May 05, 2014 | Graham

Diesel rebate is tax equity not a concession



The diesel rebate is not a concession because excise on diesel is an example of an hypothecated tax.

I pay full excise on the diesel in my Landcruiser because it is used on the road (almost exclusively) and fuel excise is supposed to be used to maintain the roads network.

A hypothecated tax is one where the tax income is earmarked for a particular purpose or purposes.

If the diesel were going into my tractor or my D9 (assuming that I owned either) I would receive the rebate to reflect the fact that neither uses the road system.

As the excise is earmarked for a particular thing it would be unjust to charge me for that if I don’t use it.

You can read the history of fuel rebates to 2001 here up. The diesel rebate has been in existence since 1982.

Claims that the rebate is a concession are just propaganda from mainly green groups who don’t like farming or mining.

The rebate is about equity, not a tax dodge.

It’s about time that journalists, including Chris Uhlman this morning on AM, stopped mindlessly repeating the lie.

I’m particularly annoyed because Chris is one of the best and fairest journalists, and should know better. (Probably does: producers write the scripts that he reads).



Posted by Graham at 8:14 am | Comments (2) |
Filed under: Uncategorized

2 Comments

  1. It is quite appropriate that this topic be discussed.
    Joe says that all Australians must share the burden to rectify the so called budget emergency. All Australians except the mining industry it seems. If what you say is true, it would be quite easy for Joe to give the rebate only to the farmers and not to the miners.
    Big business produced the Audit and funnily it did not recommend any cuts in this area.

