Minister for Financial Services & Superannuation
14 September 2010 - 1 July 2013
Release of Exposure Draft Legislation for the Taxation of Alternative Fuels
The Assistant Treasurer, the Hon Bill Shorten, today released draft legislation for public consultation on the Government's reform of the taxation of alternative fuels.
"The draft legislation is consistent with the Government's long standing plan to bring alternative fuels into the fuel taxation regime, with a 50% tax discount compared to regular petrol on an energy equivalent basis. It reflects the Howard Government policy announced in the 2004-05 Budget, as well as the changes announced by the Government in the 2010-11 Budget and as part of the agreement with independent MPs, to recognise the special characteristics of the ethanol industry," Mr Shorten said.
"The draft legislation reflects a substantial public consultation process on implementing the taxation of alternative fuels undertaken over the last three months. This process has received over 47 submissions and has seen meetings from one end of Australia to the other with stakeholders."
Given the Government's commitment to work productively with stakeholders to implement these long-standing plans, the Government has listened to the concerns of industry, and in particular the LPG sector and decided to delay the introduction of taxation on alternative fuels by 5 months, from1 July 2011 to 1 December 2011.
"While this delay comes at a cost of $26 million to the budget bottom line, it will allow the industry more time to ensure it is ready. The Government is committed to implementing this policy effectively and minimising compliance costs. We will continue to work constructively with key stakeholders, particularly on the draft legislation, to ensure this is the case."
The draft legislation removes the need for offsetting grants for the gaseous fuels and biodiesel producers. It encourages innovation by ensuring eligible second generation production processes can be used to produce domestic ethanol and qualify for a grant.
The changes to fuel taxation are being phased in over the period beginning 1 December 2011 and ending 30 June 2015 which allow the alternative fuels industry time to adjust to these changes. Grants to eligible ethanol producers will be phased down until 1 July 2020.
The exposure draft legislation and draft explanatory material as well as a list of specific questions on which feedback is sought are available at www.treasury.gov.au.
The Government will also conduct targeted consultation meetings with key stakeholders on the exposure draft material. The due date for written submissions is the close of business on Friday 18 February 2011.
"I encourage stakeholders to make submissions to the Government on the exposure draft legislation. Stakeholder feedback will continue to play an important role in the design of these legislative changes," said the Assistant Treasurer.
Details of the implementation of the taxation of alternative fuels policy were announced on 13 May 2010 in joint press release No. 99 released by the former Assistant Treasurer and the Minister for Resources and Energy.
21 January 2011