in liquor shops. In effect, it would be a shot across the bows of these shops to indicate that the government and, I confirm, the Democrats would be concerned about the drain to revenue amounting to millions of dollars, some $30 million or so, if the brew-on-premises industry advances in the same way as the one in Canada did.

  We believe that this is not sound public policy. There are other areas that we need to be concerned about and they are that the age limit in these shops is clearly enforced, that people under 18 are not admitted and also that health regulations are observed. We believe that these shops should be licensed under state law. Clearly, the main strategy to contain the growth of this particular industry in the way in which it has happened in Canada, and the resulting drain on government revenue, is in the level of excise which would be levied; hence, the amendment I foreshadow.

  The bill also deals with blended petroleum products. Clause 5 of the bill stipulates the formulae for calculating the excise duty payable on various blended petroleum products; namely, those containing petrol or gasoline, those not containing petrol or gasoline which are payable at the diesel rate, those containing a blend of gasoline and ethanol where no duty is payable, and those said to be fuel oil at the fuel oil rate.

  The third area of the bill relates to gasoline and mineral turpentine produced from Australian oil shale. Clauses 6(c) and 6(d) remove the excise exemption which was applicable to gasoline and mineral turpentine produced from Australian oil shale as a result of the new arrangements proposed by clause 16 of the Customs and Excise Legislation Amendment Bill 1993, which provides payments to certain producers of naphtha-derived oil shale. The Australian Democrats will support these amendments.