Bills Digest no. 102 2009–10
Customs Tariff Amendment (Carbon Pollution Reduction Scheme)
Bill 2010
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
Contact officer & copyright details
Passage history
Customs Tariff
Amendment (Carbon Pollution Reduction Scheme) Bill
2010
Date introduced: 2
February 2010
House: House of
Representatives
Portfolio: Home
Affairs
Commencement: The
main operative sections (Schedule 1) commence on 1 July 2011
provided that section 3 of the Carbon Pollution Reduction
Scheme Act 2010[1] commences before 1 July 2011. 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/.
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.
Background
This is the third time this form of Bill, as part of the
eleven-Bill Carbon Pollution Reduction Scheme (CPRS) legislative
package, has been introduced into Parliament.
The Customs Tariff Amendment
(Carbon Pollution Reduction Scheme) Bill 2009 (the original Bill),
along with nine other CPRS Bills, was first introduced into
Parliament on 14 May 2009. On 28 May 2009, an eleventh Bill was
introduced which completed the package. All the CPRS Bills
were passed by the House of Representatives on 4 June
2009—with government amendments made to some of the
Bills. On 13 August 2009, the Senate voted down all of the
Bills at second reading.
Following this, the Customs Tariff
Amendment (Carbon Pollution Reduction Scheme) [No. 2], along with
the other Bills in the CPRS package, was re-introduced into
Parliament on 22 October 2009.[2] They were passed unamended by the House of
Representatives on 17 November 2009, thus satisfying the three
month ‘waiting period’ required under the double
dissolution provisions of the Constitution.[3] The package of Bills was
introduced into the Senate on 17 November 2009. Following much
negotiation, on 24 November 2009, the Government released
amendments to a number of the Bills, and these were subsequently
adopted by the Senate Committee of the Whole. However, following
the Liberal party leadership spill on 1 December 2009, the new
leader of the Coalition, the Hon. Tony Abbott, stated that he would
seek to have Senate consideration of the CPRS Bills delayed until
Parliament reconvened in 2010 or, in the absence of a delay, vote
against the Bills at that time. With no delay forthcoming, on 2
December 2009, the Senate voted down the CPRS Bills for a second
time. This provided the government with a trigger to call for a
double dissolution election.
The CPRS Bills, including the Customs Tariff Amendment (Carbon
Pollution Reduction Scheme) Bill 2010, were again re-introduced
into Parliament on 2 February 2010 and passed the House of
Representatives on 11 February 2010. The content of the Customs
Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2010 (the
current Bill) differs slightly from the original Bill and from Bill
[No. 2]. The Digest for the current Bill highlights these
changes.
The Rudd Government made the commitment to cut fuel taxes in its
CPRS White Paper.[4]
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 2010. For further background and
information on the excise proposals, see the Bills Digest 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
Bills Digest for the Excise Tariff Amendment (Carbon Pollution
Reduction Scheme) Bill 2010.
Details of the proposed Carbon Pollution Reduction Scheme are
set out in the Bills Digest for Carbon Pollution Reduction Scheme
Bill 2010.
The original Bill, along with the others in the
CPRS package, was referred to the Senate Standing Committee on
Economics 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
Financial
implications
The Explanatory Memorandum does not identify separately the
financial consequences of the Bill. Rather, it shows the estimated
combined consequences of the Bill and related Bills as shown
below.
Source: Explanatory Memorandum, p. 8.
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’,[5] the lowering of an existing rate of customs duty (the
‘designated amount’) by the amount of a
‘rate reduction’.[6]
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
day.
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
duty.
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.
The current Bill adds a new Schedule 2. The
Explanatory Memorandum explains the reason for this provision as
follows:
Schedule 2 amends the Customs Tariff
Amendment (ASEAN‑Australia-New Zealand Free Trade Agreement
Implementation) Act 2009 (Act No. 98 of 2009) (ASEAN FTA
Act). The commencement provisions of this Act contain a
reference to the Customs Tariff Amendment (Carbon Pollution
Reduction Scheme) Act 2009. The amendment in Schedule 2
replaces ’2009’ with ’2010’, so that the
ASEAN FTA Act correctly refers to the Customs Tariff
Amendment (Carbon Pollution Reduction Scheme) Act
2010. [Schedule 2, item 1, Customs Tariff
Amendment Bill].[7]
Richard Webb
19 March 2010
Bills Digest Service
Parliamentary Library
Members, Senators and Parliamentary
staff can obtain further information from the Parliamentary Library
on (02) 6277 2464.
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