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ACAPMA calls for a
The AlTernATIve To AlTernATIve
In January 2011, the Australian
Government released a revised draf t
of the Taxation of Alternative Fuels
Legislation Amendment Bill 2011.
The Bill proposes that alternative
fuels used for transport purposes
will be subject to an excise duty or
excise-equivalent customs duty,
phased in over a transition period.
The relevant rate of tax will be based
on each fuel’s energy content, using a
‘banded’ system, discounted according
to the potential benefits of each
fuel. Any alternative fuels acquired,
manufactured or impor ted on or af ter
1 December 2011 would be aff ected,
including stored fuel imported into or
produced locally in Australia before 1
In introducing the Bill, the
government said that it aims to
make the taxation of fuels more
consistent and to ensure that
economic ef ficiency is not damaged
by competition between untaxed and
(currently) taxed fuels. It also aims
to provide certaint y to indus tr y and
improve fuel security.
AC APMA is not convinced that
the Bill will achieve the stated
objectives and, therefore, opposes its
implementation in its current f orm.
Since October 2010, AC APMA
has met with Treasury officials,
the Australian Tax Of fice, and key
members of parliament to discuss
effects that the Bill would have
on AC APMA Members and their
In a briefing document distributed
to relevant politicians and bureaucrats
during meetings in Februar y 2011,
AC APMA noted areas of concern and
the potential impact on motoris ts
and regional independents in the
petroleum dis tribution and petrol
convenience sectors. These include:
• The current supply issues
surrounding alternative f uels are
not addressed. ACAPMA noted that
domestic ethanol production does not
currently meet market demand. This
is reflected in higher wholesale prices
being paid to Australia’s three ethanol
• The excise on alternative fuels,
coupled with implementation and
administration costs, will potentially
increase prices at the pump. Even
without the addition of excise, the
current supply constraints and higher
wholesale prices have eroded the
‘traditional’ 3 cpl differential between
E10 and ULP down to 1 cpl.
• There are inconsistencies in the
treatment of dif ferent f uels and their
timeframes for implementation.
Overall, the timeframe is too shor t.
• The Bill will place a heavy
administrative burden on small-to-
medium sized businesses, which will
be required to collect the tax and
remit the proceeds to government.
• The large amounts of money and
time invested by AC APMA Members
to market alternative f uels would
be wasted, and any competitive
advantages against major oil
• 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 energ y plan.
The draft Bill is a step backwards
and demonstrates a lack of vision.
By adding to the tax burden, it takes
away any incentives for motoris ts
and industr y to participate in the
development of alternative fuels.
We think the federal government
is missing the point. By focussing
on ‘alternative fuels’ ins tead of
considering all ‘transpor t energ y’,
the government is limiting the scope
for effective policy. For example,
no consideration is given to electric
vehicles, which are an alternative to
vehicles powered by liquid fuels.
By developing an integrated
transport energ y plan, Australia would
address the key energ y issues of
economics, ef ficiency and emissions –
issues that are critical for the future of
The AlTernATIve To AlTernATIve
AC APMA believes that Australia needs
a transport energy plan based on
economics, ef ficiency and emissions.
This should begin with phasing out
fuel tax, as recommended in the
Henry Tax Review, and introducing
road user charges based on mass,
time, location and distance. This
would empower motoris ts with the
decision of when and where to pay
their vehicle use taxes.
Directives, similar to those used by
the European Union, should set the
goals for ef ficiency and emissions. A
timetabled framework of directives
would provide original engine
manufacturers and transport energ y
suppliers with the correct incentives to
work together on the best solutions.
The work that Holden and Caltex have
done in the development of the E85
Commodore is a good local example.
Operators in the f uel supply
chain – par ticularly small-to-medium
sized businesses – need incentives
to develop the distribution and retail
infrastructure required to consistently
deliver alternative f uels to motorists,
especially in regional areas.
Consideration of the Bill is
scheduled for the winter session
of parliament (May–July). For more
information, visit www.acapma.com.
au/acapmaction/ or if you would
like to contribute to this vital policy
discussion, call 1300 160 270.
In advocacy and lobbying,
ACAPMA aims for ‘discourse not
discord’. Discussion and education
at the highest levels will lead to
unders tanding and less burdensome
(or at least more inclusive) regulation.
ACAPMA does not seek to support
one party over another. Its role
is to communicate the important
contribution that AC APMA Members
make to our vital industry and to
educate policy makers and regulators
as to the reality that ACAPMA
Members face every day.
By Nic Moulis
by Nic moulis,
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