Bills Digest no. 147 2008–09
Customs Tariff Amendment (Carbon Pollution Reduction
Scheme) Bill 2009
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
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introduced: 14 May
House: House of Representatives
Portfolio: Home Affairs
Schedule 1 on 1 July 2011 provided that
section 3 of the Carbon Pollution Reduction Scheme Act 2009
commences before 1 July 2011
; all other sections on the
day of Royal Assent.
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
The purpose of the Bill is to ensure that reductions in fuel
excise, resulting from the government s commitment to cut fuel
taxes to offset the initial effect on fuel prices of the Carbon
Pollution Reduction Scheme (CPRS), also apply to the customs
tariffs (duty) on imported fuels.
The Rudd Government made the commitment to cut fuel taxes in its
CPRS White Paper.The government expects that the CPRS will result in
higher fuel prices, and proposes to cut fuel taxes to offset the
initial effects of the CPRS on prices. In essence, the proposal is
a form of adjustment assistance to fuel users. The proposals to
reduce fuel excise are contained in the Excise Tariff Amendment
(Carbon Pollution Reduction Scheme) Bill 2009. For further
background and information on the excise proposals, see the
for that Bill.
Tariffs (customs duties) on imports are set at the same levels
as excises on comparable domestically-produced goods. A lower rate
of excise than customs duty on a good would amount to protection
for local producers of that good. The Bill seeks to ensure that any
excise reductions are also incorporated into reduced customs
tariffs. As with the excise proposals, the Bill provides for:
- a reduction, on 1 July 2011, of 2.455 cents per litre in the
general rate of customs duty on fuels (38.143 cents per litre) to
35.688 cents per litre for one year
- if warranted, further customs duty reductions on five
rate-reducing days with the first additional reduction beginning on
1 July 2012 and last on 1 July 2014, and
- the amount of the reductions will depend on how much emissions
permit auction prices have increased.
This Bills Digest should be read in conjunction with the related
for the Excise Tariff Amendment (Carbon
Pollution Reduction Scheme) Bill 2009.
Details of the proposed Carbon Pollution Reduction Scheme are
set out in the Bills Digest for Carbon Pollution Reduction Scheme
The Bill has been referred to the Senate Economics Legislation
Committee for inquiry and report by 15 June 2009.
The reductions in customs tariffs will reduce revenue. How much
revenue will fall is not clear because the revenue effects are
being recalculated following the Rudd Government s decision to
delay the implementation of the CPRS for a year and set the unit
price of emissions at $10 for one year.
Schedule 1 of the Bill amends the
Customs Tariff Act 1995 (the Customs Tariff Act).
Item 1 inserts a new section
19A. Proposed subsection 19A(1) provides
for the substitution of a new customs tariff rate by allowing for,
on a rate-reducing day , the lowering of an existing rate
of customs duty (the designated amount ) by the amount of a
rate reduction .
Proposed subsection 19A(2) defines designated
amount to mean $0.35688 (that is, the amount from 1 July
2011):paragraph 19A(2)(a) or, if another amount
has been previously substituted, that substituted amount:
paragraph 19A(2)(b). This means that, under
proposed paragraph 19A(2)(b), the designated
amount can be an amount that was inserted on a rate-reducing
Proposed subsection 19A(3) provides for the
alteration of the customs tariff rates applying to different fuels,
as set out in various schedules of the Customs Tariff Act, in
accordance with proposed subsection 19A(2).
Item 2 contains bulk amendments which
substitute the first revised rate (that is, the $0.35688 per litre
applying from 1 July 2011) into the customs tariff schedule which
lists all the goods subject to duty and the respective rates of
Item 3 is an applications provision which
provides, for the absence of doubt, that the rate amendments in
item 2 apply only to goods imported into Australia on or after 1
July 2011 and goods imported into Australia before that date where
the time for working out the import duty on the goods had not
occurred before that date.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
2 June 2009
Bills Digest Service
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