EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 307
Issued by the authority of the Minister for Employment and Workplace Relations
Coal Mining Industry (Long Service Leave) Payroll Act 1992
Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1)
Long service leave entitlements in the coal mining industry are administered under the Coal Mining Industry (Long Service Leave Funding) Act 1992 (‘the Funding Act’) through a long service leave funding scheme. Under this scheme, employers are required to pay a levy to fund the ongoing accrual of long service leave entitlements and to extinguish an accumulated unfunded liability.
The Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (‘the Levy Act’) imposes a levy on eligible wages at a rate prescribed by regulations.
Subsection 8(1) of the Levy Act provides that the Governor-General may make regulations prescribing the rate of levy. Since 1993, the Coal Mining Industry (Long Service Leave) Payroll Levy Regulations (‘the Principal Regulations’) have required eligible employers in the coal mining industry to pay a levy of 5 per cent of eligible wages.
The purpose of the Regulations is to reduce the prescribed rate of levy from 5 per cent to 2.8 per cent of the eligible wages paid. The reduced rate of levy is a result of the recent actuarial valuation of the Coal Mining Industry (Long Service Leave) Fund (‘the Fund’) by Mercer Human Resource Consulting.
Subsection 8(2) of the Levy Act provides that, before making a regulation under subsection 8(1), the Governor-General must take into consideration any advice given to the Minister by the Coal Mining Industry (Long Service Leave Funding) Corporation (‘the Corporation’) which manages the Fund. The new rate has been approved by the Board of Directors of the Corporation.
Relevant stakeholders in the coal mining industry have been consulted in the making of these Regulations.
Details of the Regulations are set out in the Attachment.
The Regulations commence on 1 January 2006. The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
Details of the Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1)
Regulation 1 – Name of Regulations
Regulation 1 provides that the name of these Regulations is the Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1)
Regulation 2 - Commencement
Regulation 2 provides that the Regulations commence on 1 January 2006.
Regulation 3 - Amendment of Coal Mining Industry (Long Service Leave) Payroll Levy Regulations
Regulation 3 provides that the Coal Mining Industry (Long Service Leave) Payroll Levy Regulations (‘the Principal Regulations’) are to be amended as set out in Schedule 1.
Schedule 1 – Amendments
Item 1 – Regulation 1
This item amends Regulation 1 to update the full title of the Principal Regulations as the Coal Mining Industry (Long Service Leave) Payroll Levy Regulations 1993, to reflect current drafting practice.
Item 1 – Regulation 4
This item amends the prescribed percentage of the eligible wages paid, for the purposes of section 5 of the Levy Act, by omitting “5 per cent” and inserting “2.8 per cent”.
Overview
The Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1) were enacted to modify the rate of the long service leave payroll levy applicable to the coal mining industry in Australia. This legislative instrument was introduced by the Governor-General in accordance with the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992, which established the framework for levying eligible wages to fund long service leave entitlements within the industry. The primary objective of these regulations was to adjust the levy rate based on recent actuarial assessments, thereby addressing the financial sustainability of the Coal Mining Industry (Long Service Leave) Fund. The reduced levy rate from 5 per cent to 2.8 per cent reflects the updated financial outlook provided by Mercer Human Resource Consulting, taking into account advice from the Coal Mining Industry (Long Service Leave Funding) Corporation, which manages the Fund. These amendments were intended to ensure that the levy remains aligned with the current financial requirements of the industry while consulting with relevant stakeholders to mitigate any adverse impacts.
Scope and Application
The Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1) apply to employers within the coal mining industry who are required to pay a levy to fund long service leave entitlements under the Coal Mining Industry (Long Service Leave Funding) Act 1992. These regulations amend the Coal Mining Industry (Long Service Leave) Payroll Levy Regulations 1993 by reducing the prescribed rate of the payroll levy from 5 per cent to 2.8 per cent of eligible wages. This amendment reflects an updated actuarial valuation of the Coal Mining Industry (Long Service Leave) Fund conducted by Mercer Human Resource Consulting. The regulations are made under the authority of the Minister for Employment and Workplace Relations and have been approved by the Coal Mining Industry (Long Service Leave Funding) Corporation's Board of Directors, following consultation with relevant industry stakeholders. The new levy rate applies from 1 January 2006, and these regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Key Provisions
The Coal Mining Industry (Long Service Leave) Payroll Levy Amendment Regulations 2005 (No. 1) primarily serve to amend the rate of the payroll levy imposed on eligible wages in the coal mining industry, as prescribed under the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (subsection 8(1)). According to Regulation 3, the amendment reduces the rate of the levy from 5 per cent to 2.8 per cent of eligible wages (Regulation 3). This change aims to reflect the recent actuarial valuation of the Coal Mining Industry (Long Service Leave) Fund conducted by Mercer Human Resource Consulting and is intended to ensure the financial sustainability of the long service leave scheme (subsection 8(2)).
The obligations imposed by these Regulations are primarily directed at eligible employers within the coal mining industry. These employers are required to comply with the new levy rate of 2.8 per cent of eligible wages, as amended by Regulation 3, and ensure timely and accurate remittance of the reduced levy to the Coal Mining Industry (Long Service Leave) Fund. The regulations also mandate that any changes to the levy rate must be approved by the Board of Directors of the Coal Mining Industry (Long Service Leave Funding) Corporation, which manages the Fund (subsection 8(2)). Furthermore, relevant stakeholders in the industry were consulted during the development of these Regulations, ensuring that the amendments are practical and feasible for industry participants.
While the Regulations themselves do not explicitly outline specific offences, penalties, or consequences for non-compliance, any breach of the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 or the amended Regulations could potentially lead to enforcement actions by the relevant authorities. Non-compliance with the levy obligations could result in penalties, fines, or legal actions under the Levy Act, which may include civil or criminal sanctions depending on the severity and intent of the breach. Given the importance of funding long service leave entitlements, consistent adherence to these regulatory requirements is crucial for maintaining the integrity and sustainability of the scheme.