In my budget speech on 4 December 2002, in relation to carbon energy taxation, I said that there would be full consultation with interested parties on the design of the tax.
Subsequently, in July of this year, a carbon energy tax consultation paper was prepared by my Department. This consultation paper was designed to facilitate discussions on the introduction and design of the carbon energy tax while recognising that there are divergent views on the issue. The paper gives a concise overview of the issues relevant to consideration of the proposal including revenue recycling or tax neutrality. Submissions in response to the paper were invited from interested parties to be received in the Department of Finance by today, 30 September 2003.
The issue of revenue neutrality and recycling will be examined – with all other relevant considerations – during the development of the carbon energy tax proposal in the coming months. Such an examination will include consideration of whether the tax should be recycled to the sectors on which it is levied or whether it should be used for other purposes including reducing the tax burden on other sectors. It would not be appropriate for me to comment further on any particular issue at this stage.