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2002-2003-2004
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
ENERGY GRANTS (CLEANER FUELS) SCHEME BILL 2003
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by authority of the
Treasurer, the Hon Peter
Costello, MP)
1.1 The amendments extend the transitional period for the introduction of excise on currently untaxed fuels by three years. The amendments define cleaner fuels for which grants will be payable as biodiesel, ethanol, compressed natural gas, liquefied natural gas, methanol and liquefied petroleum gas.
1.2 Under the amendments the grants will be payable to fully offset excise and customs duty imposed on biodiesel from 18 September 2003 until 30 June 2011. Grants will also be paid to partially offset any excise or customs duty imposed on biodiesel, ethanol, compressed natural gas, liquefied natural gas, methanol and liquefied petroleum gas, for a period of four years from 1 July 2011 to 30 June 2015.
1.3 Grants will be worked out as a percentage of the fuel’s excise duty rate, or the excise equivalent component of customs duty if the fuel is imported. The grants will reduce in five even annual instalments from 1 July 2011 to 1 July 2015, raising the effective excise rate on each fuel from zero, before 1 July 2011, to its final rate from 1 July 2015. The final rates of excise will be set equal to the rates outlined in the Prime Minister’s Press Release of 16 December 2003 which are set at a discount of 50% of the full energy content rate.
1.4 Changes to the transitional arrangements will be accompanied by a three year delay in the $1,000 liquefied petroleum gas subsidy announced by the Prime Minister on 16 December 2003. The subsidy payable to consumers who purchase a dedicated or dual fuel liquefied petroleum gas vehicle that is delivered new will now be available from 1 July 2011 – the point at which excise first applies to liquefied petroleum gas. The subsidy will cease on 30 June 2014.