Bills Digest no. 172 2009–10
Excise Tariff Amendment (Aviation Fuel) 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
Excise Tariff Amendment (Aviation Fuel) Bill
2010
Date introduced: 3 June 2010
House: House
of Representatives
Portfolio: Treasury
Commencement: The Act commences on 1 July 2010.
Links: The
links to the Bill, its Explanatory Memorandum and second
reading speech can be found on the Bills page, 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
amend the Excise Tariff Act 1921 (the Act) to increase the
excise duty on aviation fuel.
The intention of the White paper was
to produce a ‘strategic, planned approach in preparing for
future economic security and environmental
challenges.’[2]
The Minister further noted that ‘the National Aviation Policy
is about giving industry the certainty and incentives to plan and
invest for the long term, strengthening safety and security and
addressing the needs of travellers, airport users and communities
affected by aviation activity.’[3]
The National Aviation Policy White
Paper was released by the Australian Government on 16 December
2009. This is the first such white paper dealing with aviation. The
process commenced with the release of an issues paper in April
2008. Following the feedback obtained as a result of the issues
paper, the Government issued the Aviation
green paper which outlined a number of policy options and
possible reforms for the future of the aviation industry in
Australia. The release of the green paper also provided another
opportunity for public input into the process. As a result of the
submissions received, the Government prepared the white paper.
The Department of Infrastructure,
Transport, Regional Development and Local Government’s
website notes
[The White Paper is] the first ever
comprehensive aviation policy statement issued by an Australian
government, bringing together all strands of aviation policy into a
single, forward-looking document providing planning, regulatory and
investment certainty for the aviation industry out to 2020 and
beyond.
The White Paper sets out the Government's
commitment to a continuation of Australia's excellent aviation
safety record and to strengthen aviation security systems, while
providing a policy framework for the development of the aviation
industry at all levels - international, domestic, regional and
general aviation including through skills and productivity
improvements. It sets out initiatives to ensure better planning and
integrated development on and around airports and to lessen the
adverse effects of aviation activity on the environment and
communities.[4]
In Chapter 6 of the White paper entitled Aviation safety
regulation and investigation, there is discussion about
strengthening the Civil Aviation Safety Authority (CASA). Public
response to the Green paper clearly expressed the view, according
to the paper, that ‘government safety agencies should have
the resources to do their job effectively.’[5]
In recognition of the importance of CASA’s role, the
Government in 2009-10 provided modest additional funding and
acknowledged the need to provide a stable and on-going funding
base. The principal sources of income for 2009-10 financial year
included:
- direct Government appropriation through the annual budget
process
- revenue from an excise levied on all aviation fuel consumed for
domestic operations
- cost recovery arrangements for regulatory services provided to
industry
- resources provided by Airservices Australia for airspace
regulation services performed by CASA’s Office for Airspace
Regulation
- fee-for-service revenue for the issue and renewal of Aviation
Security Identity cards and Aviation identity cards.[6]
As part of the Federal Budget for 2010-11, the Government has
committed $89.9 million additional funding over four years to
strengthen the capacity of the Civil Aviation Safety Authority.
This figure, which represents a 30 per cent increase over current
levels, will go towards achieving the following objectives:
- employ 97 additional safety specialists, safety analysts and
airworthiness inspectors and other staff, allowing the organisation
to expand its surveillance activities and fulfil its increasingly
complex regulatory activities
- provide expanded and ongoing training to its staff
- make permanent random alcohol and drug testing as well as a
number of other programs which until now had been funded on a
temporary or ad hoc basis
- make sure the Office of Airspace Regulation continues to have
the resources to properly regulate and administer Australia’s
airspace, an area covering almost 11 per cent of the earth’s
surface.[7]
In the White paper, the Government stated that it would review
the resource base and develop a long-term funding strategy for
CASA. As part of the new funding strategy, the Government said it
would ‘maintain the existing arrangements which ensures all
revenue raised through the aviation fuel excise is returned to the
industry through funding for CASA’s regulatory
role.’[8]
The additional funding for CASA will be provided by means of the
increase in excise- equivalent customs duty on aviation fuels to
$0.03556 per litre, an increase of $0.00702 per litre. Subject to
the passage of this Bill, the increase will take effect from 1 July
2010 and as previously mentioned, is expected to raise $89.9
million over the forward estimates period.[9]
An excise is ‘a tax on goods levied at
some point in their production or distribution which has the effect
of increasing the price of the goods supplied to the
customer.’[10]
As of 9 June 2010, the Bill has not been considered by any
committee.
The increase in excise was announced in the Federal Budget for
2010-11. The Explanatory Memorandum states that the measure will
result in an additional $89.9 million for CASA over four financial
years from 1 July 2010 to 30 June 2014.[11]
Schedule 1—Amendments to the Excise
Tariff Act 1921
Item 1 amends subitem 10.6 of the Schedule to
the Act. Subitem 10.6 deals with the rate of duty for gasoline used
as fuel for aircraft. The rate of duty is increased from $0.02854
per litre to $0.03556.
Item 2 amends subitem 10.17 which deals with
kerosene for use as fuel in aircraft. The rate of duty is increased
from $0.02854 per litre to $0.03556.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2784.
Moira Coombs
15 June 2010
Bills Digest Service
Parliamentary Library
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