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Introduction of Alternative Fuels Legislation PDF Print E-mail
Thursday, 12 May 2011 12:51

The Assistant Treasurer, the Hon Bill Shorten, today introduced legislation into Parliament to implement the longstanding alternative fuels taxation policy.

The legislation phases in the taxation arrangements for liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) that were first announced by the Howard Government in 2004.

The new taxation arrangements will start to phase in on 1 December 2011. They will phase in over five years, according to the transition set by the former Government in 2004. The phase in will be complete from 1 July 2015, when the tax will apply on an energy content basis but with a 50 per cent tax discount to recognise the potential environmental, regional development and fuel security benefits of alternative fuel use.

It also includes simplified administrative arrangements for the collection of the excise for the industry to make it easier to transition into the excise system.

"Australia enjoys the lowest LPG prices in the OECD. By introducing taxation on these fuels we bring Australia into line with the taxation treatment of LPG in most other OECD countries," Mr Shorten said.

The Bills introduced today also reflect extensive negotiations with stakeholders and the cross bench MPs. It will ensure renewable fuels play an important part in Australia's transition to a low carbon economy and future energy security.

This will see current taxation arrangements for renewable fuels (ethanol, biodiesel and renewable diesel) continue for the next 10 years. Methanol will continue to be untaxed. The Government will undertake a review of the taxation and grant arrangements for ethanol, biodiesel, renewable diesel and methanol after 30 June 2021.

In addition, the Government will consider the carbon emissions of alternative fuels as part of its consideration of arrangement for fuel under a carbon price.

"The Government remains committed to ensuring that the alternative fuels make an important contribution to transport fuel use in Australia both today and into the future," Mr Shorten said.

"The legislation introduced today also corrects a legislative anomaly that was wilfully ignored by the former Howard Government that would have seen the relative support to renewable fuel industries in Australia end overnight on 1 July 2011."

"I would like to thank industry stakeholders and cross bench MPs who have contributed to the development of the alternative fuels taxation Bills," Mr Shorten said.