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ABC News reports:
A Senate inquiry has warned that the biofuels industry could be threatened by a proposed new fuel tax regime.
The proposed legislation removes fuel tax from a variety of commercial and domestic uses and allows businesses to claim tax credits in their Business Activity Statements (BAS).
The move is designed to cut red tape and reduce costs.
But the Senate inquiry has found that customers of biofuel producers will not be able to claim the fuel tax credit, because of subsidies paid to the industry.
The Government-dominated committee says parts of the bill should be redrafted to ensure the biofuels industry is not deprived of tax credits.
Targets 'on track'
Federal Treasurer Peter Costello says Australia is on track to meet the Government's target for biofuel usage.
The Commonwealth has set a goal of 350 megalitres of ethanol and biodiesel blended fuels by 2010.
Queensland Nationals Senator Barnaby Joyce is concerned that oil companies are not using enough ethanol and wants the Government to mandate its use in fuel.
Mr Costello has told Macquarie Radio he believes the Government's target can be reached.
"We're on our way, my advice is by 2010 - that's a few years off - that we should be able to make it," Mr Costello said.
"We've given incentives to producers who want to investigate and produce these alternative fuels and we'll see how that goes."
The proposed legislation removes fuel tax from a variety of commercial and domestic uses and allows businesses to claim tax credits in their Business Activity Statements (BAS).
The move is designed to cut red tape and reduce costs.
But the Senate inquiry has found that customers of biofuel producers will not be able to claim the fuel tax credit, because of subsidies paid to the industry.
The Government-dominated committee says parts of the bill should be redrafted to ensure the biofuels industry is not deprived of tax credits.
Targets 'on track'
Federal Treasurer Peter Costello says Australia is on track to meet the Government's target for biofuel usage.
The Commonwealth has set a goal of 350 megalitres of ethanol and biodiesel blended fuels by 2010.
Queensland Nationals Senator Barnaby Joyce is concerned that oil companies are not using enough ethanol and wants the Government to mandate its use in fuel.
Mr Costello has told Macquarie Radio he believes the Government's target can be reached.
"We're on our way, my advice is by 2010 - that's a few years off - that we should be able to make it," Mr Costello said.
"We've given incentives to producers who want to investigate and produce these alternative fuels and we'll see how that goes."
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