Senator the Hon. Mathias Cormann
Minister for Finance
Acting Assistant Treasurer
The Government has decided to give practical effect to the fuel excise indexation Budget measure by way of tariff proposals to be validated by Parliament within 12 months.
These tariff proposals will be tabled in the House of Representatives this week and will take effect from 10 November 2014.
As per the ‘alcopops’ precedent used by the previous government, these excise and customs tariff proposals will allow the Australian Taxation Office and the Australian Customs and Border Protection Service to collect the adjusted rate of fuel duty from that date.
Consistent with the Budget measure, the increase in fuel excise will be modest.
From 10 November 2014, the rate of fuel duty will increase from 38.143 cents per litre to 38.6 cents per litre, the rate which would have applied if relevant legislation had been passed by Parliament prior to 1 August 2014.
Indexation of fuel duty will then return to biannual CPI indexation from 1 February 2015.
For a typical household, which consumes 50 litres of fuel per week the estimated price impact of this fuel excise indexation will be about 40 cents per week by the end of 2014-15.
While the impact on individual households will be modest, this measure will provide a predictable and growing source of revenue, which will help the Government boost its investment in job creating and productivity enhancing road infrastructure.
Indeed, the Budget measure reintroducing biannual indexation of fuel excise to CPI is expected to generate additional net revenue of about $2.2 billion over the 2014-15 forward estimates and around $19 billion over the next decade through to 2024-25.
To ensure individuals and businesses who are eligible to claim Fuel Tax Credits and recipients of Cleaner Fuels Grants are not negatively impacted, the Government will move amendments to relevant legislation this week, with the intention of having them passed by Parliament during the current Spring sitting.
The Government’s intention is to ensure that there is no financial impact arising from this implementation by way of tariff proposals over the next 12 months for Fuel Tax Credit recipients, as well as Cleaner Fuels Grant and Ethanol Production Grant recipients.
We continue to implement all of our Budget measures in an orderly and methodical way.
Implementing this important structural fiscal reform will contribute significantly to our efforts to build a stronger, more prosperous economy and to repair the Budget.
Karen Wu – 0428 350 139