The Commonwealth Treasury


Tax Expenditures Statement - 2007

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Commodity taxes

Fuel

F1 Higher rate of excise levied on high sulphur diesel
Health ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-165 -180 -90 - - - - -
Tax expenditure type:
Increased rate
2006 TES code:
F3
Commencement date:
1 July 2003
Expiry date:
1 January 2006
Legislative reference:
Excise Tariff Act 1921

Before 1 July 2006, diesel with a sulphur content higher than 50 parts per million was subject to a higher rate of excise than the benchmark rate. The benchmark rate is the rate that applies to unleaded petrol and ultra low sulphur diesel. An excise differential of one cent per litre was implemented from 1 July 2003 and was increased to two cents per litre from 1 January 2004.

From 1 January 2006, diesel with more than 50 parts per million of sulphur no longer meets fuel standards, and is no longer able to be sold unless a waiver is obtained from the Minister for the Environment and Heritage.

F2 Higher rate of excise levied on leaded petrol
Health ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
.. .. .. - - - - -
Tax expenditure type:
Increased rate
2006 TES code:
F2
Commencement date:
1 January 1994
Expiry date:
1 July 2006
Legislative reference:
Excise Tariff Act 1921

Before 1 July 2006, leaded petrol was subject to a higher rate of excise than the benchmark rate. The benchmark rate is the rate that applies to unleaded petrol and ultra low sulphur diesel. The excise differential, which equated to around two cents per litre was originally introduced in 1994 to address health concerns associated with the use of leaded fuels.

The minimal nature of this tax expenditure from 2002-03 reflected the introduction of lead replacement petrol, which is subject to excise at the benchmark rate, and restricted access to leaded petrol (under the Fuel Quality Standards Act 2000) from 1 January 2002. The excise differential was removed on 1 July 2006.

F3 Concessional rate of excise levied on aviation gasoline and aviation turbine fuel
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
745 795 810 870 905 900 900 900
Tax expenditure type:
Concessional rate
2006 TES code:
F5
Commencement date:
15 March 1956
Expiry date:
-
Legislative reference:
Item 10 of the Schedule to the Excise Tariff Act 1921

Aviation gasoline and aviation turbine fuel are subject to a lower rate of excise than the benchmark rate. Aviation gasoline and aviation turbine fuel are currently excised at 2.854 cents per litre. Excise on aviation fuels, has been used to fund the provision of air services by the Australian Government. Excise on aviation fuel is currently directed to the funding of the Civil Aviation Safety Authority.

F4 Excise levied on fuel oil, heating oil and kerosene
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-90 -85 -90 -415 -420 -425 -435 -440
Tax expenditure type:
Increased rate
2006 TES code:
F4
Commencement date:
1983
Expiry date:
-
Legislative reference:
Item 10 of the schedule to the Excise Tariff Act 1921

Before 1 July 2006, fuel oil, heating oil and kerosene that were used as a fuel but not used as a fuel in internal combustion engines were subject to an excise of 7.557 cents per litre. The benchmark excise for fuels consumed for a purpose other than in an internal combustion engine is zero.

Since 1 July 2006, these products have been subject to an excise of 38.143 cents per litre. Users of these products are eligible for a fuel tax credit of 38.143 cents per litre, that effectively removes the incidence of excise.

F5 Excise levied on fuel products used for purposes other than as fuel
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
- - - -65 -65 -65 -65 -65
Tax expenditure type:
Increased rate
2006 TES code:
F1
Commencement date:
1 July 2006
Expiry date:
-
Legislative reference:
Item 10 of the schedule to the Excise Tariff Act 1921

Before 1 July 2006, fuels consumed for a purpose other than in an internal combustion engine were excise-free through other mechanisms.

Since 1 July 2006, fuels consumed for a purpose other than in an internal combustion engine (such as toluene used as a solvent) are subject to excise of 38.143 cents per litre. Business users of these products are eligible for a fuel tax credit of 38.143 cents per litre that effectively removes the incidence of excise.

F6 Exemption from excise for 'alternative fuels'
Fuel and energy ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
680 620 620 680 750 820 910 1030
Tax expenditure type:
Exemption
2006 TES code:
F6
Commencement date:
1985
Expiry date:
-
Legislative reference:
Excise Tariff Act 1921

Certain alternative transport fuels including liquefied petroleum gas (LPG) and compressed natural gas (CNG), are currently exempt from excise duty.

