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
States Grants (General Purposes) Amendment Bill (No. 2)
1997
Date Introduced: 23 October 1997
House: House of Representatives
Portfolio: Treasury
Commencement: Royal Assent
To alter the shares for tobacco revenue related payments to the
States and Territories and provide for future changes in the
distribution of alcohol, tobacco and petroleum revenues to be
prescribed by regulation.
The amendments proposed by the Bill give effect to announcement
of the Government of 11 September 1997 to distribute revenue raised
from the surcharge on tobacco to the States and Territories
according to new distribution shares.(1)
The amendments proposed by the Bill are a consequence of the
High Court's decision of 5 August 1997 in Ha and Another v
State of New South Wales & Others and Walter Hammond
& Associates v State of New South Wales & Ors relating
to business franchise fees. Following the High Court's decision the
Government introduced measures to protect State and Territory
tobacco, petroleum and alcohol revenue.
The background to the measures is treated in detail in two
recent IRS publications:
'What is an excise duty? Ha and Hammond v NSW', Research
Note, Number 1, August 1997; and
'Federalism Up in Smoke? The High Court Decision on State
Tobacco Tax', Current Issues Brief, No. 1, 1997-98.
The reader is also referred to the Bills Digests for
the package of nine Bills introduced on the 28 August dealing with
the consequences of the High Court's decision.(2)
The amendments proposed by the Bill are the product of
discussions with State and Territory Governments and the tobacco
industry aimed at resolving industry concerns regarding the
replacement of the value-based business franchise fees system of
the States and Territories with a Commonwealth weight-based system
of fees.
The outcome of the discussions was a revised set of tobacco and
tobacco products taxation arrangements whereby the Commonwealth was
asked by the States and Territories to remove the current $167 per
kilogram customs and excise duty surcharge on tobacco and tobacco
products and replace it with:
- a 'hybrid option', involving an ad valorem surcharge
of 50.32 per cent of the final wholesale list price (which includes
both the total weight-based duty and the ad valorem
component), along with a weight-based duty surcharge of $2.65 per
kilogram; or
- a solely weight-based duty surcharge of $147.90 per kilogram,
where there are no more than 1200 cigarettes per kilogram; or
- a solely weight-based duty surcharge of $265.73 per kilogram,
where there are more than 1200 cigarettes per kilogram.(3)
It is stated in the Explanatory Memorandum to the Customs Tariff
Amendment Bill (No. 5) 1997 that:
The new method of calculating the customs duty on these products
was implemented immediately by the publication of a notice in the
Commonwealth Gazette in accordance with section 273EA of the
Customs Act 1901. The notice was published on 16 September
1997 and took effect on and from 17 September 1997.(4)
The amendments giving effect to the gazetted changes are
contained in the Customs Tariff Amendment Bill (No. 5) 1997 and
Excise Tariff Bill (No. 5) 1997.
The States and Territories also requested that the revenue
raised from the surcharge on tobacco and tobacco pdroucts be
distributed according to new distribution shares. The Bill gives
effect to that request.
The amendments proposed by item 1-3 of Schedule
1 of the Bill alter the shares for tobacco revenue related
payments to the States and Territories (item 2)
and provide for future changes in the distribution of alcohol,
tobacco and petroleum revenues to be prescribed by regulation
(items 1-3).
- Assistant Treasurer, Press Release, 11 September
1997.
- See Bills Digest Nos 23-31 1997-98.
- Assistant Treasurer, Press Release, 11 September
1997.
- Customs Tariff Amendment Bill (No. 5) 1997, Explanatory
Memorandum.
Ian Ireland
11 November 1997
Bills Digest Service
Information and Research Services
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Senators and Members of the Australian Parliament. While great care
is taken to ensure that the paper is accurate and balanced, the
paper is written using information publicly available at the time
of production. The views expressed are those of the author and
should not be attributed to the Information and Research Services
(IRS). Advice on legislation or legal policy issues contained in
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Senators and Members
and their staff but not with members of the public.
ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 12 November 1997
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