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It should be noted that the name of this Bill as introduced on 22 October 2009 is actually the Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009. This Bill is identical to the earlier Bill of the same name which was first introduced in the House of Representatives on 14 May 2009, passed unamended on 4 June 2009, but then negatived by the Senate on 13 August 2009.
The addition of the reference ‘[No. 2]’ has been made by the Department of the House of Representatives Table Office to indicate that the Bill is introduced for a second time.
Bills Digest no. 58 2009–10
Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced: 22 October 2009
House: House of Representatives
Portfolio: Home Affairs
Commencement: The main operative sections (Schedule 1) commence on 1
July 2011 provided that section 3 of the Carbon Pollution Reduction Scheme
Act 2009[1] commences before 1 July 2011. All other sections commence on the day of Royal
Assent.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
The purpose of the Bill is to
ensure that reductions in fuel excise, resulting from the government’s
commitment to cut fuel taxes to offset the initial effect on fuel prices of the
Carbon Pollution Reduction Scheme (CPRS), also apply to the customs tariffs (duty)
on imported fuels.
Background
The Customs
Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 (the
original Bill) was first introduced into Parliament on 14 May 2009 as part of
the 11-Bill Carbon Pollution Reduction Scheme (CPRS) package of legislation.
Along with the other CPRS Bills, the original Bill was passed by the House of
Representatives on 4 June, but negatived in the Senate on 13 August 2009.
The content of the current Bill, now titled the Customs
Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No.
2], is identical to the original Bill. As such, this Digest is unchanged from
the Digest produced in June 2009 for the original Bill. For commentary on recent
developments regarding the proposed CPRS, including the reintroduction of the
CPRS Bills, see relevant sections in the revised Digest on the Carbon Pollution
Reduction Scheme Bill [No. 2] 2009.
The Rudd Government made the commitment to cut fuel taxes in
its CPRS White Paper.[2] The government expects that the CPRS will result in higher fuel prices, and
proposes to cut fuel taxes to offset the initial effects of the CPRS on prices.
In essence, the proposal is a form of adjustment assistance to fuel users. The
proposals to reduce fuel excise are contained in the Excise Tariff Amendment
(Carbon Pollution Reduction Scheme) Bill 2009 No. 2]. For further background
and information on the excise proposals, see the Bills Digest for that Bill.
Tariffs (customs duties) on imports are set at the same
levels as excises on comparable domestically-produced goods. A lower rate of
excise than customs duty on a good would amount to ‘protection’ for local
producers of that good. The Bill seeks to ensure that any excise reductions are
also incorporated into reduced customs tariffs. As with the excise proposals, the
Bill provides for:
- a reduction, on 1 July 2011, of 2.455 cents per litre in the
general rate of customs duty on fuels (38.143 cents per litre) to 35.688 cents
per litre for one year
- if warranted, further customs duty reductions on five
‘rate-reducing’ days with the first additional reduction beginning on 1 July
2012 and last on 1 July 2014, and
- the amount of the reductions will depend on how much emissions permit
auction prices have increased.
This Bills Digest should be read in conjunction with the
related Bills Digest for the Excise Tariff Amendment (Carbon Pollution
Reduction Scheme) Bill 2009 [No. 2].
Details of the proposed Carbon Pollution Reduction Scheme
are set out in the Bills Digest for Carbon Pollution Reduction Scheme Bill
2009.
At the time of writing, the
current Bill has not been referred to any committee. The original Bill, along
with the others in the CPRS package, was referred to the Senate Standing Committee on Economics for inquiry
and report by 15 June 2009. Details of the inquiry are at http://www.aph.gov.au/senate/committee/economics_ctte/cprs_2_09/index.htm
The reductions in customs
tariffs will reduce revenue. How much revenue will fall is not clear because
the revenue effects are being recalculated following the Rudd Government’s
decision to delay the implementation of the CPRS for a year and set the unit price
of emissions at $10 for one year.
Schedule 1 of the Bill amends the Customs
Tariff Act 1995 (the Customs Tariff Act).
Item 1 inserts a new section 19A. Proposed
subsection 19A(1) provides for the substitution of a new customs tariff
rate by allowing for, on a ‘rate-reducing day’,[3] the lowering of an existing rate of customs duty (the ‘designated amount’) by
the amount of a ‘rate reduction’.[4]
Proposed subsection 19A(2) defines ‘designated
amount’ to mean $0.35688 (that is, the amount from 1 July 2011):paragraph
19A(2)(a) or, if another amount has been previously substituted, that
substituted amount: paragraph 19A(2)(b). This means that, under proposed
paragraph 19A(2)(b), the designated amount can be an amount that was
inserted on a rate-reducing day.
Proposed subsection 19A(3) provides for the
alteration of the customs tariff rates applying to different fuels, as set out
in various schedules of the Customs Tariff Act, in accordance with proposed subsection
19A(2).
Item 2 contains bulk amendments which substitute
the first revised rate (that is, the $0.35688 per litre applying from 1 July
2011) into the customs tariff schedule which lists all the goods subject to
duty and the respective rates of duty.
Item 3 is an applications provision which provides,
for the absence of doubt, that the rate amendments in item 2 apply only to
goods imported into Australia on or after 1 July 2011 and goods imported into
Australia before that date where the time for working out the import duty on
the goods had not occurred before that date.
© Copyright Commonwealth of Australia
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2464.
Richard Webb
29 October 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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