Taxation: Alternative Fuels

Bill Shorten (the Assistant Treasurer), today (24 January 2011) released draft legislation for public consultation on the Government’s reform of the taxation of alternative fuels. 

According to the Assistant Treasurer:

“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,” 

Further 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.”

Changes to fuel taxation are being phased in over the period beginning 1 December 2011 and ending 30 June 2015 which allows the alternative fuels industry time to adjust to the proposed 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 the Treasury website see also previous discussion papers.

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.

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