Bills Digest no. 162 2008–09
Carbon Pollution Reduction Scheme (CPRS Fuel Credits)
(Consequential Amendments) 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
The main operative
sections (Schedule 1) commence when section 2-1 of the proposed
Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Act 2009
commence. All other sections commence on the day of Royal
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
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 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
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 for the Carbon Pollution Reduction Scheme (CPRS
Fuel Credits) Bill 2009.
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
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
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
See the Bills Digest for the Carbon Pollution Reduction Scheme
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
The Bill is not a special appropriation and does not appropriate
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.
Items 1 to 17 amend the Fuel
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
This amendment is necessary because applicants are entitled to
claim both the fuel tax credits and CPRS credits.
See the Bills
Digest for the Carbon Pollution Reduction Scheme (CPRS Fuel
Credits) Bill 2009.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
5 June 2009
Bills Digest Service
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