MPs want biofuels excise free longer

Coalition backbenchers are pressuring the Federal Government to desist from imposing excise duty on ethanol and other biofuels until well after 2008.

The government's plan is to impose a full duty of 12.5c a litre on these fuels in eight years time, but start a phase in period in 2008.

According to National Party backbenchers De-Anne Kelly, Ron Boswell, Bruce Scott and former NSW Farmers Association president John Cobb, that would not leave enough time for the biofuel industry to become commercially viable.

Meanwhile, diesel users are suffering under the new diesel excise rebate scheme being administered by the Australian Tax Office. Previously Australian Custom Services administered diesel fuel rebates.

Rebates disallowed

A consultant in the industry, who wished to remain anonymous, says that since the ATO took over what is now called the Energy Grants (Credits) Scheme on July 1, previously allowable rebates have been disallowed.

“There seems to be some frustration, as it appears the ATO has taken a different view on some issues. It is now more involved to get a definitive answer on grey areas. Under the previously administered Customs legislation you were able to visit Customs offices, talk the facts through, and if required, Customs officials would visit the site to assist in making their decision.

“Under the ATO's administration, you provide the facts of the query to the ATO and request a private ruling. The ATO will respond in writing to your request. But there is now minimal dialogue in the process,” the consultant said.

There does not seem to be much hope of changing the Canberra mindset that continues to impose excise on the construction industry.

“Knowing how green the Democrats are, and how the coalition parties continue to align themselves with the Democrats – the Democrats don't see the scheme as environmentally friendly - I don't see a Canberra lobbying effort having much effect.

Good of Australia

“So the only chance to progress an argument, would be to get the ear of the key person in government. Then it would be best to push the argument that the end of the excise would be good for Australia,” he said.

The Labour Party too has said recently that it would abolish the rebate scheme.

Currently under the Energy Grants Credit Scheme an on road rebate of 18.51c a litre can be claimed, for diesel fuel consumed in road transport by vehicles greater than 20t gross vehicle mass and for non metropolitan travel for vehicles greater than 4.5t GVM.

Truck-mounted cranes also attract the rebate, but only for the diesel fuel used on road, not diesel fuel used for operating the crane.

All sectors of the mining industry involved in beneficiating extracted product can claim the rebate. The mining definition even applies to dozer operators removing over burden undertaken in the preparation of a site to enable mining to commence. Other industries covered include primary production industries, tourism, marine transport and railways.

The consultant added that it would be interesting to see if the original intention of the diesel fuel excise rebate legislation was to encourage Australian industry. “If it was, there should be a better case for the construction industry to seek inclusion,” he said.

Further information: The ATO's Energy Grants Credit Scheme booklet, 1300 657 162.