DIESEL fuel users, particularly in the mining and agricultural sector face an uncertain future with the introduction of the Energy Grant Credit Scheme into Federal Parliament last week.
Central to the legislation contained in the Energy Grants (Credits) Scheme Bill 2003 and the Energy Grants (Credits) Scheme (Consequential Amendments) Bill 2003, is the merging of the diesel fuel rebate scheme and the alternative fuel grant scheme into a single grant scheme.
Association of Mining and Exploration Companies chief executive George Savell said the association was employing the services of taxation specialists to carefully go through every aspect of the legislation.
“Our main aim is to make sure our members are not negatively impacted through the transition process, and to see if there are any unintended drafting problems,” Mr Savell said.
“We are going to look at it very carefully. There is a terrible history under the old diesel rebate scheme of the Government clawing back the rebates.
“You can forgive us for being cynical and a little suspicious of the legislation.”
Equally sceptical of the Government’s intent is the farming lobby.
WA Farmers Federation executive officer of economics and transport Ross Hardwick said the uncertainty the legislation created would add to the complexity and paper work farmers already had to deal with under the current system.
Mr Hardwick said he believed the Government had been hijacked by the environmental lobby groups. He said the result was that the scheme had turned into an environment tax.
Customs and Excise specialist and PricewaterhouseCoopers partner Ross Thorpe said the new legislation would put an end to the direct link between tax and rebate while gaps remained in relation to how the new credit values and the mechanism would be determined.
“The failure to disclose the details of the mechanism and the credit rates to be applied to each fuel type make it very difficult to assess what impact this will have on the bottom-line for Australian companies,” he said.
“Currently there is no transparency regarding how credits will be linked to diesel fuel costs.
“We strongly suggest that businesses press Government to clarify these points as soon as possible.”
One positive, according to Mr Thorpe, is the timing of any credit relief fuel users receive.
“We are pleased to see that all diesel fuel users will be able to lodge credit claims for fuel at the time of purchase under the CGES, whereas under the current system, on-road claims can only be lodged after consumption,” he said.
Introducing the bills into Parliament the Treasurer Peter Costello said the amalgamation of the schemes also would encourage conversion to cleaner fuels.
“The Government is committed to pursuing options to achieve this and is doing so by examining the issue as part of the consideration of alternative fuels within the Energy Task Force.
“This bill gives effect to the commitment made by the Government in May 1999 under Measures for a Better Environment.”
Last year the Government commissioned ACIL Consulting managing director David Trebeck to undertake a study and make recommendations on reforming the fuel tax system.
His Fuel Taxation Report, which recommended the indexation of the fuel excise, was soundly rejected by the Government.
Addressing the Australian Institute of Energy in August last year, Mr Trebeck remained highly critical of the Government’s decision to reject his report.
“At present, the fuel tax regime is complex and messy,” he said.
“It reflects ad hoc development over many years, changing objectives, vested interest lobbying and inadequate explanation by successive governments to the wider community.”
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