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Tuesday, 7 December 1993
Page: 4082

Senator BOSWELL (Leader of the National Party of Australia) (11.24 p.m.) —The Diesel Fuel (Excise Duty Rebate) Administration Charge Bill, the Diesel Fuel (Customs Duty Rebate) Administration Charge Bill and the Customs and Excise Legislation Amendment Bill introduce changes to the diesel fuel rebate scheme, announced in the government's August budget. The major changes are an imposition of a one per cent administration charge or tax based on the value of the rebate due to off-road users of diesel fuel, and that the rebate is to be adjusted annually although the excise is adjusted every six months.

  These bills represent another attempt by the government to rake in revenue from rural producers. I include in that the fishing industry, which would feel this imposition probably more than any other industry. This time, the government with its new scheme is attempting to charge a one per cent fee for administering a rebate on an excise which off-road users of diesel fuel are not required to pay in the first place.

  This one per cent administration charge can only be described as a desperate money grab from primary producers by the government. I would say that it is one of the government's darkest deeds. It also applies to defenceless users of road diesel fuel in residential, nursing and aged persons homes. That should concern Senator Crowley, who is at the table. Accordingly, the opposition will be opposing these bills and will be proposing amendments.

  In 1957, a diesel fuel excise was introduced. The excise was levied for the purpose of paying for federal government roadworks. It followed then, and still follows, that off-road users of the diesel fuel should be exempt from paying the excise.

  The system of rebate has changed over the years. In 1983, when the Hawke Labor government indexed diesel excise at six-monthly intervals, the non-indexing of the rebate meant that by 1985 the rebate was short by 2.388c per litre. Fortunately, the government moved to fully exempt primary producers from diesel excise for off-road use and it explains why the mining industry now has to pay 2.388c a litre before the rebate becomes operative.

  This anomaly, which still requires the mining industry in its off-road use of fuel to pay 2.388c per litre, should be corrected immediately by the government. The mining industry should also be fully exempted from the excise on off-road use. Also, the other eligible recipients should be fully rebated; that is, the hospitals, nursing homes, residential and aged persons homes, which have a liability of 6.34c a litre.

  For all road use of diesel, the diesel excise paid was 26.573c a litre before it was raised to 29.573c a litre in this year's budget. The one per cent administration charge introduced by these bills has been structured so that the charge is tied to the amount of the diesel used. Changes in the budget not only impose a one per cent administration charge, but also introduce other costs for off-road users which will also be to the disadvantage of primary producers by imposing more costs.

  Costs will also rise as a result of the excise being adjusted every six months and the rebate lagging behind the excise increases, because it will be only adjusted annually. I believe that the amendments cover that and I am gratified to know that the Democrats will be supporting the amendments. This means that those receiving the rebate will miss out because there are two indexation increases in February and August before the rebate catches up in January, only to lag behind again.

  By this means the government will gain more revenue at the expense of farmers, fishermen, miners, hospitals and nursing homes. This government really has no shame. It takes advantage of people such as hospitals, nursing homes, fishermen and farmers. It really is disgraceful. The opposition is proposing amendments to negate these new measures.

  This year, rebates to the mining and primary industries amounted to approximately $1 billion, with rebates to the domestic users of hospitals, nursing and aged care amounting to $16,000. Yet the government has decided to tax these recipients simply because they do not have to contribute by means of petrol excise to the cost of maintaining roads. This year, for this privilege of using diesel in a way that puts no wear and tear on roads, the domestic, hospital and aged home user will have to pay $500,000 for the administration cost of the rebate, with primary producers and mining industries having to pay $19.6 million, rising to $29.1 million in three years time. The government does not seem to appreciate that, for any farming enterprise, diesel is an essential cost of normal business activity.

  The opposition voted against the rises in the petrol tax introduced by the government in this year's budget; they were a cruel blow to our productive rural industries, our rural communities and our future economic competitiveness. Rural producers lose out from all angles. The road transport industry has calculated that the higher fuel costs, which become even higher in rural areas, will increase charges to farmers and industry by $175 million a year. Rural communities will also be hit by way of higher prices for food and other necessities of life arising from extra transport costs.

  At a time when a lot of rural producers are in a desperate plight—particularly those in the wool industry and in western New South Wales and Queensland—and are finding it difficult to even put food on the table and provide for the ordinary, everyday things in life, suddenly the government says, `It will cost you 3c a litre more to drive your children to school or to the country bus stop, just as it will cost more to travel long distances to receive medical care or do business in country towns'. The government, not content with imposing these extra costs on our innocent, suffering rural industries, now wants to charge them an administration fee to return a rebate for an impost they are not required to pay. As I said to one of the Democrat senators, I think it was Senator Woodley, it is like ping-pong—you get money, you give it back and you get it back.

  In my opinion, this tax of one per cent, which is expected to return $4 million net after the cost of its collection, could only be put forward by a government that had the intention of increasing it next year. When the government granted a rebate to low income earners in the last budget, it did not also demand that the same people pay an administration fee to receive it, so why should it be any different for primary producers, hospitals and nursing homes? The administration fee, although only set at one per cent, will add almost half a cent a litre to farm costs which for some farmers will mean extra thousands of dollars. But, as I said earlier in my contribution, one of the main areas that gets hit the hardest is the fishing industry which consumes large amounts of fuel.

