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This Digest was prepared for debate. It reflects the legislation as
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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Taxation Laws Amendment Bill (No. 9)
1999
Date Introduced: 2 September 1999
House: House of Representatives
Portfolio: Treasury
Commencement: Immediately after the commencement
of the Customs and Excise Amendment (Diesel Fuel Rebate Scheme)
Act 1999, i.e. from 1 July 2000.
To ensure that the diesel fuel rebate rate
applying to eligible forestry activities is aligned with the rate
applying to other primary production activities.
Prior to the agreement between the Government
and the Democrats on the modified diesel fuel rebate scheme (DFRS),
the rebate for eligible activities was the same across all primary
production (agriculture, forestry and fishing).
The relevant part of the Government / Democrat
agreement states:
The extension to the off-road concession for
diesel and like fuels will be limited to providing full credits for
marine use, bush nursing homes, aged persons homes and private
residences but not for construction, power generation,
manufacturing or forestry. (emphasis added).(1)
This meant that forestry would not get the 100
per cent rebate ('full credit') that marine etc use will receive.
No mention was made of agriculture. No details were provided as to
the rates of rebate that would apply to the activities that would
not receive the 100 per rebate.
The changes to the DFRS were implemented through
the Customs and Excise Amendment (Diesel Fuel Rebate Scheme)
Act 1999. Subsection 5AAA of that Act states that:
A declaration ... may declare different rates
for
(a) use of diesel fuel in primary
production other than forestry; and
(b) use of diesel in forestry.
However, the rate declared for use of diesel
fuel in forestry must be 35/43 of the rate declared for use of
diesel fuel in primary production other than forestry.
The effect of this legislation was that the
parity between the primary production sectors was broken, with
forestry receiving only 81.4% (i.e. 35/43) of the rebate applicable
to the other sectors. This effect seemed to be confirmed in the
second reading speech
The full rebate will be extended
to...agriculture, fishing and mining...currently they do not
receive a full rebate. Forestry will continue to have access to the
rebate in the proportion it currently receives.(2)
The move created concern within the forestry
peak body, the National Forests Industry Association, who described
it as creating a 'significant disincentive to investment'(3) in the
forest sector.
However, the Government has now said that it
always intended the forestry and timber processing industries would
receive the same rebate amount as other primary production
industries(4) and has introduced the Taxation Laws Amendment
Bill (No. 9) to correct the situation.
Item 1 of Schedule 1 repeals
subs 164(5AAA) and (5AAB) of the Customs Act
1901. These subsections were inserted by the
subsection 5AAA Customs and Excise Amendment (Diesel Fuel
Rebate Scheme) Act 1999 referred to in the background of this
digest.
Item 2 of Schedule
1 repeals subs 78A(5AAA) and (5AAB) of the
Excise Act 1901. These subsections were
also inserted by the subsection 5AAA Customs and Excise
Amendment (Diesel Fuel Rebate Scheme) Act 1999 referred to in
the background of this digest.
The effect of these changes will be to repeal
the differential rate between forestry and other primary production
sectors imposed by subsection 5AAA of the Customs and Excise
Amendment (Diesel Fuel Rebate Scheme) Act 1999.
-
- Prime Minister's Website, 'Changes to the Goods and Services
Tax' http://www.pm.gov.au/media/pressrel/1999/changes3105.htm
- The Hon. John Anderson, House of Representatives,
Debates, 22 June 1999
- NAFI Website, 'GST and Diesel Fuel Excise Rebate' NAFI News,
July/August 1999 http://www.nafi.com.au/newsletter/1999-08/
- The Hon Wilson Tuckey, House of Representatives,
Debates, 2 September 1999
Angus Martyn and Richard Webb
16 September 1999
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1999
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Published by the Department of the Parliamentary Library,
1999.
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