Tobacco

F7 Higher rate of excise levied on cigarettes with less than 0.8 grams of tobacco
Health ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-1320 -1345 -1360 -1395 -1375 -1385 -1395 -1405
Tax expenditure type:
Increased rate
2006 TES code:
F7
Commencement date:
1999
Expiry date:
-
Legislative reference:
Item 5 of the Schedule to the Excise Tariff Act 1921

Cigarettes and cigars with less than 0.8 grams of tobacco are subject to excise at a higher rate than the benchmark. The benchmark excise treatment for the consumption of tobacco products is applied per kilogram of tobacco. The benchmark treatment applies to loose tobacco and to cigarettes and cigars with more than 0.8 grams of tobacco. Cigarettes and cigars with less than 0.8 grams of tobacco are subject to excise on a per stick basis. The effect of per stick excise is to tax the tobacco in these cigarettes and cigars more heavily than the benchmark.

F8 Concessional excise for snuff
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
.. .. .. - - - - -
Tax expenditure type:
Concessional rate
2006 TES code:
F8
Commencement date:
12 February 1902
Expiry date:
30 June 2006
Legislative reference:
Item 5 of the Schedule to the Excise Tariff Act 1921

Before 1 July 2006, snuff was excised at a highly concessional rate compared to other tobacco. Snuff is now excised at the same rate as other tobacco.

Alcohol

F9 Concessional rate of excise levied on brandy
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
5 5 5 5 5 5 5 5
Tax expenditure type:
Concessional rate
2006 TES code:
F18
Commencement date:
9 November 1979
Expiry date:
-
Legislative reference:
Item 3 of the Excise Tariff Act 1921

Brandy is subject to a lower rate of excise than other spirits ($61.21 per litre of pure alcohol, compared to $65.56 at 1 August 2007). The excise rate on brandy is indexed to the consumer price index biannually.

F10 Concessional rate of excise levied on brew-on-premise beer
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
2 2 3 3 4 4 4 5
Tax expenditure type:
Concessional rate
2006 TES code:
F12
Commencement date:
1993
Expiry date:
-
Legislative reference:
Item 1 of Schedule of the Excise Tariff Act 1921

Brew-on-premise beer (that is, beer produced for non-commercial purposes using commercial facilities or equipment) is subject to a lower rate of excise than other beer.

F11 Concessional rate of excise levied on draught beer
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
150 160 160 160 160 170 170 180
Tax expenditure type:
Concessional rate
2006 TES code:
F11
Commencement date:
2001
Expiry date:
-
Legislative reference:
Item 1 of Schedule to the Excise Tariff Act 1921

Draught beer (that is, beer packaged in individual containers exceeding 48 litres) is subject to a lower rate of excise than beer packaged in individual containers not exceeding 48 litres.

F12 Concessional rate of excise on low-strength packaged beer
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
15 15 15 15 15 15 15 15
Tax expenditure type:
Concessional rate
2006 TES code:
F9
Commencement date:
21 August 1984
Expiry date:
-
Legislative reference:
Item 1 of the Schedule to the Excise Tariff Act 1921

Low-strength beer that is packaged in containers not exceeding 48 litres and which has an alcohol content of no more than 3 per cent is taxed at a concessional excise rate relative to higher strength beer. The first 1.15 per cent of alcohol remains free of excise.

F13 Consumption tax exemptions for privately produced beer
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
30 30 35 35 40 40 45 50
Tax expenditure type:
Exemption
2006 TES code:
F14
Commencement date:
18 April 1973
Expiry date:
-
Legislative reference:
Schedule to the Excise Tariff Act 1921

Beer made for personal use by private individuals is exempt from the payment of excise.

F14 Consumption tax exemptions for privately produced wine
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
10 15 10 15 15 15 15 20
Tax expenditure type:
Exemption
2006 TES code:
F17
Commencement date:
19 August 1970
Expiry date:
-
Legislative reference:
A New Tax System (Wine Equalisation Tax) Act 1999

Wine made for personal use by private individuals is exempt from the wine equalisation tax.

F15 Excise concession for microbreweries
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
.. .. .. .. .. .. .. ..
Tax expenditure type:
Concessional rate
2006 TES code:
F13
Commencement date:
2000
Expiry date:
-
Legislative reference:
Paragraph 50(1)(zzd) of the Excise Regulations 1925

Microbreweries producing less than 30,000 litres of product per annum receive excise concessions in the form of a refund of excise paid. The refund paid in any financial year cannot exceed the lesser of $10,000 or 60 per cent of the excise payable.