    Comment by Ajith — May 5, 2014 @ 9:30 am

  2. Mostly agree Graham, but I would like to add the following.
    Our enormously convoluted tax system probably costs business more than the rebate, just in compliance costs alone.
    And we currently import around 91% of our oil requirements, even though we have billions of barrels of it, as virtually ready to use diesel fuel, laying beneath our feet.
    Our mines department used to drill prospecting holes in mineral rich areas, searching for mineral wealth.
    Maybe they still do?
    A friend of mine, a pilot, used to run a cargo service back in the 70′s, flying materials and supplies to several oil companies, searching for oil in our heartland.
    He claimed that everyone was a gusher, and even so was capped?
    Allegedly, because the reserve wasn’t large enough, or the oil was too light to suit refining. [Mostly the latter? I mean, oil companies make more than half their money transporting and then refining liquid gold. There's not much additional profit, when it comes out of the ground virtually ready to use, almost as is!]
    One enterprising company head, (Santos,) was published in one of the mining papers I used to read regularly, when employed in the industry. And was quoted as claiming, Australian sweet light crude only needs to be cycloned and filtered through a rudimentary sand filter, to remove any impurities, that make it unsafe to use as is, in a diesel engine.
    As I recall, he was pumping the filtered Australian sweet light crude straight into his 70′s something Pajero?
    People in the west, using it in their tractors, (allegedly) complained that the soluble wax content, hardened and blocked the injectors on cold and frosty mornings.
    Removing is child’s play that only requires a additional chill filtering, and very rudimentary fractional filtering techniques.
    The soluble wax is a useful industrial lubricant, or can be subjected to a hydrocarbon cracking process, for all manner of heavy industrial products.
    Albeit, you’d likely need a lot more than we produce, to make doing that, profitable?
    N.Z. oil is loaded with the stuff?
    In fact, one province is mostly wax rather than oil and we have commercial quantities of bituminous coal in Tassie?
    If we but had the gumption to simply and massively reform and simplify our tax system, fuel excise and the unnecessary complexities it alone engenders could go!
    I mean, if you paid a single expenditure tax, and withdrew from your account to buy fuel, you would in effect, be paying the fuel excise!
    But neither you nor the service station proprietor, would have to keep an account of the purchase, there’d just be no point, nor the time wasting associated with our current complex system.
    Foreigners, earning income here, would no longer be able to avoid paying a fair share of the tax, which provides so many of the things, needed to operate here.
    I mean, an educated workforce doesn’t grow on trees, neither does the hospitals that look after them when they’re sick or injured!
    Roads don’t roll out by then selves, neither does rail, albeit, some of the biggest iron ore miners do have private links.
    So, so much of this nonsense could just be rolled back or repealed, if we replaced all that time wasting convoluted complexity, with a single stand alone, unavoidable expenditure tax, that would, impose an unavoidable tax on tax dodgers, even as they attempted to remit or transfer money offshore.
    The same industry publication previously referred to, ventured, that we have an even larger hydrocarbon reserve to our immediate north, than the entire middle east reserves?
    It was a seventies publication, published exclusively for the mining sector.
    It postulated, we had 5 billion barrels of almost ready to use sweet light crude in the Townsville trough alone and considerably more just a little further out!
    5 billion barrels!
    Hell, the oil companies get all excited about a possible 2 billion barrels, in extremely troubled unstable Africa.
    We used to have an oil and gas corporation!
    Just what physical impediment, prevents us from reinstating it and tasking it with exploring our own hydrocarbon resources?
    It would make a huge improvement from just rolling over for international oil cartels, and begging for a tummy rub!?
    The very probable reserves, in the Townsville trough alone, would more than repay any and all reasonable outlays, leaving us with the transportable means of extracting very much more from the furthermost provinces, in our economic zone; without having to find additional sources of revenue!
    The greens bang on endlessly about Co2, but reject our own oil, even though in common usage, from wellhead to harvester/truck/train; traditional Australian sweet light crude produces four times less Co2, in total, than the sulfur laden rubbish we currently import!
    Rationalists bang on about how we should outsource production to countries able to make thing better; but fall strangely silent, when comparing our own indigenous oil, to that quite grossly inferior types we import.
    And yes, we may well be importing finished products, that cost the international cartels less to produce?
    However, we’d pay ourselves far less, just for granting ourselves, the rare privilege of accessing to our own hydrocarbons.
    I don’t know how others’ feel, but I’m through with foreign oil cartels, obtaining oil leases, then shutting it down because they can’t offshore the processing!?
    How much processing does domestic gas need?
    Not a lot, just some fractional distillation and a little scrubbing to remove Co2, and naturally occurring, virtually free LPG! And instead of injecting the Co2 back into the ground, it’d be vastly less costly to produce copious dry ice, and then use it instead of much more harmful gas to keep things cool, and still keeps dong that up to three weeks at a time, even when there’s huge enduring blackouts!
    Sure we should we should crack on and build an alternative fuels industry.
    But with what?
    Who’s is going to fund the large scale operations that would make it economic, and allow us to market fully finished diesel or jet fuel product able to be retailed to be retailed for around 44 cents a litre!?
    The foreign fuel cartels currently providing inferior products for around four times that number? Yeah right!
    You know, when we sold Telstra, the money received, would have completely funded a take over of Woodside Petroleum.
    What’s it worth today, 100 billion perhaps? What’s it earning today, 15+ billions per?
    But no, airheads inside both major parties hae been parroting the same old cliques, that the govt has no business in business, so often, that the same airheads actually believe there’s an actual element of factual truth in it?
    All while Qantas bleats about unfair competition from govt owned airlines, and tiny resource poor Singapore, beats the pants of us in so many areas, including professional pay scales, reported to be on average 2.5 times better than what we average here?
    That’s what you get when you retain control of your own destiny, and indeed, your own economic sovereignty!
    We or rather those we elect to SERVE us, can’t seem to sell of the family farm or the family silver and indeed, their core responsibilities fast enough?
    It’s simply not good enough to say, we may or may not have oil beneath the reef, when every boy and his dog knows that mystery oil slicks, tell us we definitely do have lots of oil out there!
    And gas bubbling to the surface in huge quantities, that may exceed, a million cubic metres a day, tell us two things; that there’s considerable NG out there as well, and we’d be better served harvesting it, or just burning it off, to prevent much more dangerous methane untrammeled entry into the upper
    atmosphere, were id does at least 20 times more damage than Co2!
    The govt is fixated, it would seem, on cuts, as their only idea of how to grow an economy?
    Let me tell you, those two ideas are mutually exclusive!
    Yet, I reasonably believe, based on reasonable information, we sit on trillions of dollars worth of liquid gold!
    Why?
    Well the only valid reason for so doing? Is, I believe, the real political masters, Mr Howard referred to, in a media conference, have instructed them to do so?
    What other possible valid reason could there be?
    The Ideological imperative?
    Surely not?
    If only we were as intelligent as we are lucky, we likely have several dozen oil wells producing almost unimaginable wealth up there, instead of broken down bankrupt tourist venues, tourists are just staying away from in droves!
    Let’s all put our hands together and clap, and give the greens a good slap on their collective backs, with a hearty well down for a result, that simply left as is, helping to send us back to the dark ages, and the agrarian lifestyles, they believe we should have?
    And indeed, the massive depopulation outcomes that very happenstance, must also include, as the only possible, (also ran,) FORCED outcome!
    Alan B. Goulding.

    Comment by Alan B. Goulding — May 5, 2014 @ 12:04 pm

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