Australian Government And Opposition Scrap Over Condensate Taxation

by Mary Swire, Tax-News.com, Hong Kong

26 August 2008

It emerged on Tuesday that the opposition coalition may move to block key revenue raising measures being considered by Australia's Rudd government as it readies its first budget.

According to reports in the Australian media, the Liberal Party is arguing that a planned move to remove the tax exemption on condensate (a type of light crude oil), which has been in place for more than three decades, would result in the additional cost being passed on to the end consumer.

It is thought that the removal of the tax break would bring the Labour government around AUD564mn in the next fiscal year, and around AUD2.5bn over a four year period.

This is not the first of the Rudd administration's tax proposals to come under fire, with the Coalition also threatening to derail a tax hike on ready to drink alcoholic products and amendments to the Medicare levy regime, and the Green Party calling for a tax increase on luxury cars to be targeted more narrowly at "gas guzzlers".

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