Senate

Supplementary Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

General outline and financial impact

Amendment to the Excise Tariff Amendment (Ethanol and Biodiesel) Bill 2015

This amendment (the Senate amendment) to the Excise Tariff Amendment (Ethanol and Biodiesel) Bill 2015 ensures that excise duty on biodiesel increases in equal amounts annually from 1 July 2016 until reaching a final rate of 50 per cent of the diesel rate in the 2030-31 financial year and later financial years.

Date of effect: This amendment applies from 1 July 2016.

Proposal announced: In a joint Media Release of 17 June 2015 the Minister for Industry and Science and the Treasurer announced a change to the transitional duty rates for biodiesel to phase in excise payable in equal amounts over 16 years from a rate of zero in the 2015-16 financial year to a final rate of 50 per cent of the petrol and diesel rate in the 2030-31 financial year and later financial years.

Financial impact: This amendment will have a cost to revenue of $7.5 million over the forward estimates period comprising:

Human rights implications: See Statement of Compatibility with Human Rights at the end of the chapter.

Compliance cost impact: This amendment is not expected to impose any additional compliance costs on affected taxpayers.