Alternative fuels tax criticised

Government tax on alternative fuels is a ‘step backwards’, according to petroleum association

By Ruza Zivkusic | May 13, 2011

The Australasian Convenience and Petroleum Marketers Association (ACAPMA) wants a transport energy plan formed on economics, efficiency and emissions.

ACAPMA General Manager Nic Moulis says the Federal Government’s Taxation of Alternative Fuels Legislation Amendment Bill lacks vision and does not address issues within the transport industry.

"The bill at the moment is a taxation bill in its draft format and that’s really not a way of promoting any incentive either for industry or motorists to participate in a future that has alternative energy. It’s just grabbing taxation money from people," Moulis says.

He believes the Bill will place a heavy burden on small to medium-sized businesses, which will be required to collect the tax and remit the proceeds to government.

"Local communities, especially in regional areas, will suffer as businesses will have less funds and time to support their communities.

"There is no connection between the proposed taxation timetable and the development of a comprehensive transport energy plan."

He describes the Bill as a "step backwards".

"By adding to the tax burden, it takes away any incentives for motorists and industry to participate in the development of alternative fuels.

"By focusing on alternative fuels instead of considering all transport energy, the government is limiting the scope for effective policy.

"By developing an integrated transport energy plan, Australia would address the key energy issues of economics, efficiency and emissions – issues that are critical for the future of all Australians."

The Federal Government announced in the 2010-2011 Budget it would complete the longstanding plan for energy content-based taxation of alternative fuels incorporating a 50 percent discount for alternative fuels and new staged phasing in arrangements for ethanol.

The Assistant Treasurer Bill Shorten says the government has decided to delay the introduction of the taxation on alternative fuels by five months, from July to December this year after considering the concerns of the industry.

"While this delay comes at a cost of $26 million to the budget bottom line, it will allow the industry more time to ensure it is ready," Shorten says.

The draft legislation removes the need for offsetting grants for the gaseous fuels and biodiesel producers.

The Government claims it will encourage innovation by ensuring eligible second generation production processes can be used to produce domestic ethanol and quality for grant.

The fuel taxation changes are phased in over the period beginning December 1, 2011 and ending June 30, 2015.

Grants for eligible ethanol producers will be phased down until July 1, 2020.

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