  There are many reasons not to like the new administration charge. There is always the distinct possibility that any new tax will hold the great attraction that the government can increase it as time passes and the government wants more. The tax may only be one per cent this year, but who knows? Next year it could be five per cent, the year after 10 per cent, and the government may want more, and eventually, when the government has worn the industry down, there could be the abolition of the fuel diesel rebate.

  This is exactly the path the petrol excise has taken. The petrol and diesel fuel excise was introduced to contribute to the Commonwealth's road funding program. Yet, although the coalition government in 1981-82 was able to spend 70 per cent of excise on road funding, the Labor government has milked the petrol excise until this year only 12.1 per cent of the excise collected is estimated to be spent on roads. The amount of excise estimated to be spent on roads in three years time is forecast to fall to only 8.7 per cent.

  There were many tricks and games played in the lead-up to the budget with the diesel fuel rebate. The very strong rumour was put around by the government that the rebate was to be removed completely. That rumour was floated, and I think all senators would have been aware of it. The rumour was strong and it was taken very seriously in that the NFF lobbied the government to keep the rebate. But it seems this may have been just a softening up process, at least as far as this year is concerned, so that the government could introduce this administration levy.

  The government has undermined the value of the diesel fuel rebate by a process of stealth. There are other forms of stealth contained within the administration charge, on top of the fact that it was introduced at all. Firstly, there is the lag of the rebate assessment six months behind the excise increase. By creative mathematics and careful timing of the budget, excise increases and the CPI increases, the Labor government by this bill is attempting to make sure that farmers, fishermen and others will never receive the same amount as they pay out in excise.

  It is just a bit more and a bit more for the government. In fact, the gap will continue to widen and the greater the rate of inflation, the greater the gap will become. This rebate creep will take an extra $15 million in the next five or six years, even at low rates of inflation. Already the rebate is behind and cannot catch up. The excise at budget time was 29.57c per litre, thanks to the government's increase in excise—and the Democrats can take no pride in allowing that to go through—but the rebate was stuck at 26.57c per litre, with the next adjustment not due till next February.

  Then there was the debacle of the minister, Senator Schacht, telling estimates that the administration fee was directly related to the actual cost of administering the scheme and was, therefore, not a tax and that the government could impose it without the necessity of legislation. Thanks to Senator Ferguson's vigilance, this was picked up. This administration charge was called an administration fee in the budget papers; we now find it is a tax. Senator Ferguson was able to ascertain at estimates that the total cost of administration and salaries relating to the diesel fuel rebate scheme was between $5 million and $6 million. However, the amount raised from the one per cent administration fee was more like $10 million—and that is a nice little bonus for the government, a 100 per cent goal it kicked for itself.

  That is very clear evidence that the administration fee is a revenue raising exercise and not related in any shape or form to the actual cost of administering the scheme. Where it really hurts is that it is a revenue raising exercise against the embattled and struggling primary industry. In Queensland, the one per cent administration charge will take $80 million from the state's farmers. Once again, they just get hit with a one per cent tax and have no say on the efficiency of the department administering it. When will this government give this productive, efficient export earning sector a fair go? The answer is that it has not done it in the last 11 years and it is not likely to do it in the future.

  In the western part of my state of Queensland, people are suffering from drought; almost half the state of Queensland is drought declared. The Labor government has removed drought from the category of natural disaster, leaving farmers to delve into inadequate funding under RAS to contend with years and years of drought. The budget not only hit them with an extra $175 million in fuel costs, but also cut rural adjustment funding. The budget continued its assault on rural families to make matters even harder by attempting to take Austudy away from 16-year-olds—a move that hurts rural students who have to meet a much harsher assets test and one which is no longer halved in consideration of their special circumstances. There was no mention of attacks on rural 16-year-olds in the government's election campaign.

   When one adds it all up, the government must stop hitting our rural producers and treating them like a milch cow. In these times, our export producing primary industry producers do not need any further government imposed cost increases that can only lessen their international competitiveness and threaten their long-term survival.

  I am very appreciative of the coalition's position in voting down this one per cent diesel levy and all the other trickery and chicanery that the government has employed in this bill to increase the charges. I was also pleased when I read a couple of weeks ago a press release from Senator Woodley, which was widely reported, saying that he, on behalf of the Democrats, would not endorse these charges and therefore this one per cent administration charge and all the other adjustments that the government has made to increase the charges will fail. I am very gratified that these charges will not occur now. I do not know why the government put it forward. The only thing that I can suspect is that it was a foot in the door with a view to gradually opening the door wider and wider by increasing the administration charges by one per cent this year, five per cent the next year and 10 per cent the next year and abolishing the fuel rebate in the future. That is the only reason that the government has put forward this bill. I am glad that the majority of the Senate has joined together to defeat this iniquitous bill. I am pleased that when the amendments are carried the one per cent levy will not be in place.