EXPLANATORY STATEMENT
Issued by the authority of the Minister for Resources and Northern Australia
Excise Tariff Act 1921
Excise Tariff (Fields) Guidelines 2018
Purpose and Operation
Australia’s excise system applies to the manufacture within Australia of fuel, tobacco and certain alcohol. Excise duty applies to a range of liquid and gaseous fuels and petroleum oil based products including the manufacture of stabilised crude petroleum oil and condensate produced from onshore, coastal waters and in the North West Shelf project area. Elsewhere offshore the Petroleum Resource Rent Tax applies. Excise is levied under the Excise Tariff Act 1921 on individual hydrocarbon fields which have a cumulative production in excess of 4,767.3 megalitres (30 million barrels). A method must be used to delineate hydrocarbon fields so that each separate field is allocated its first 30 million barrels as excise exempt. The Minister for Resources and Northern Australia receives expert technical advice from government bodies which includes, but is not limited to, consideration of a one kilometre horizontal separation between hydrocarbon pools; i.e. two accumulations which are separated by one kilometre or more may be considered separate fields.
The Excise Tariff (Fields) Guidelines 2018 (the 2018 Guidelines) replaces the Excise Tariff (Fields) Guidelines (the 2008 Guidelines), which are due to sunset on 1 October 2018. The Department of Industry, Innovation and Science (the department) has undertaken a review of the 2008 Guidelines and determined that they should be remade without substantive change.
Authority
Section 3A of the Excise Tariff Act 1921 authorises the Resources Minister to make guidelines to be taken into account by the CEO (the Commissioner of Taxation) in making By-laws prescribing a field for the purposes of the definition of onshore field or exempt offshore field.
Consultation
Geoscience Australia and the Treasury were consulted as part of the department’s development of the 2018 Guidelines. As the policy intent is not being altered, no industry consultation has been undertaken. The only amendments are minor and administrative in nature.
Regulatory Impact
The Office of Best Practice Regulation (OBPR) has confirmed that a Regulation Impact Statement is not required for the 2018 Guidelines. The OBPR reference is ID 23980.
Details of the Excise Tariff (Fields) Guidelines 2018
Section 1 – Name of Instrument
This section specifies the name of the instrument as the Excise Tariff (Fields) Guidelines 2018 (the 2018 Guidelines).
Section 2 – Commencement
This section provides that the 2018 Guidelines commence on the day after the instrument is registered on the Federal Register of Legislation.
Section 3 – Authority
This section sets out the provision of the Excise Tariff Act 1921 (the Act) under which the 2018 Guidelines is made. The applicable provision that provides authority is section 3A.
Section 4 – Definitions
This section provides for definitions of terms used in the 2018 Guidelines.
Section 5 – Schedules
This section is a machinery provision that allows the Schedule to operate according to its terms.
Section 6 – Definition of field
This section provides a definition of field to provide clarity regarding the application of the term in the Act.
Schedule 1 – Repeals
This Schedule repeals the Excise Tariff (Fields) Guidelines, which is due to sunset on 1 October 2018.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Excise Tariff (Fields) Guidelines 2018
The Excise Tariff (Fields) Guidelines 2018 (the 2018 Guidelines) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
For the purposes of section 3A of the Excise Tariff Act 1921, the CEO (the Commissioner of Taxation) must take into account the 2018 Guidelines when making By-laws prescribing a field for the purposes of the definition of onshore field or exempt offshore field.
Human rights implications
The 2018 Guidelines do not engage any of the applicable rights or freedoms.
Conclusion
The 2018 Guidelines are compatible with human rights as they does not raise any human rights issues.
Senator the Honourable Matthew Canavan
Minister for Resources and Northern Australia