EXPLANATORY STATEMENT
Minister for Transport and Regional Services
Australian Land Transport Development Act 1988
DETERMINATION UNDER SECTION 10
This statement is supplied for the determination under subsection 10(2) of the Australian Land Transport Development Act 1988 (the Act) made by the Minister for Transport and Regional Services for the financial year 2003-04.
The Act establishes the Australian Land Transport Development (ALTD) Account into which a specified proportion of excise and customs duty on motor spirit and diesel is credited to fund the ALTD program. The specified portion is termed the ‘charge rate’.
Funds from the Account may be paid to the States and Territories for the construction and maintenance of National Highways, State arterial and local roads, for the construction of Roads of National Importance, and to fund capital railway, urban public transport and Black Spots projects. The Account may also be used to fund land transport and road safety research by approved research organisations.
Section 10 of the Act provides that the Minister may determine the ‘charge rate’ that is used to determine the proportion of excise and customs duty that is credited to the Account.
Subsection 10(2) of the Act provides that the Minister may, after consultation with the Treasurer, determine a rate in cents per litre. Subsection 10(5) provides that a determination comes into force on the first day of the financial year to which it relates.
Since 1992-93 successive governments have determined in the Budget the amount of funding to be provided in a given financial year for the purposes of the Act rather than relying on the charge rate mechanism. Since that time, the charge rate has been determined after the end of the financial year in accordance with the Government’s policy of providing sufficient credits to the Account to equal the funding decided by Government.
The charge rate of 2.8952155605 cents per litre to apply for 2003-04 has been calculated to ensure that credits to the ALTD Account equal the payments made from the Account during 2003-04.
The effect of the charge rate determination will be to ensure that the balance of the Account is zero as at 30 June 2004. The amount of $976.185 million was paid from the Account during the year.
The charge rate for 2003-04 is lower than those for recent years, which over the last nine years have ranged between 3.10 and 3.97 cents per litre. The lower rate is due to the abolition of the Diesel Fuel Rebate Scheme (DFRS).
The formula in the ALTD Act for calculating the charge rate excludes rebates of excise. Up to 2002-03 the charge rate calculations factored in refunds made under the DFRS of around $2 billion per year. This scheme was replaced on 1 July 2003 by the Energy Grants (Credits) Scheme (EGCS), which provides grant payments for those off-road activities which were previously eligible for payment of rebates under the former DFRS. The Australian Government Solicitor has advised that the ECGS, unlike the DFRS, should not be excluded in calculating the charge rate. This has meant more fuel subject to excise is included in the charge rate calculation leading to a lower rate per litre.
While the charge rate for 2003-04 is lower than in previous years, the amount of funding provided in 2003-04 from the ALTD Special Account of $976.185 million was the third highest over the ten years 1994-95 to 2003-04. This amount was exceeded only in 2001-02 and 2002-03.
Australian Government funding for land transport infrastructure is increasing significantly under the AusLink programme.
The determination does not adversely affect any person’s rights nor does it impose liabilities on any person.