Fuel taxes in Australia
Encyclopedia
The fuel tax system in Australia is very similar to Canada
in terms of its double-dipping tax rates, but varies in the case of exemptions including tax credits and certain excise free fuel sources. The double dipping (GST on top of excise) was fully compensated for by lowering the excise at the time the GST was introduced but is still used by motoring groups to convince motorists they are being ripped off. The excise stopped being indexed for inflation in 2001 (see History below) so the effective rate of the excise has been reducing and is now about 22% lower in 2011 dollars. Fuel taxes are handled by the Federal Government, including both an Excise Tax and a Goods and Services Tax
or "GST". The tax collected is partly used to fund national road infrastructure projects and repair roads, however most of it (approximately 75%) goes into general revenue.
The Goods and Services Tax
of 10% is charged and included in the price of all fuel purchases in Australia.
The excise tax on commonly used fuels in Australia
as of June 2006 are as follows:
Note: Petrol used for Aviation is taxed at $0.02854 per litre
There are also a number of various grants
and incentive schemes involving tax credits and rebates that generally apply to businesses or industries that rely heavily on the use of fuels, such as transport
and aviation
. There are also rebates that encourage the production and importation of clean fuels.
these were seen as unconstitutional, so the federal government introduced an excise and gave the revenue to the states.
In 2001, automatic indexing of fuel excise according to CPI was stopped by the Howard Government
after the poor result of the Coalition in the Queensland state election.
The second phase of the Australian Fuel Tax Credits Scheme will come into effect 1 July 2008. Under these changes, all off-road business use of fuel will be eligible for subsidies. In other words, organisations that do not run large vehicle fleets but consume large amounts of fuel business processes (eg. manufacturing, construction, plant operations), are eligible for a fuel tax credit claim.
The State Government of Queensland
used to provide an 8.354c/litre subsidy to most fuels bought (including Unleaded, Blended unleaded, LPG and Ethanol), which reflected the lower franchise fee Queensland charged compared to other states prior to 1997. This was usually reflected by an 8.354/litre difference at the pump price, as the subsidy is paid directly to retailers. This was removed on 1 July 2009.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
in terms of its double-dipping tax rates, but varies in the case of exemptions including tax credits and certain excise free fuel sources. The double dipping (GST on top of excise) was fully compensated for by lowering the excise at the time the GST was introduced but is still used by motoring groups to convince motorists they are being ripped off. The excise stopped being indexed for inflation in 2001 (see History below) so the effective rate of the excise has been reducing and is now about 22% lower in 2011 dollars. Fuel taxes are handled by the Federal Government, including both an Excise Tax and a Goods and Services Tax
Goods and Services Tax (Australia)
The GST is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer....
or "GST". The tax collected is partly used to fund national road infrastructure projects and repair roads, however most of it (approximately 75%) goes into general revenue.
The Goods and Services Tax
Goods and Services Tax (Australia)
The GST is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer....
of 10% is charged and included in the price of all fuel purchases in Australia.
The excise tax on commonly used fuels in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
as of June 2006 are as follows:
- A$0.38143 per litre on Unleaded Petrol fuel (Includes standard, blended (E10) and premium grades)
- A$0.38143/0.40143 per litre on Diesel fuel (Ultra-low sulphur/Conventional)
- A$0.00 (Excise-Free) per litre on Liquified petroleum gasLiquified petroleum gasLiquefied petroleum gas is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles. It is increasingly used as an aerosol propellant and a refrigerant, replacing chlorofluorocarbons in an effort to reduce damage to the ozone layer...
used as fuel (AutogasAutogasAutogas is the common name for liquefied petroleum gas when it is used as a fuel in internal combustion engines in vehicles as well as in stationary applications such as generators. It is a mixture of propane and butane....
or LPG as it is commonly known in Australia) - A$0.38143 per litre on EthanolEthanolEthanol, also called ethyl alcohol, pure alcohol, grain alcohol, or drinking alcohol, is a volatile, flammable, colorless liquid. It is a psychoactive drug and one of the oldest recreational drugs. Best known as the type of alcohol found in alcoholic beverages, it is also used in thermometers, as a...
fuel (Can be reduced/removed via Grants) - A$0.38143 per litre on BiodieselBiodieselBiodiesel refers to a vegetable oil- or animal fat-based diesel fuel consisting of long-chain alkyl esters. Biodiesel is typically made by chemically reacting lipids with an alcohol....
(Can be reduced/removed via Grants)
Note: Petrol used for Aviation is taxed at $0.02854 per litre
There are also a number of various grants
Grant (money)
Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...
and incentive schemes involving tax credits and rebates that generally apply to businesses or industries that rely heavily on the use of fuels, such as transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
and aviation
Aviation
Aviation is the design, development, production, operation, and use of aircraft, especially heavier-than-air aircraft. Aviation is derived from avis, the Latin word for bird.-History:...
. There are also rebates that encourage the production and importation of clean fuels.
History
The states used to levy fuel franchise fees, but after Ha v New South WalesHa v New South Wales
Ha v New South Wales 189 CLR 465 is a High Court of Australia case that dealt with section 90 of the Australian Constitution, which prohibits States from levying excise.-Facts:...
these were seen as unconstitutional, so the federal government introduced an excise and gave the revenue to the states.
In 2001, automatic indexing of fuel excise according to CPI was stopped by the Howard Government
Howard Government
The Howard Government refers to the federal Executive Government of Australia led by Prime Minister John Howard. It was made up of members of the Liberal–National Coalition, which won a majority of seats in the Australian House of Representatives at four successive elections. The Howard Government...
after the poor result of the Coalition in the Queensland state election.
The second phase of the Australian Fuel Tax Credits Scheme will come into effect 1 July 2008. Under these changes, all off-road business use of fuel will be eligible for subsidies. In other words, organisations that do not run large vehicle fleets but consume large amounts of fuel business processes (eg. manufacturing, construction, plant operations), are eligible for a fuel tax credit claim.
The State Government of Queensland
Queensland
Queensland is a state of Australia, occupying the north-eastern section of the mainland continent. It is bordered by the Northern Territory, South Australia and New South Wales to the west, south-west and south respectively. To the east, Queensland is bordered by the Coral Sea and Pacific Ocean...
used to provide an 8.354c/litre subsidy to most fuels bought (including Unleaded, Blended unleaded, LPG and Ethanol), which reflected the lower franchise fee Queensland charged compared to other states prior to 1997. This was usually reflected by an 8.354/litre difference at the pump price, as the subsidy is paid directly to retailers. This was removed on 1 July 2009.