The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Bill Shorten

Bill Shorten

Minister for Financial Services & Superannuation

14 September 2010 - 1 July 2013

Media Release of 15/10/2010

NO.003

Release of Discussion Paper on Alternative Fuels Taxation

Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon Bill Shorten MP, today released a discussion paper for public consultation setting out further details of the Government's reforms to the taxation of alternative fuels.

"The reforms will provide support to the alternative fuels industry in recognition of the potential environmental and regional development benefits that these industries generate while at the same time introducing greater consistency in the taxation of fuels used for transport purposes," said the Assistant Treasurer.

"The reforms will deliver certainty for industry and fuel users and ensure that they can make decisions in the future with confidence."

The Government confirmed, in the 2010-11 Budget, that it would complete the longstanding plan for the taxation of alternative fuels with revised arrangements for ethanol. The changes are to be legislated by 1 July 2011 to complete the implementation of the previously announced policy.

The Government further announced that the arrangements applying for ethanol would be revised to ensure that there is appropriate support for Australian ethanol producers. On 7 September 2010, the Government announced it would be extending the transition period under which this assistance is provided until 1 July 2020 so that there will be a more gradual phase down of the grants payable to domestic ethanol producers.

The discussion paper seeks feedback on a range of aspects to ensure the proposed arrangements are practical and effective, including:

  • the delivery mechanism for phasing in excise for gaseous fuels and biodiesel;
  • the delivery mechanism for providing assistance to domestic ethanol producers;
  • the taxation point for gaseous fuels;
  • the measurement standard for compressed natural gas; and
  • the current and potential future use of methanol as a transport fuel.

The reforms to fuel taxation are being phased in over the period beginning 1 July 2011. Grants to Australian ethanol producers will be phased down until 1 July 2020.

The discussion paper is available on the Treasury website.

The Government will conduct targeted consultations with key stakeholders in October and November on the reforms. Submissions close on Friday, 12 November 2010.

"I urge affected stakeholders to provide feedback to the Government on the implementation of these reforms. Stakeholder feedback will play an important role in designing these legislative changes," said the Assistant Treasurer.

Details of the implementation of the 50 per cent tax discount for alternative fuels were announced on 13 May 2010 in joint press release no. 99 with the former Assistant Treasurer and the Minister for Resources, Energy and Tourism.

Exposure draft legislation and draft explanatory material will be released at a later time for consultation.

15 October 2010