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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Customs Tariff Amendment (Aviation Fuel Revenues) Bill
1999
Date Introduced: 2 June 1999
House: House of Representatives
Portfolio: Justice and Customs
Commencement: The amendments outlined in
this Digest commence on 12 May 1999
To increase the
rate of customs duty on imports of aviation gasoline and
kerosene.
The amendments proposed by the Bill gives effect
to the Government's Budget decision to increase customs duty on
aviation gasoline (avgas) and aviation kerosene (avtur). The
amendments have two stated objectives, namely:
-
- providing funding for the Civil Aviation Safety Authority's
role of fostering air safety regulation in Australia and
-
- offsetting the Government's subsidisation of Airservices
Australia operations at a number of control towers at regional and
general aviation airports.(1)
With respect to the Civil Aviation Safety
Authority, the rationale given for the increase in Budget Paper
No. 2 is that the measure will:
Address a shortfall in industry contributions to
air safety programs.(2)
More detailed rationale for the increase is
provided by the Government in the Explanatory Memorandum to the
Bill, namely:
The Civil Aviation Safety Authority (CASA) was
established to promote and foster air safety regulation. The main
source of CASA funding is through the collection of excise and
customs duty on avtur and avgas. It is estimated that there will be
a shortfall of funding for CASA operations in the financial year
1998-99 which will continue in the subsequent years.(3)
With respect to offsetting the Government's
subsidisation of Airservices Australia operations at a number of
control towers at regional and general aviation airports, the
rationale given is that:
[It] was announced in the 1998-99 Budget that
Government and users at the major capital city airports would
subsidise that charges at these airports. However, at the time the
subsidy was agreed to, it was on the basis that it was required as
an interim measure. It was anticipated that Airservices would be
able to contract out or privatise tower services at many of these
subsidised locations, thus reducing the costs imposed on airport
users, and allowing the subsidy to phase down markedly in
1999-2000; and disappear the following year.
The recent disallowance by the Senate of the
contracting out regulations has meant that cost reductions through
the use of alternative service providers are no longer an option in
the short term. In order to ensure these essential services are
provided at regional and GA training centres at a reasonable cost
to users, the Government has agreed to maintain a subsidy.(4)
To date there has been no negative industry
reaction to the proposed increase reported in the major daily's.
The two major industry players, Qantas and Ansett, have not issued
press statements arguing against the increases.
The increase in the rate of customs and excise
duty proposed by the Bill and the Excise Tariff Amendment (Aviation
Fuel Revenues) Bill 1999 coincides with a major restructure of the
Civil Aviation Safety Authority. The restructure aims to establish
clearer lines of accountability, transparency of responsibility and
the introduction of new skills and capabilities. The restructure
and changes proposed by the Bill, Excise Tariff Amendment (Aviation
Fuel Revenues) Bill 1999 and Aviation Fuel Revenues (Special
Appropriation) Amendment Bill 1999 reflect, in particular
continuing turbulence within the air safety regulation sector.
While there has been minimal industry reaction
to date to the proposed increase, it could be argued that the
increase will have a disproportionately negative effect on small
operators and private pilots. As part of the revenue raised by the
increase will ultimately pay for radar and tower services used by
larger commercial aircraft, a question arises as to why the small
operator, and particularly the private aviator, who rarely uses
radar and tower services, should be burdened with paying for those
services.
Item 1 increases the rate of
customs duty on avtur to $0.0271/L.
Item 2 increases the rate of
customs duty on avgas $0.0271/L.
-
- Customs Tariff Amendment (Aviation Fuel Revenues) Bill 1998,
Explanatory Memorandum, p. 3.
- Budget Measures 1999-2000, p. 8.
- Customs Tariff Amendment (Aviation Fuel Revenues) Bill 1998,
Explanatory Memorandum, p. 5.
- Ibid., p 8.
Ian Ireland
11 June 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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