Draft Carbon Tax Legislation Repeal Legislation Revealed: The Road to Redemption

Wednesday 16 October 2013 @ 11.00 a.m. | Taxation | Trade & Commerce

The Australian Government's Department of Environment website has posted a consultation paper and a package of exposure draft legislation designed to begin the processes of repealing the Carbon Tax and is seeking submissions on the proposed laws. The date set for repeal of the tax by the government is 1 July 2014, the repeal is a measure the government is claiming will lower costs for Australian businesses and ease the cost of living pressures for households.

About the Consultation Papers and Draft Laws

The Government explains the purpose of the consultation process as being to:

  • identify any technical issues with the draft carbon tax repeal bills; and
  • identify and manage transitional issues for liable businesses and other entities.

The Consultation Paper released with the draft legislation explains how the Government will repeal the carbon tax, including a detailed explanation of specific provisions necessary to carry out the repeal.

In the consultation paper the Government states the following as key issues driving the repeal process:

  • The tax is to be repealed as soon as possible;
  • 2013-14 will be the last financial year that the carbon tax will apply;
  • The Government will not extend the carbon tax beyond 2013-14, even if the Parliament does not pass the carbon tax repeal bills until after 1 July 2014;
  • Liable businesses and other entities must pay all carbon tax liabilities incurred up to 30 June 2014 under the carbon pricing mechanism, the fuel tax credits system, excise or excise-equivalent customs duties, or synthetic greenhouse gas levies;
  • Liable businesses and other entities must pay their final carbon tax compliance obligations at the next payment time under the current legislated arrangements;
  • Industry assistance provided under the Jobs & Competitiveness Program (JCP) and the Energy Security Fund will continue in 2013-14 for the purpose of meeting carbon tax liabilities;
  • The Australian Competition & Consumer Commission (ACCC) will have new powers to monitor prices and take action against businesses that attempt to exploit other businesses and consumers by charging unreasonably high prices or making false or misleading claims about the effect of the carbon tax repeal on prices;
  • Businesses with a carbon tax liability are obliged to comply with current carbon tax compliance and reporting arrangements. If you have any enquiries about carbon tax compliance, please contact the Clean Energy Regulator;
  • The Climate Change Authority will be abolished.

The package of draft legislation released with the Consultation Paper includes:

  • Clean Energy Legislation (Carbon Tax Repeal) Bill 2013;
  • Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013;
  • Excise Tariff Amendment (Carbon Tax Repeal) Bill 2013;
  • Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013;
  • Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013;
  • True-up Shortfall Levy (Carbon Tax Repeal) Bill 2013;
  • Clean Energy (Income Tax Rates and Other Amendments) Bill 2013;
  • Climate Change Authority (Abolition) Bill 2013;

The Government is seeking submissions from interested parties by 5 pm on Tuesday 29 October 2013.

Reaction to the Not Unexpected Repeal Measures

The ABC reports that the Prime Minister:

 "... is ramping up the pressure on the Labor Party, releasing draft laws to axe the carbon tax with a warning to the Opposition to "repent" of its support for the measure".

While the new opposition leader, far from "repenting" has indicated that the opposition will not give the legislation a "free pass" and will not recognise the mandate to repeal the tax claimed by the Prime Minister and the Government, unless the repeal is also accompanied by the introduction of an Emissions Trading Scheme, the position of the opposition being as the ABC report, quoting Labor's acting environment spokesman indicates:

"the carbon tax must go, but . . . Labor will not support the legislation to repeal it unless an emissions trading scheme is put in place."

An interesting aside to the draft repeal legislation is the report by the ABC that the Federal Environment Minister:

". . . has refused to say if businesses will continue to pay the carbon tax after next June if the Government's repeal bills have not passed".

The indication are that they may have too and that as well some of the big polluters may reap windfalls for carbon credits which will become payable if the tax lingers beyond 2014. 

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

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