Key messages from the Petroleum Stakeholder Group meeting held 27 July 2023
Welcome and introductions
Tony Poulakis opened the meeting with an Acknowledgment of Country, welcomed members and called for conflicts of interest, noting that Petroleum Stakeholder Group (PSG) discussions were not of a confidential nature, with key messages published on the ATO website. No conflicts of interest were declared.
The PSG meeting 3 November 2022 key messages have been published on ato.gov.au.
There is one action item from the November 2022 meeting that has finalised with advice provided out of session following the meeting and the following updates were provided for outstanding action items:
- Action item 03112022-3-1 – This item is completed. The Contemporary Excise Experience (CEE) project had progressed, and meetings have been held with members individually to provide information about impact of CEE changes for clients.
- Action Item 03112022-5-1 – This action item is open for ongoing discussions (PSG members) to explore potential options to reduce administrative burdens.
- Action Item 03112022-5-2 – This item is in progress (Anthony Barnard) Discussions are being arranged with BP Australia regarding understanding temporary fuel storage arrangements in use in other jurisdictions and are likely to involve Australian Border Force (ABF). Nathan Dickens noted that it would be useful for discussions to involve all operational agencies to map out how floating storage could be used without compromising or risking revenue or security.
2022-23 Reflections 2023-24 Compliance focus areas
Michael Hughes advised the current fuel excise risk rating is low, with the system operating as intended. The Excise Client Manager (ECM) program provided a high level of assurance of that risk due to regular information sharing and checking.
The updated fuel excise tax gap will be published in the ATO’s Annual Report in October 2023.
Diesel collections remain strong and there are similar trends in fuel tax credit claims. Petrol clearances are stronger than previous years but have not yet returned to pre-COVID-19 levels. This has been impacted by the temporary rate reduction in fuel excise in 2022. Discussion included an observation about the impact of long-term improvements in fuel efficiency and shifts to diesel, on petroleum clearances.
The Compliance Program for 2023–24 will involve continued ECM engagement as a proactive way to understand processes used by industry. Level of Confidence work had been paused during COVID-19, however this is expected to recommence once the Contemporary Excise Experience (CEE) project has been delivered and work on the deregulation measures progressed. Aspects of the ECM program is intended to be provided to significant or ‘Level 2 tier’ clients to provide a contact point to manage issues as well as informal reviews of any changes in processes, systems, product, or key staff.
The program will involve lower-level targeted work, noting that there are approximately100 clients with fuel excise obligations. Lodgment will be monitored and the ATO will work with industry in relation to streamlined excise and excise equivalent goods measures.
Overall debt remained low in the fuel excise industry and ATO noted a very high level of compliance in relation to the temporary rate reduction for fuel excise in 2022. The ATO have monitored fuel excise and fuel tax credit claims, particularly towards the end of September 2022 when the reduction ceased. The ATO worked with clients to ensure that excise duty was paid at the appropriate rates.
Nathan Dickens noted demand trends for different fuel was expected to continue in the short to medium term.
Contemporary excise experience project
Nathan Lindemann advised members that over the weekend of 25 – 27 August, excise data would be moved from legacy systems into the ATO online system. This would result in excise payers being able to access the accounting system used by the ATO for other taxes. This enables clients to lodge and amend excise returns online for the first time. The ATO will advise clients when they can commence accessing the online system.
Current processes used in relation to licence authorisations and permissions will not be changing.
Action item |
27072023-4-1 |
Due date |
August 2023 |
Responsibility |
Rowena Troth, PSG secretariat |
Action item details |
A copy of the presentation used at the meeting to be distributed to PSG members. |
Deregulation new measures
Liz Jaspers advised that there has been progress with the excise deregulation package with 2 measures legislated as part of the Treasury Laws Amendment (Refining and Improving our Tax System) Act 2023, which received Royal Assent on 28 June 2023 and took effect 1 July 2023. This included a measure to align excise and customs reporting with other indirect taxes for small businesses with aggregated turnover under $50 million; and allowing small-scale repackaging of beer into smaller containers.
The government announced in the 2023–24 Budget that there would be a delay in the start date for the remaining measures, which is now 1 July 2024. These measures related to licensing, a uniform business experience and other items relating to streamlining fuel excise arrangements.
Treasury continue to work with Department of Home Affairs to progress the remainder of the package and will follow standard processes and consult with stakeholders and industry on draft legislation. The timing of consultation will be dependent on government decisions and legislative processes. The standard consultation period for draft legislation is usually 2 to 4-weeks and invitations for submissions will appear on both the Department of Treasury and Department of Home Affairs websites, providing key dates and deadlines.
Treasury noted lead time for industry is important to implement changes on a practical level, including any requirement for systems changes.
