Bills Digest no. 166 2008–09
Customs Tariff Validation Bill 2009
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
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 12 May
2009
House: House of Representatives
Portfolio: Department of Home Affairs (Customs) and
Department of Treasury (Excise)
Commencement:
14 May 2009
Links: The
relevant links to the Customs Tariff Validation Bill 2009,
relevant links to the Excise Tariff Validation Bill 2009,
Explanatory Memoranda and second reading speeches 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 Bills is to
validate all duties demanded or collected before
14 May 2009 because of the Customs
Tariff Proposal (No. 1) 2008 and the Excise Tariff
Proposal (No. 1) 2008 so that they are taken to have been
lawfully imposed and lawfully demanded or collected.[1]
In the Budget for the 2008 09 financial year, the Treasurer,
Wayne Swan announced a proposed increase in the tax on
ready-to-drink beverages (colloquially referred to as alcopops ) of
some 70%.[2] The
measure would create an ongoing gain to revenue estimated at
$3.1 billion from 27 April 2008 and over the forward estimates
period.[3]
The increase in excise was presented by the Government as a part
of its broader strategy to tackle the problem of risky drinking
among young Australians, and especially young women, on the grounds
that alcopops are recognised as being young Australian women s
drink of choice.[4]
The alcopops tax changes were contained in two proposals which
were tabled in the House of Representatives by the Minister for
Health and Ageing Nicola Roxon on 13 May 2008 who stated that:
The excise and customs tariff proposals that I
have just tabled contain alterations to the Excise Tariff Act
1921 and Customs Tariff Act 1995.
The proposals formally place before the
parliament changes to both acts to increase the rate of excise and
customs duty applying to other excisable beverages not exceeding 10
per cent by volume of alcohol from $39.36 to $66.67 per litre of
alcohol content, on and from 27 April 2008.[5]
The two proposals were Excise Tariff
Proposal (No. 1) 2008 (covering goods made in
Australia)[6] and
Customs
Tariff Proposal (No. 1) 2008 (covering imported goods).[7]
A tariff proposal is not legislation. It is an executive
instrument. A proposal does not legally alter the relevant
legislative tariff[8]
and it is arguable that caselaw suggests that a proposal alone does
not actually give the Commonwealth legal authority to collect
duties according to the new or amended tariff contained in the
proposal.[9]
However, using the example of the practical operation of the
customs system, customs officials could simply refuse to release
the goods which are the subject of a tariff proposal unless the
customs duty was paid according to the proposal. In such a case,
section 226 of the Customs Act 1901 prevents the
importer of the goods who refuses to pay the tariff in the proposal
from taking action against the customs officials for wrongfully
withholding the goods.[10] According to section 226, that prohibition lasts for
the period of 12 months from the date of the proposal or until the
end of the parliamentary session, whichever is the earlier. This 12
month period provides the basis for the convention that governments
pass validating legislation within 12 months of a proposal coming
into effect.
Not withstanding the doubtful legal force of tariff proposals as
mentioned above, the content of the vast majority of such proposals
are uncontroversial, and thus the amended duties are presumably
paid in the expectation that validating legislation will be passed
within the 12 month period.
When the tariff proposals were gazetted, the then leader of the
Coalition, Dr Brendan Nelson threatened to block the proposed tax
rise, branding it a revenue grab.[11] The consequence of the coalition s determination
to vote against the legislation in the Senate was that the
Government needed the votes of all the Green senators, as well as
those of the two independent senators for the relevant legislation
to be passed.
The Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and
the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 were
introduced in the House of Representatives on 11 February 2009. The
relevant Bills
Digest provides useful information.
In the period leading up to the crucial vote on the legislation
on 18 March 2009 there was considerable debate about:
- whether the increased tax on alcopops had actually limited
binge drinking by young people[12] and
- whether in the event the legislation was not passed, the amount
of the tax already collected, (being approximately $290
million),[13] would
need to be refunded and if so, to whom it would be
refunded.[14]
The Government took the view that the monies collected would
have to be returned to the distillers.[15]
The coalition argued that the money should be allocated to
proper education and to proper alcohol programs that will have a
real impact on binge drinking .[16]
Whilst the public position of the Distilled Spirits Industry
Council of Australia was that the money collected to date should be
used for preventative health measures by the Government, rather
than being returned to the industry, it was reported that Bacardi
Lion, the maker of Bacardi Breezers, intended to make an
application to the Australian Taxation Office to have the amount of
additional excise that it had paid, refunded.[17]
In the context of this debate the Minister for Health and
Ageing, Nicola Roxon, was able to:
woo Independent Senator Nick Xenophon and the
Greens with a package of measures that included an extra $50
million for initiatives to tackle binge drinking.
The Government offered as concessions:
a fund to provide sponsorship to local
community organisations
community-level initiatives to
tackle binge drinking
improved telephone counselling services,
and
possible expansion of social marketing
campaigns.[18]
However, Senator Fielding ultimately voted against the proposed
legislation in the Senate and the Bills were defeated.
On 15 April 2009 the Treasurer, Wayne Swan and the Minister for
Health and Ageing, Nicola Roxon announced that in May, the
Government would:
- introduce a new tariff proposal with effect from 14 May 2009,
ensuring the alcopops measure remains in place into the future
- introduce legislation to confirm the measure in the same
session of Parliament, and
- introduce legislation to validate the revenue collected between
27 April 2008 and 13 May 2009.[19]
In response, Peter Dutton MP stated that:
The Coalition will support legislation to
validate the revenue collected to date. We call on the Government
to spend all of the money collected so far on alcohol education,
prevention and rehabilitation measures.[20]
Similarly Senator Rachel Siewert on behalf of the Australian
Greens stated that:
The decision by the Federal Government to
reintroduce the 'Alcopops' tax was today welcomed by the Australian
Greens as a common sense move to better managing alcohol-related
harm
The Government has also made the right decision
by retaining the $360 million already raised, and ensuring it is
not returned to the distillers.[21]
Accordingly the Bills which are the subject of this Digest were
introduced into the House of Representatives on 12 May
2009,[22] passed by
the Senate without amendment on 13 May 2009[23] and given the Royal Assent by the
Governor-General on the same day.[24]
According to the Explanatory Memorandum[25] these measures will validate revenues
already collected to the value of:
|
|
|
|
|
Australian Taxation Office
|
$21.7m
|
$139.2m
|
|
Australian Customs and Border Protection
Service
|
$44.0m
|
$180.4m
|
|
|
|
|
|
Total revenue
|
$72.3m
|
$351.6m
|
Customs Tariff Validation Bill
Item 3 of the Bill provides that all duties of
customs demanded or collected from 13 May 2008 to 13 May 2009
inclusive arising from the tariff proposal of 13 May 2008 are taken
to have been lawfully imposed and lawfully demanded and
collected.[26]
Item 4 of the Bill provides all of the duties
of customs which have been demanded or collected because of the
notice of the tariff proposal which was published in the
Gazette on 26 April 2008 have been lawfully imposed and
lawfully demanded or collected.
Item 3 of the Bill provides that all duties of
excise demanded or collected from 13 May 2008 to 13 May 2009
inclusive arising from the tariff proposal of 13 May 2008 are taken
to have been lawfully imposed and lawfully demanded and
collected.[27]
Item 4 of the Bill provides that all of the
duties of excise which have been demanded or collected because of
the notice of the tariff proposal which was published in the
Gazette on 26 April 2008 have been lawfully imposed and
lawfully demanded or collected.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
2434.
Paula Pyburne
12 June 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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