Changes to the Queensland Fuel Subsidy Scheme
(Taken from Commerce Qld.)

The Queensland Government is currently reviewing the administrative arrangements for the Queensland Fuel Subsidy Scheme. As part of that review process, it has proposed that the existing $0.0834 per litre subsidy be claimed by consumers at the point of sale rather than being delivered to consumers via lower retail prices (as occurs at the moment). Under this approach, the fuel price advertised on service station price boards and pumps would be the unsubsidised price. Retailers would then deduct the subsidy from the advertised price at the point of sale (similar to the existing Coles/Woolworths fuel discount arrangements).

To facilitate these changes, the Government is proposing to introduce some form of card that consumers will need to present in order to claim the subsidy. At this stage, there are two options being considered:
the licence model - the Government would issue bar code stickers free of charge to Queensland licence holders. This sticker would be attached to the licence and consumers would need to present the bar-coded licence at the point of sale in order to claim the subsidy on the fuel purchase; or
the registration model - a separate subsidy card would be issued for every vehicle registered in Queensland. Again, consumers would need to present this card at the point of sale in order to claim the subsidy on the fuel purchase.

Interstate and international visitors would also be eligible to claim the subsidy, but they would need to apply for a separate subsidy card to do so. It is intended that these applicants would be charged an administration fee for the issue of the card.

Implications for business

The proposed changes to the subsidy arrangements will have implications for business, as the failure to present the relevant subsidy card or licence will result in the consumer/business being unable to claim the subsidy for that fuel purchase. Our initial thoughts are that the registration model would be a preferable approach for businesses as it would avoid the need for employees to produce their personal drivers licence at the point of sale when purchasing fuel on behalf of the business (the failure to present an eligible licence would result in the business paying an extra $0.834 on every litre of fuel purchased in the relevant transaction). The registration-based subsidy card could simply be left in the glove box of the business vehicle and used as required by any employee who might be driving the vehicle. It is possible however that non-business consumers will prefer the licence-based approach.

Given that consumers/businesses will not be able to claim the subsidy without a valid card, we also think that it is important that the Government has arrangements in place which allow for the timely issue and replacement of subsidy cards. On this front, we believe the Government may need to make some allowances for businesses located in rural and remote areas of the State given that some of these areas have more limited access to postal services and the internet and may therefore face delays in obtaining a new or replacement card/bar code.

The use of a licence-based bar code or registration-based subsidy card would allow the Office of State Revenue (OSR) to collect electronic data on fuel purchases and match this information with the personal details of the licence or card holder. While we are uncomfortable with the proposed cross-matching of data, we have been assured that OSR only intends to use this data to investigate potential cases of fraud (for example, retailers may run fuel through their tanks repeatedly in order to claim the subsidy multiple times on the same fuel). On this front, OSR has advised that they will be investigating transactions where the fuel purchased by a consumer exceeds 2000 litres per vehicle per site per day

The Government is also proposing changes to the current fuel subsidy arrangements for Bulk End Users (licensed fuel users such as farmers and transport companies which purchase fuel via non-retail arrangements and store it in their own tanks for their own use). These changes would involve the removal of the existing differential record keeping requirements (smaller bulk end users currently have less onerous reporting requirements than larger bulk end users), resulting in an increased compliance burden for some bulk end users.

Footnote:

At a recent Regional meeting in Ipswich, attended by the President, it was put forward by Paul Bidwell of Commerce Qld. that the compliance cost of business collecting the subsidy would be in the region of 2 cents per litre. This cost was to cover the 85% of Qld fuel resellers that would need to install, set-up and maintain a computer system, and establish an internet connection. Most resellers outside of the metropolitan areas do not currently use a computer-based cash register. It is expected that resellers would have to do a daily account of the amount of subsidy given for the day's trade, and get that to the Government to get a rebate paid to them. Remember that they would be paying an unsubsidised price for fuel deliveries, and have to claim that amount back. This effectively means that we go down to about a 6 cents per litre subsidy from what we currently get, adding to the costs of running a business.