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Avgas tax goes.

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The Minister for Transport and Regional Development, Mark Vaile, today abolished the so-called avgas tax - a major win for operators of light aircraft in regio nal and remote areas of Australia.


The abolition of the avgas tax, effective today, delivers on a core election commitment to introduce a fairer and more equitable system to fund General Aviation’s contribution to Airservices Australia.


General Aviation operators have historically paid a levy on aviation fuel. The avgas tax last year raised $17 million.


However a number of private pilots and aircraft owners, agricultural operators, and small operators in regional and remote Australia never used the airways services provided by Airservices Australia, yet still paid via the avgas tax.


The abolition of the avgas tax will mean savings of up to $10,000 a year per aircraft for some operators.


The abolition of the avgas tax means the Howard/Fischer Government is delivering on its commitment to introduce a fairer system for air traffic service charges levied on general aviation.


“Labor’s last act was to try and increase the avgas tax. We stopped them,” Mr Vaile said.


“We cut the avgas tax by 2.6 cents per litre in May and today, we have abolished the remaining component of over 13 cents per litre, providing a saving of $17 million a year to the general aviation industry.


“This will be a real boost for the many general aviation operators in the bush who have been paying the levy but rarely if ever use any services provided by Airservices”


“Where does Labor stand on this? In their 13 years, they only ever increased the avgas tax and they tried it on again in their last days in office,” Mr Vaile said.


“Like the L-A-W tax cuts, Labor’s promises cannot be believed.”


The abolition of the avgas tax will benefit a broad range of users, including private aircraft owners, sports aviation enthusiasts, flying training schools and agricultural aircraft operators. These are real and significant savings and operators will reap the advantages every time they refuel their aircraft.


The Minister called upon fuel retailers to ensure that these savings were realised by the industry by passing the cut in avgas on to industry.


A number of industry groups have welcomed the proposal, including the Aircraft Owners and Pilots’ Association and the Aerial Agricultural Association of Australia.


The abolition of the avgas tax comes at a time when Airservices Australia is introducing new charges for its terminal navigation services. Charges will now be levied on the basis of the cost of providing the services at each airport location. The aviation industry will now see a direct correlation between the service provided and the cost of providing those services.


While the Government supports this pricing reform, it is conscious of the potential financial impact on operators at some locations where calculated price increases were significant. Therefore, the Government is contributing $13 million over two years to permit a progressive introduction of the new charges at general aviation and several regional airports. At other locations with major towers, the charges have been capped below the true cost.


“There is now scope for greater efficiencies and cost saving in the provision of terminal navigation services. The owners of leased Federal airports can negotiate with Airservices for the supply of these services under commercial contract or by another service provider.”


“This will guarantee the continued provision of terminal navigation services at a level of service more in tune with industry’s needs and provide airport owners with greater flexibility and control over the charges levied on customers.”


Airservices has also agreed to ease the impact of location-specific pricing on flying training operators for a transitional period by waiving the charge for aircraft carrying out training circuits.


Media Inquiries:  Peter Cassuben 02 6277 7680    1.7.98