Anthony Barnard provided further information about the 2 measures taking effect on 1 July 2023. The small-scale repackaging measure related to the alcohol industry and removes the requirement for an excise manufacture licence when repackaging duty-paid beer into smaller containers. The other measure aligns excise and customs reporting with other indirect taxes for small businesses with aggregated turnover under $50 million. Where these entities previously lodged monthly, applications can be made to the ATO to report on a quarterly basis. Anthony noted that this mainly relates to approximately 1,800 alcohol clients as well as a small number of fuel clients. Applications to report on a quarterly basis, will be risk-assessed by the ATO to ensure compliance obligations such as lodgments and payments are up to date.
PSG members discussed possible options for a similar measure for larger payers, including partial deferral. Advice has been provided following the November 2022 meeting that there are 49 fuel excise entities that lodged and paid weekly. Industry indicated that they are keen to continue to advocate for longer reporting and paying periods. PSG members agreed that the current action item would remain open and further options would be discussed.
Industry updates – Roundtable
Nathan Dickens noted that at a global and regional market level, oil and product markets and market prices continue to be volatile and are impacted by uncertainties surrounding economic recoveries and the risks of market impacts of geopolitical pressures.
At a domestic level, there continue to be major industry and policy changes with the potential to be disruptive to fuel industry in terms of industry operations, efficiency and reliability. The changes continue to impact future investment plans and longer-term business viability more broadly and reflect changes in technology, consumer preferences and demand, more diversified business models implemented by member companies as well as changes or pivots in government policy.
Particular changes include changes in fuel quality standards (particularly gasoline), changes to existing regulations in minimum stock holdings, Safeguard Mechanism, data reporting, higher road user charging, fuel efficiency standards, electric vehicle strategy, corporate changes and acquisitions, forecasting the energy / demand mix in the future, as well as changes which may arise following the release of the Defence strategic review.
These changes create a difficult and uncertain environment for industry to make significant investments such as maintaining current hydrocarbon supply chain and infrastructure, plans for significant investment in energy transition, as well as plans to support at retail, wholesale, and refining levels. Nathan noted that it is important to maintain good information flows between industry and relevant government agencies to assist in meeting these challenges.
Industry is confident in growth and demand for diesel and are expanding to see a return to previous demand for aviation fuels. Gasoline trends are expected to continue to be flat or declining which has been the case for some time.
Members noted the continued value provided by ECMs in providing them timely support in tight timeframes and assisting industry to ensure excise obligations are being met. Potential for a single ABF contact point for industry was discussed. Viva and Ampol offered to provide industry familiarisation visits for ABF officers.
Other business
Tony Poulakis acknowledged the upcoming departure of Nathan Dickens from the Australian Institute of Petroleum (AIP). He noted the excellent support provided by Nathan to the PSG over many years and acknowledged his strong interest in the health of the fuel excise system. Support provided by AIP during the COVID-19 pandemic in relation to regular fuel clearance reporting to gain real time insights of the impact on various industries has been invaluable for government.
Rowena Troth advised PSG members that a draft Charter is being finalised for the PSG and will be distributed to members for consideration and endorsement out of session.
Meeting close
Tony Poulakis thanked members for their participation and ongoing engagement throughout the year.
Attendees
Organisation |
Attendee |
|---|---|
ATO |
Tony Poulakis (Chair), Small Business, Excise Centre |
ATO |
Anthony Barnard, Small Business, Excise Centre |
ATO |
Anthony O’Connell, Small Business, Excise Centre |
ATO |
George Galloway, Small Business, Excise Centre |
ATO |
Kellysan Powers-Martin, Small Business, Excise Centre |
ATO |
Mark Arnold, Small Business, Excise Centre |
ATO |
Michael Hughes, Small Business, Excise Centre |
ATO |
Nathan Lindemann, Small Business, Excise Centre |
ATO |
Rowena Troth (Secretariat), Small Business, Excise Centre |
ATO |
William Reid, Small Business, Excise Centre |
Ampol Australia Petroleum Pty Ltd |
Chelsea Riewoldt |
Ampol Australia Petroleum Pty Ltd |
Megan Kirkby |
Australian Border Force |
Alex May |
Australian Border Force |
Kimberlee Stamatis |
Australian Institute of Petroleum |
Nathan Dickens |
BP Australia Pty Ltd |
Bill Barton |
BP Australia Pty Ltd |
Waruna Peiris |
Exxon Mobil Oil Australia Pty Ltd |
Darren Koh |
Exxon Mobil Oil Australia Pty Ltd |
Grace Abinoja |
Treasury |
Liz Jaspers |
Treasury |
Paul Fischer |
Treasury |
Stasi Polas |
Treasury |
Toby Silcock |
Treasury |
Tracy Richards |
Viva Energy Australia |
Helen Curran |
Apologies
Organisation |
Member |
|---|---|
Viva Energy Australia |
Troy Houston |