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It should be noted that the name of this Bill as introduced on 22 October 2009 is actually the Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]. This Bill is identical to the earlier Bill of the same name which was first introduced in the House of Representatives on 14 May 2009, passed unamended on 4 June 2009, but then negatived by the Senate on 13 August 2009.
The addition of the reference ‘[No. 2]’ has been made by the Department of the House of Representatives Table Office to indicate that the Bill is introduced for a second time.
Bills Digest no. 56 2009–10
Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced: 22 October 2009
House: House of Representatives
Portfolio: Treasury
Commencement: The main operative sections (Schedule 1) commence when
section 2-1 of the proposed Carbon Pollution Reduction Scheme (CPRS Fuel
Credits) Act 2009 commence.[1] All other sections commence on the day of Royal Assent.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
To amend the Fuel Tax Act
2006, the Income Tax Assessment Act 1997 and the Taxation
Administration Act 1953 consequent to the introduction of the proposed
Carbon Pollution Reduction Scheme (CPRS) fuel credits scheme.
The Carbon Pollution Reduction
Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 (the original
Bill) was first introduced into Parliament on 14 May 2009 as part of the
11-Bill Carbon Pollution Reduction Scheme (CPRS) package of legislation. Along
with the other CPRS Bills, the original Bill was passed by the House of
Representatives on 4 June, but negatived in the Senate on 13 August 2009.
The content of the current Bill, the Carbon Pollution
Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No.2],
is identical to the original Bill. As such, this Digest is unchanged from the Digest produced in June for the original Bill. For commentary on recent developments
regarding the proposed CPRS, including the reintroduction of the CPRS Bills,
see relevant sections in the Digest on the Carbon Pollution Reduction Scheme
Bill [No.2] 2009.
The implementation of the CPRS is likely to result in a rise
in the price of fuels such as petrol and diesel. To help businesses adjust to
the price rises, the government pledged to provide temporary assistance. This
will take the form of a reduction in fuel excise, which will offset the
expected rise in fuel prices.
Under the Fuel Tax Act 2006, eligible businesses
receive ‘fuel tax credits’ which offset, fully or in part, the excise on fuel that
they use. These businesses would not, therefore, benefit from the proposed excise
reductions. To assist these businesses, the government proposes to establish
the ‘CPRS fuel credit’ program. This will provide credits, equal to the excise
reductions, to offset the expected rise in fuel prices. These businesses will,
therefore, receive both the fuel tax credit and the CPRS fuel credit.
Liquid petroleum gas (LPG), liquid natural gas (LNG) and
compressed natural gas (CNG) will incur an emissions unit obligation. These
fuels are now not subject to excise so they, too, would not benefit from the excise
reductions applying to other fuels such as petrol and diesel. To ensure price
relativities are maintained, that is, so that no fuel is advantaged or
disadvantaged relative to other fuels by the excise reductions, LPG, LNG and
CNG will also be eligible to receive CPRS credits.
For details of the CPRS fuel
credits scheme, see the Bills Digest for the Carbon Pollution Reduction Scheme
(CPRS Fuel Credits) Bill 2009 (No. 2].
The Carbon Pollution Reduction
Scheme (CPRS Fuel Credits) Bill 2009 implements the CPRS fuel credits scheme.
The Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential
Amendments) Bill 2009 (the Bill) implements consequential amendments to three
Acts—the Fuel
Tax Act 2006 (Fuel Tax Act), the Income
Tax Assessment Act 1997 (ITAA 1997), and the Taxation
Administration Act 1953 (TAA 1953)—needed to ensure that the CPRS fuel
credits scheme can go into effect.
The government announced that it would provide assistance to
the agriculture, fishing, and heavy on-road transport industries in its White
Paper, Carbon Pollution Reduction Scheme: Australia’s Low Pollution Future.[2]
The Bill has been
referred to the Senate Economics Legislation Committee for inquiry and report
by 15 June 2009. Details of the inquiry are at http://www.aph.gov.au/senate/Committee/economics_ctte/cprs_2_09/index.htm
See the Bills Digest for the
Carbon Pollution Reduction Scheme Bill 2009.
The Bill itself does not have any direct financial implications.
However, in so far as it supports the implementation of the CPRS fuel credits
scheme, it indirectly will reduce revenue from excise and increase expenses
under the ‘fuel and energy’ functional category.
The Bill is not a special
appropriation and does not appropriate funds.
The Explanatory Memorandum notes:
The measures in the CPRS Fuel
Credits (Consequential Amendments) Bill are mechanical in nature, necessary
to update the Fuel Tax Act, the ITAA 1997 and the TAA 1953 for the introduction
of the CPRS Fuel Credits Bill and the administrative arrangements announced by
the Government.[3]
Items 1 to 17 amend the Fuel Tax Act.
Item 4 repeals the formula for the ‘net fuel amount’ in
subsection 60-5(1) while item 5 substitutes a new formula in
subsection 60-5(1) which incorporates both the fuel tax credits and the CPRS
credits. The new formula is:
This amendment is necessary
because applicants are entitled to claim both the fuel tax credits and CPRS
credits.
Concluding
comments
See the Bills Digest for the Carbon Pollution Reduction Scheme (CPRS Fuel
Credits) Bill 2009 [No.2].
© Copyright Commonwealth of Australia
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2464.
Richard Webb
29 October 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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