House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Fuel sales grants

Outline of Chapter

1.1 This Chapter explains the provisions of the FSG Bill. These provisions, together with the regulations they authorise, will determine whether you have an entitlement to a fuel sales grant.

Context of Reform

1.2 As announced in the ANTS tax reform document, the Government will be reducing excise on petrol and diesel on 1 July 2000, to ensure that prices to consumers need not arise on the introduction of the GST.

1.3 By this Bill, the Government proposes a fuel sales grants scheme targeted at consumers in non-metropolitan and remote areas. Grants will be paid at a higher rate for sales to consumers in remote areas. The grant scheme will address the divergence in fuel prices between metropolitan and regional areas.

Summary of new law

1.4 Registered sellers of petroleum fuel will be entitled to grants under the fuel sales grants scheme for sales to end users provided the sales are made at eligible locations.

1.5 The regulations will specify which places in Australia are eligible locations, and the rate of grant to apply to fuel sales made at those places.

1.6 Administrative provisions to give effect to the scheme are contained in the PGBA Bill, which accompanies this Bill. The provisions of the PGBA Bill are explained in Chapters 2 to 10. Provisions of the TAA 1953 will also apply to the administration of the scheme. Consequential amendments to the TAA 1953 are explained in Chapter 11.

Detailed explanation of the FSG Bill

Preliminary provisions

Short title

1.7 On enactment this Bill may be cited as the Fuel Sales Grants Act 2000 . [Clause 1]

Commencement

1.8 The Fuel Sales Grants Act 2000 will commence on the day on which this Bill receives the Royal Assent. [Clause 2]

Act binds States and Territories

1.9 The States and Territories will be bound by the Act, however, they are not liable to prosecution for any offence under the Act. [Clause 3]

Definitions

1.10 The provisions of this Bill use terms defined either in this Bill [subclause 4(1)] or in the PGBA Bill [subclause 4(2)] .

1.11 The term 'fuel' is defined by reference to products classified in the Excise Tariff. The term 'eligible location' is to be defined in the regulations to this Bill. [Subclause 4(1)]

1.12 The time and place at which fuel is sold is defined by the moment at which the purchaser takes possession of the fuel. [Subclause 4(3)]

General administration

1.13 The Commissioner will have the general administration of the Fuel Sales Grants Act 2000 . [Clause 5]

Entitlement to a fuel sales grant

1.14 To obtain a fuel sales grant you must be registered for that purpose [subclause 6(1)] . Registration requirements are prescribed in Part 3 of the PGBA Bill. Claims can be made at the same time as registration is applied for [subclause 6(2)] .

1.15 You are entitled to a fuel sales grant only for sales made on or after 1 July 2000 in an eligible location to an end user. [Clause 7]

Example 1.1

If you enter into a contract before 1 July 2000 for the delivery of fuel to an end user on or after that date, the supply of fuel will be taken by subclause 5(3) to be a sale of fuel, for fuel sales grant purposes, at the time the fuel is delivered to the purchaser. This is so even if a deposit is paid before 1 July 2000.

1.16 The regulations will prescribe how grants are to be calculated. [Clause 8]

Regulations

1.17 Authority is conferred on the Governor-General to make regulations necessary or convenient for carrying out or giving effect to the provisions of this Bill. Regulations may also be made prescribing matters required or permitted by this Bill. [Clause 9]