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Note: This Digest replaces and earlier version dated 13 October
2008.
Bills Digest no. 42 2008–09
Road Charges Legislation Repeal and Amendment Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced:
25 September 2008
House:
Representatives
Portfolio:
Infrastructure, Transport, Regional Development and
Local Government
Commencement:
Sections 1 to 3 on Royal Assent, Schedules 1 and
2 immediately before Schedule 1 of the Interstate Road Transport Charge
Amendment Act (No. 2) 2008, Schedule 3 on 1 January 2009.
Links: The relevant
links to the Bill, Explanatory Memorandum and second reading speech
can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
The purpose
of the Bill is to:
- repeal the Road Transport Charges (Australian Capital Territory)
Act 1993 (the Road Transport Charges (ACT) Act) to allow the Australian
Capital Territory to pass its own legislation
- repeal certain provisions in the Road Transport Reform (Heavy
Vehicles Registration) Act 1997 to remove references to the Road
Transport Charges (ACT) Act consequent upon its repeal
- amend the Fuel Tax Act 2006 to introduce an increase to the
heavy vehicle road user charge from 19.633 cents a litre to 21 cents
a litre of taxable fuel.
The Road Charges Legislation Repeal and Amendment Bill
2008 includes provisions that were contained in the Road Transport (Australian
Capital Territory) Repeal Bill 2008 that was introduced into the House
of Representatives on 13 March 2008. The Road Transport
Charges (Australian Capital Territory) Repeal Bill 2008 Bills Digest,
No.89 2007-08 should be read in conjunction with this Digest.
In addition to Schedule 1 – Repeal of the Road Transport
Charges (Australian Capital Territory) Act 1993 and Schedule 2–Amendments
relating to the repeal of the Road Transport Charges (Australian Capital
Territory) Act 1993 which were contained in the previous Bill, this Bill
contains Schedule 3–Amendment of the Fuel Tax Act 2006. Discussion in
this Bills Digest will focus on the amendments to the Fuel Tax Act
2006.
The 2007 Heavy Vehicle Charges Determination sets the
new registration fees which were unanimously agreed to by transport ministers
at the Australian Transport Council meeting in February 2008.[1] All States have now implemented the registration fees with the
Northern Territory in the process of doing so and these fees apply to
heavy vehicles operating in an intrastate context.[2]
The Australian Capital Territory cannot amend its registration fees until
this Bill has been passed. The Commonwealth legislated on behalf of the
Australian Capital Territory when it passed the Road Transport Charges
(Australian Capital Territory) Act 1993. The legislation also served
as a template for the State and Territory jurisdictions to ensure uniform
charging for heavy vehicles throughout Australia. This approach has now
been overtaken by regulations under the National Transport Commission
Act 2003.
Currently the heavy vehicle road user charge is 19.633
cents per litre of taxable fuel. This rate was determined by the then
Acting Minister for Transport and Regional Services in 2006. Prior to
the introduction of this Bill, the Minister had made a determination to
amend the rate of the road user charge on 11 March 2008 stating that the
new road user charge of 21 cents per litre would commence on 1 January
2009. However this determination was disallowed in the Senate on
14 May 2008.
The amendments in this Bill would increase the ‘default’[3] road user charge to 21 cents per
litre of taxable fuel, and by doing so effectively reduce the amount of
fuel tax credits that can be claimed by eligible persons and entities
using on-road heavy vehicles under Chapter 3 of the Fuel Tax Act 2006.
Fuel tax credits are intended to reduce or remove the incidence of
fuel tax across a range of business-related contexts.[4] In order to claim credits for heavy
vehicles use, the vehicle must travel on a public road in the course of
carrying on a business and must have a gross vehicle mass (GVM) of greater
than 4.5 tonne. If it uses diesel, it must meet one of the environmental
criteria for heavy diesel vehicles manufactured before 1 January 1996.[5]
The full fuel credit rate is currently 38.143 cents per
litre, but for heavy vehicles travelling on a public road, the road user
charge is subtracted from the credit. Thus under the proposed increased
road user charge, the effective fuel tax credit is reduced from
18.51 centres per litre to 17.143 cents per litre.
The amendments also provide that regulations may prescribe
a method of indexing the road user charge, that is, making adjustments
to the road user charge.
According to the Explanatory Memorandum, the increase
to the road user charge of 1.367 cents per litre will decrease Commonwealth
Government Fuel Tax Credit expenses by:
- $40 million in 2008-09
- $110 million in 2009-10
- $150 million in 2010-11
- $190 million in 2011-12.
Schedules 1 and
2 of the Road Charges Legislation Repeal and Amendment Bill 2008
are identical to the first Bill, the Road Transport Charges (Australian
Capital Territory) Repeal Bill 2008. For discussion of these provisions
see the Bills Digest, Road
Transport Charges (Australian Capital Territory) Repeal Bill 2008
Bills Digest, No.89 2007-08.
Schedule 3– Amendment of the Fuel Tax Act 2006
Item 1 amends existing subsection 43-10(3) by
substituting the reference to a determination by the Transport Minister
to the road user charge for the fuel which will be contained in
the principal Act.
Item 4, proposed subsection 43-10(7) provides
a definition of road user charge for taxable fuel and sets a rate of 21
cents for each litre of fuel, unless otherwise prescribed by regulations.
Proposed subsection 43-10(8) provides that the regulations may
prescribe a method for the road user charge to be indexed or adjusted.
Item 9, is an applications provision which
states that these provisions will apply to taxable fuel on or after 1
January 2009.
Moira Coombs
14 October 2008
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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