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Thursday, 7 October 1971
Page: 2107

Mr COHEN (Robertson) - I want to raise with the Minister for Customs and Excise (Mr Chipp) a matter about which I asked him a question recently. My question was:

Has it been a long-standing practice for oil companies to be charged with customs and excise duty on petrol when their tankers take delivery from bonded storage, as at Kurnell for instance, prior to its going into home consumption? Was this practice broken just prior to the Budget so that oil companies paid excise on petrol in bonded storage at the pre-Budget rate of 15.3c a gallon? If so, will the Minister explain why?

The Minister replied:

The procedure upon which duty or excise is paid on petrol or other commodities related to my jurisdiction is at the point at which the goods are entered for home consumption. That would apply both to tariff duties on imports and excise duties on locally produced goods. To my knowledge, there has been no change in the procedure relating to petrol or anything else. However, I will look into the matter as the honourable gentleman has requested.

A number of newspapers took up this matter because it was disclosed, as I understand it, not by any Press statement but through various discussions with the Minister, that the oil companies had saved approximately $1.3m by paying their excise and customs duty on oil shortly before the Budget was presented. I spoke very briefly to the Minister and asked him when I could get the figures. He said that I could get them later on that day or the next day. Perhaps he meant that I was to go and see him, I do not know, but I have not got the actual figures. I hope that these figures will be supplied as soon as possible. However, on Saturday, 2nd October, the following day, an article appeared in the Sydney Morning Herald' under the headline 'Concern at $lm Duty Saving'. The article was written by John Stubbs. I will have to quote it in detail. It is as follows:

The Minister for Customs and Excise, Mr Chipp, is expected to give Parliament details of oil and cigarette company transactions on the eve of the Budget which cost the Commonwealth more than $lm in revenue.

He said today the companies had gambled that duties would rise and had paid duty on goods they had in bonded store, so avoiding the Budget increase. 1 am concerned by the practice - which has happened almost every year since Federation - but I have been informed that the Commonwealth Government has no constitutional powers to stop it,' Mr Chipp said.

It was the normal practice for companies to pay duty only when goods were taken out of bonded store and entered for Australian consumption.

He said oil companies had deprived the Commonwealth of about $1.3m in revenue by paying $10m in duty on 65 million gallons of petrol in bonded storage on Budget Day last month.

This had been about one-third of the petrol in bonded storage at the time.

The duly on petrol went up by 2c a gallon in the Budget.

Mr Chippsaid he was seeking details of similar transactions about the same time by cigarette manufacturers and others.

The fact that this happened before budgets almost every year - except sometimes in election years when taxes were not expected to rise - and that the companies could have trebled their savings by paying duty on all the petrol on bonded storage suggested that there was no leakage that duties would rise.

That statement, which is as yet uncorroborated, appeared in the 'Sydney Morning Herald' on 2nd October last. However, it is the final paragraph in the article which concerns me because I believe that it leaves the Minister wide open to criticism.

It quotes him as saying: 1 am glad this practice has come into the open. I am seriously considering giving details of these transactions to Parliament to discourage similar moves to deprive the Commonwealth of revenue in future years.

That final paragraph of the article in which the Minister says: 'I am glad this practice has come into the open' and I have read it about a dozen times - seems to me to give rise to the inference that the matter was not out in the open previously. One could assume from a statement such as this that the Minister was not aware of what was happening. In a statement which I issued on the Sunday afternoon after that article appeared in the Press 1 said that if the Minister was not aware of it he was guilty of gross negligence, and 1 still stick to that claim. The Minister said:

I am seriously considering giving details of these transactions to Parliament to discourage similar moves . . .

If he was aware of the situation and he has not disclosed it to Parliament, that is an even more serious charge. If not, then I am afraid one can only draw a conclusion about what he should have done. If he can now disclose these things prior to the next Budget and thus prevent this $1.3m from escaping from the Government's taxes, why was this not done before this Budget? Why was it not done before the last Budget? The Commonwealth could have gained perhaps $2.5m to $3m which rightly belonged to it and not left it in the hands of oil companies which I am sure we all agree are not doing too badly.

I think that for many years the public has been fed up to the hack teeth with the way in which the ordinary consumer will go into a shop on the day after the Budget has been presented and pay an extra 4c or Se for a packet of cigarettes knowing full well that the man who owns the shop did not pay the additional excise on those cigarettes. The Government has been asked questions about this matter on many occasions, and quite rightly it replies: 'We cannot police every little shop'. 1 understand that that is a difficult thing. But in the case of bonded stores, where oil and petrol are in the hands of the Commonwealth Government in about 15 different stores, this is a completely different question. There must be answers to the problem of stopping oil companies from getting away with $2m or $3m to which they are not entitled. The other thing that I think the Minister still has to answer for is this final point that I make: If there are means of stopping this escape in future Budgets why were these steps not taken in the last Budget and why were they not taken in the Budget before last?

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