F16 No excise-free threshold for excisable alcoholic beverages (other than beer) not exceeding 10 per cent alcohol
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-110 -145 -165 -185 -205 -230 -255 -285
Tax expenditure type:
Increased rate
2006 TES code:
F10
Commencement date:
2000
Expiry date:
-
Legislative reference:
Item 1 of Schedule to the Excise Tariff Act 1921

Alcoholic beverages (other than beer) with an alcohol content not exceeding 10 per cent are subject to a higher effective rate of excise than applies under the benchmark. Under the benchmark, which is based on the tax treatment of full strength beer sold in containers less than 48 litres, the first 1.15 per cent of alcoholic content of an alcoholic beverage whose alcohol content does not exceed 10 per cent is not excisable. This excise-free threshold is not available to alcoholic beverages other than beer (mainly ‘ready to drink’ beverages) giving rise to a negative tax expenditure.

F17 Wine equalisation tax cellar door rebate
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
16 4 - - - - - -
Tax expenditure type:
Offset
2006 TES code:
F15
Commencement date:
1 July 2000
Expiry date:
1 October 2004
Legislative reference:
Schedule 9A of the Indirect Tax Legislation Amendment Act 2000

Before 1 October 2004, a partial rebate of wine equalisation tax was available for certain cellar door, mail order and internet sales of wine. The maximum rebate of 14 per cent of the taxable value was available for all eligible sales of wine up to $300,000 per annum (wholesale value). The rebate tapered to zero for sales between $300,000 and $580,000.

The rebate complemented similar State production subsidies of 15 per cent, to support cellar door and mail order sales by smaller winemakers.

The rebate was replaced by the wine equalisation tax producer rebate.

F18 Wine equalisation tax producer rebate
Agriculture, forestry and fishing ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
- 60 115 185 175 195 215 240
Tax expenditure type:
Rebate
2006 TES code:
F16
Commencement date:
1 October 2004
Expiry date:
-
Legislative reference:
A New Tax System (Wine Equalisation Tax) Act 1999

Wine producers receive a rebate of the first $500,000 of wine equalisation tax (WET) paid per annum. Before 1 July 2006, wine producers received a rebate of the first $290,000 of WET paid per annum. The rebate also extends to cider, perry and sake.

The WET producer rebate replaced the WET cellar door rebate scheme from 1 October 2004.

Motor vehicles

F19 Luxury car tax
Other economic affairs - Other economic affairs, nec ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-335 -300 -330 -350 -370 -390 -400 -410
Tax expenditure type:
Increased rate
2006 TES code:
F19
Commencement date:
1 July 2000
Expiry date:
-
Legislative reference:
A New Tax System (Luxury Car Tax) Act 2000

The luxury car tax imposes a tax on the value of car sales and imports that exceed the luxury car tax threshold ($57,123 for the 2007-08 financial year). As motor vehicle purchases are not taxed under the benchmark, the luxury car tax is a negative tax expenditure. The tax does not apply to specified emergency vehicles.

General consumption tax expenditures

F20 Certain exemptions for diplomatic missions and foreign diplomats
General public services - Foreign affairs and economic aid ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
6 7 8 8 9 10 10 10

Note: estimates represent excise duty only.

Tax expenditure type:
Concessional rate
2006 TES code:
F20
Commencement date:
21 August 1940
Expiry date:
-
Legislative reference:
Regulation 50 of the Excise Act 1901
Section 10 of the Diplomatic Privileges and Immunities Act 1967
Section 10 of the Consular Privileges and Immunities Act 1972
Section 11 of the International Organisations (Privileges and Immunities) Act 1963
Section 12 of the Overseas Missions (Privileges and Immunities) Act 1995

Excise, luxury car tax and wine equalisation tax is not payable (or an equivalent amount of that paid is claimable) for alcohol, fuel, motor vehicles and tobacco used for official purposes by diplomatic missions or for personal use by persons identified in the Diplomatic Privileges and Immunities Act 1967.

F21 Certain exemptions for Australian military sea vessels
Defence ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
2 2 1 * * * * *

Note: estimates represent excise duty only.

Tax expenditure type:
Concessional rate
2006 TES code:
F21
Commencement date:
2 August 1934
*Category:
1+
Expiry date:
-
Legislative reference:
Schedule 1 to the Excise Regulations 1925

Excise on tobacco and certain alcoholic products is not payable by Australian military seagoing vessels in full commission when the products are consumed on board.

F22 Customs duty
Mining, manufacturing and construction ($m)
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
-4049 -3859 -3229 -3452 -3682 -3883 -3424 -2875
Tax expenditure type:
Increased rate
2006 TES code:
New
Commencement date:
4 October 1901
Expiry date:
-
Legislative reference:
Customs Act 1901
Customs Tariff Act 1995

Customs duty is collected on certain goods imported into Australia. Under the benchmark, goods imported into Australia are free from customs duty (except for excise-equivalent customs duty).

 

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