Supplementary Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Tariff Amendment Bill (No. 1) 2001 and Customs Tariff Amendment Bill (No. 2) 2001
The amendments to this legislation will incorporate further alterations to the Excise Tariff Act 1921 (the Excise Tariff Act) and the Customs Tariff Act 1995 (the Customs Tariff Act) to reduce the rates of excise and customs duty on certain beer packaged in an individual container exceeding 48 litres. This will give effect to the Governments decision to reduce the price of draught beer.
The amendments to these Bills will incorporate further alterations to the Excise Tariff Act and Customs Tariff Act to:
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- reduce excise and customs duty rates for beer packaged in an individual container exceeding 48 litres;
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- align the reduced rates with the present Excise and Customs Tariff structures by providing 3 different duty rates based on alcohol content - that is, for low strength, mid strength and full strength beer; and
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- provide for beer of these differing alcoholic strengths that is packaged in an individual container of 48 litres or less by applying the rates of duty introduced on 1 July 2000 that have since been subject to indexation increases in August 2000 and February 2001.
Date of effect: The alterations to the Excise Tariff Act and Customs Tariff Act were proposed by Excise Tariff Proposal No. 4 (2001), and Customs Tariff Proposal No. 3 (2001), and tabled in Parliament on 3 April 2001. The amendments took effect on and from 4 April 2001.
Proposal announced: Prime Ministers Media Release No. 914 of 3 April 2001.
Financial impact: The reduction in rates of duty for draught beer is estimated to cost $35 million in 2000-2001. The amount of $120 million, equivalent to the difference between collections on draught beer since 1 July 2000 and the amount that would have been collected using the new rates (with the exception of the following), will be appropriated and allocated to an independent foundation to be called the Alcohol Education and Rehabilitation Foundation. A small portion of this amount will be allocated to an initiative for the restoration and preservation of historic hotels in rural and regional Australia. Costs for the outyears are estimated at $175 million in 2001-2002, $180 million in 2002-2003, $180 million in 2003-2004 and $185 million in 2004-2005.
Compliance cost impact: The impact of the change in the duty rates for beer on the major brewers is expected to be minor, as these clients already have in place systems and procedures for dealing with Tariff changes with minimal effort. For the smaller clients (around 50), no impact is expected as they use manual systems.