Terms of Reference
- The inquiry is requested to examine the total existing structure of Commonwealth
and state taxation of petroleum products, and petroleum substitute products,
particularly for transport and off road use (but not for commercial electricity
generation) and related rebates, subsidies and grants, including the proposed
Energy Grants (Credits) Scheme and other fuel related measures proposed as
part of Measures for a Better Environment.
- The inquiry will not impact upon the government’s commitment that the Energy
Credits Scheme will maintain benefits equivalent to those available under
the Diesel and Alternative Fuels Grants Scheme and the Diesel Fuel Rebate
- Further, given the government’s concern about the impact of high world oil
prices, 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.
- The inquiry will report on:
The inquiry should have regard to the impact of existing arrangements and
proposed changes on:
- The effects on the efficient allocation of resources, taking into account
the pivotal role that petroleum products play in economic activity; environmental
outcomes, including in relation to transport; and as an input to production
- The interplay between fuel taxation and related issues such as petroleum
pricing, cost structures and marketing arrangements with particular attention
to the effects on competition (in particular, access to supply) and the
efficiency and international competitiveness of Australian industries.
- The options available to the government to reduce or eliminate any adverse
effects reported under (a) and (b) above, including any anomalies or inequities
arising from the existing arrangements for industry and consumers;
- The options available to the government to reduce the cost or improve
the effectiveness of the administration of the existing and proposed arrangements;
- Implementation strategies for options identified under (c) and (d) above.
- The overall economic performance of the Australian economy, including
promoting domestic competition and international competitiveness;
- Fuel suppliers, downstream industries and consumers;
- The welfare of regional, rural and remote communities;
- Externalities associated with transport;
- The use of fuels that would deliver better air quality and contribute
to greenhouse objectives; and
- The flexibility and sustainability of government revenue.
The inquiry should take into account the government’s wish to achieve
overall budget neutrality in relation to petroleum products in its recommendations.
The existing income tax arrangements affecting petroleum producers and
distributors and excise on the production of crude oil are excluded from
the scope of the review.
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