Commonwealth of Australia Explanatory Memoranda

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FUEL TAX (CONSEQUENTIAL AND TRANSITIONAL PROVISIONS) BILL 2006

                            2004-2005-2006



     THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                    HOUSE OF REPRESENTATIVES




FUEL TAX (CONSEQUENTIAL AND TRANSITIONAL PROVISIONS) BILL 2006




         SUPPLEMENTARY EXPLANATORY MEMORANDUM

           Amendments to be moved on behalf of the Government




                     (Circulated by authority of theTreasurer, the
                               Hon Peter Costello MP)
General outline and financial impact
Amendments to the proposed alteration of the definition of
`minerals' under the Energy Grants (Credits) Scheme Act 2003
        These amendments remove provisions of the Fuel Tax (Consequential and
        Transitional Provisions) Bill 2006 intending to alter the definition of
        `minerals' under the Energy Grants (Credits) Scheme Act 2003.

        The effect of the amendments is to retain the current definition of
        `minerals' under the Energy Grants (Credits) Scheme Act 2003 and
        therefore the current eligibility of activities under the Energy Grants
        (Credits) Scheme.

        Date of effect: These amendments will take effect from 29 March 2006,
        the date of introduction of the Fuel Tax (Consequential and Transitional
        Provisions) Bill 2006.

        Proposal announced: Not previously announced.

        Financial impact: These amendments have the financial impact of
        removing the expected fiscal impact of altering the definition of
        `minerals' under the Energy Grants (Credits) Scheme Act 2003, shown in
        the table of financial impact in the explanatory memorandum to the
        Fuel Tax (Consequential and Transitional Provisions) Bill 2006.

        Compliance cost impact: None.




                                                                                   1
Chapter 1
Amendments 1 and 2

Explanation of amendments
        1.1       Amendments 1 and 2 remove the amendments proposed to the
        definition of `minerals' in the Energy Grants (Credits) Scheme Act 2003.

        1.2       The amendments as proposed in the Fuel Tax (Consequential
        and Transitional Provisions) Bill 2006, sought to clarify that the definition
        of `minerals' does not include minerals produced from a synthetic
        production process or from a manufacturing process. It also sought to
        clarify that the exclusion of certain materials from the definition of
        `minerals' also included any inherent constituent materials of those
        materials.

        1.3      These proposed amendments will restore the existing definition
        of `minerals' in the Energy Grants (Credits) Scheme Act 2003. This will
        ensure that activities currently eligible under the Energy Grants (Credits)
        Scheme continue to be eligible for a fuel tax credit.




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