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Press Releases

8 July 2001 - 01/313

Joint Press Release - Treasurer and Senator Minchin

The Treasurer, Peter Costello, MP and the Minister for Industry, Science and Resources, Senator Nick Minchin today announced the terms of reference and the membership of the committee of inquiry into fuel taxation, as foreshadowed by the Prime Minister on 1 March 2001.

The Inquiry will commence from today.

Committee of Inquiry Membership

The Committee of Inquiry will be chaired by Mr David Trebeck, Managing Director of ACIL Consulting Pty Ltd, an economic and policy consulting company. Mr Trebeck is based in Canberra. He is also a director of the publicly listed companies Incitec Ltd and Pipers Brook Vineyard Limited.

Through his consulting business, Mr Trebeck has taken particular interest in microeconomic reform and competitiveness issues, including in the agricultural, automotive, fisheries, forestry, aviation, food processing and mining industries. He is a former Deputy Director of the National Farmersí Federation.

The Members of the Committee are Mr John Landels AC and Mr Kevin Hughes.

Mr Landels has considerable experience in corporate management in both the private and public sectors, having held senior executive positions in Australia and internationally, including Chairman and Chief Executive of Caltex Australia Limited (1977-1991); Chairman of the NSW State Transit Authority (1988-1992); Chairman of the NSW State Rail Authority (1992-1996) and Director of Air New Zealand Limited (1993-1998).

Mr Hughes is Chief Executive Officer of the Service Station Association Ltd. Mr Hughes has had an extensive career in the Australian petroleum industry, including 16 years with Shell Co of Australia Ltd, where he held a number of petroleum executive positions encompassing the management of Shellís distributor and Service Station networks. Mr Hughes also established and operated the petroleum wholesale marketing company Hughes Petroleum Pty Ltd for 8 years. In recent years, Mr Hughes has acted as a consultant to the petroleum products industry.

In announcing the Committee membership, the Treasurer and Senator Minchin noted the substantial experience all members of the committee will bring to the inquiry from their in-depth knowledge and understanding of the role that petroleum and other fuel products play in the Australian economy and the community more broadly.

Terms of Reference

Releasing the terms of reference today, Senator Minchin said he had consulted with a wide range of business, transport and motoring organisations since the announcement of the inquiry in March 2001, including writing to more than 20 business and industry organistions seeking their comments on the terms of reference.

The Minister expressed his appreciation to those who had assisted the Government during the consultation process in framing the final terms of reference which are attached.

The Treasurer said the terms of reference requires the Committee to examine the existing structure of fuel taxation in Australia, including related rebates, subsidies and grants and report on the implications for the economy and economic activity, environmental outcomes and petroleum pricing, cost structures and marketing arrangements.

The Treasurer also noted that the terms of reference specifically focuses on community interest in taxes levied on fuel products (ie indirect taxes such as fuel excise and GST). The inquiry will therefore not be required to examine direct taxes as they apply to business involved in fuel production (ie company tax, payroll tax, petroleum resource rent tax).

The inquiry will also examine the proposed Energy Grants (Credits) Scheme (EGS), which will replace the Diesel Fuel Rebate Scheme and the Diesel and Alternative Fuels Grants Scheme from 1 July 2002.

Importantly, the terms of reference explicitly require the inquiry not to impact on the Governmentís previously stated commitment that the EGS will maintain benefits equivalent to those available under the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate Scheme.

This will be a fundamental design principle of the EGS and was specifically included by the Government in the legislation passed by the Parliament implementing the Diesel and Alternative Fuels Grants Scheme (section 4 of the Diesel and Alternative Fuels Grants Scheme Act 1999).

The Treasurer also noted that the inquiry will not consider options that involve long-term real increases in the effective level of diesel or petrol taxes paid by business or private consumers.

Timing and administrative arrangements

The Government announced in the 2001-02 Budget that the inquiry would be supported by a secretariat located in the Department of the Treasury, with funding of $4 million in 2001-02.

The secretariat will comprise officers from various Commonwealth agencies and will be headed by Mr Nigel Bailey, until recently the General Manager of the Treasuryís Indirect Tax Division.

The inquiry will report to the Government in March 2002.

A fuel inquiry website will be available from next week with details of the inquiry and the terms of reference. The address for the web site is http://fueltaxinquiry.treasury.gov.au.

Any questions regarding the inquiry should be directed to:

Fuel Taxation Inquiry
C/- Department of the Treasury
Langton Crescent

Contact: Niki Savva (Treasurerís Office) 0418 868710
Carolyn Coleman (Senator Minchinís Office) 0409 438680

CMR 374-01

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