House of Representatives

Explanatory Memorandum

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

Chapter 5 - Fuel tax reductions

Excise tariff amendment bill (No. 1) 2001

Outline of chapter

5.1 This chapter explains amendments to the Excise Tariff Act which reduce the rates of excise duty for certain petroleum fuels.

5.2 Schedule 1, items 13 to 17 substitute new rates of excise for the affected subitems of the Schedule to the Excise Tariff Act.

Context of reform

5.3 On 1 March 2001, the Prime Minister announced a package of cuts to fuel taxes. As part of this package, the following changes to the rates of excise duty on certain petroleum products are to be introduced with effect from 2 March 2001:

•

reduce the rates of duty by 1.5 cents per litre for unleaded petrol, leaded petrol, diesel and other petroleum products that attract equivalent rates of duty; and

•

reduce rates of duty for aviation fuels and those petroleum products attracting concessional rates of duty by a proportional amount.

5.4 Changes to the Excise Tariff Act give effect to the Prime Ministers announcement.

Summary of new law

5.5 Rates of excise for subitems of the Schedule to the Excise Tariff Act that attract the unleaded/diesel or leaded petrol rate are repealed and substituted with new rates reflecting a reduction of 1.5 cents per litre.

5.6 Rates of excise for subitems of the Schedule to the Excise Tariff Act that are for use as fuel in aircraft and for those subitems that attract concessional rates of duty are repealed and substituted with new rates reflecting a reduction per litre that is proportional to that of the 1.5 cents per litre reduction applying to unleaded petrol and diesel.

Detailed explanation of new law

5.7 The Schedule to the Excise Tariff Act is amended by repealing all rates of excise duty for certain subitems of item 11 and substituting those rates with new rates, as follows:

•

the rate for unleaded petrol, diesel and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.38143 cents per litre;

•

the rate for leaded petrol and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.40516 cents per litre;

•

the rate for avtur is reduced by 0.112 cents per litre to $0.02845 cents per litre;

•

the rate for aviation gasoline is reduced by 0.110 cents per litre to $0.02808 cents per litre; and

•

the rate for those petroleum products attracting concessional rates of duty is reduced by 0.297 cents per litre to $0.07557 cents per litre.

5.8 The substituted rates are taken to have effect on and from 2 March 2001.

Customs Tariff Amendment Bill (No. 2) 2001

Outline of chapter

5.9 This chapter explains amendments to the Customs Tariff Act that reduce the rates of customs duty for certain petroleum fuels.

5.10 Schedule 1, Part 3, items 17 to 22 substitute new rates of customs duty for the affected subheadings of Schedule 3 to the Customs Tariff Act.

Context of reform

5.11 On 1 March 2001, the Prime Minister announced a package of cuts to fuel taxes. As part of this package, the following changes to the rates of customs duty on certain petroleum products are to be introduced with effect from 2 March 2001:

•

reduce the rates of duty by 1.5 cents per litre for unleaded petrol, leaded petrol, diesel and other petroleum products that attract equivalent rates of duty; and

•

reduce rates of duty for aviation fuels and those petroleum products attracting concessional rates of duty by a proportional amount.

5.12 Changes to the Customs Tariff Act give effect to the Prime Ministers announcement.

Summary of new law

5.13 The rates of customs duty in column 3 for those Customs Tariff subheadings of Schedule 3 to the Customs Tariff Act that attract the unleaded/diesel or leaded petrol rate are repealed and substituted with new rates reflecting a reduction of 1.5 cents per litre.

5.14 The rates of customs duty in column 3 for those Customs Tariff subheadings of Schedule 3 to the Customs Tariff Act that are for use as fuel in aircraft and for those subheadings that attract concessional rates of duty are repealed and substituted with new rates reflecting a reduction per litre that is proportional to that of the 1.5 cents per litre reduction applying to unleaded petrol and diesel.

Detailed explanation of new law

5.15 The rates of customs duty in column 3 for certain Customs Tariff subheadings of Schedule 3 to the Customs Tariff Act are repealed and substituted with new rates, as follows:

•

the rate for unleaded petrol, diesel and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.38143 cents per litre;

•

the rate for leaded petrol and other petroleum products that attract the equivalent rate of duty is reduced by 1.5 cents per litre to $0.40516 cents per litre;

•

the rate for avtur is reduced by 0.112 cents per litre to $0.02845 cents per litre;

•

the rate for aviation gasoline is reduced by 0.110 cents per litre to $0.02808 cents per litre; and

•

the rate for those petroleum products attracting concessional rates of duty is reduced by 0.297 cents per litre to $0.07557 cents per litre.

5.16 The substituted rates are taken to have effect on and from 2 March 2001.