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.
Overview
The Australian Land Transport Development Act 1988 was enacted to establish the Australian Land Transport Development (ALTD) Account, which receives a proportion of excise and customs duty on motor spirit and diesel to fund various land transport infrastructure projects. The Act was introduced to address the need for a dedicated funding source to support the construction, maintenance, and improvement of national highways, state arterial and local roads, as well as capital railway, urban public transport, and Black Spots projects. The charge rate, determined by the Minister for Transport and Regional Services under section 10 of the Act, is intended to ensure that credits to the ALTD Account match the payments made from the Account. For the financial year 2003-04, the charge rate was set at 2.8952155605 cents per litre, a decrease from previous years due to the abolition of the Diesel Fuel Rebate Scheme and its replacement by the Energy Grants (Credits) Scheme, which affects the calculation of the charge rate. The policy objective is to maintain a balance of zero in the ALTD Account as at the end of each financial year, while ensuring sufficient funding is available to support critical land transport infrastructure projects across Australia.
Scope and Application
The Australian Land Transport Development Act 1988, as determined by the Minister for Transport and Regional Services for the financial year 2003-04, outlines the funding mechanism for the Australian Land Transport Development (ALTD) Account, which receives a specified proportion of excise and customs duty on motor spirit and diesel. This Act applies to the Australian Government and the states and territories, specifically in relation to the crediting and disbursement of funds within the ALTD Account for land transport infrastructure projects, including National Highways, State arterial and local roads, Roads of National Importance, and capital railway, urban public transport, and Black Spots projects. Additionally, the Act facilitates funding for land transport and road safety research by approved research organisations. The geographic and jurisdictional reach of the Act encompasses the entire Commonwealth of Australia, as it involves national funding and infrastructure projects. The Act does not impose any new liabilities or adversely affect any person's rights; rather, it operates to ensure the effective allocation of funds for land transport development. The charge rate for 2003-04 was determined to be 2.8952155605 cents per litre, a figure calculated to ensure the balance of the ALTD Account is zero as at 30 June 2004. This charge rate reflects the abolition of the Diesel Fuel Rebate Scheme, resulting in a lower rate compared to recent years.
Key Provisions
The Australian Land Transport Development Act 1988, as referenced in the Explanatory Statement issued by the Minister for Transport and Regional Services for the financial year 2003-04, establishes the Australian Land Transport Development (ALTD) Account (Section 10). This account is funded by a specific proportion of excise and customs duty on motor spirit and diesel, termed the 'charge rate'. The Act allows the Minister to determine this charge rate in cents per litre, which is then used to calculate the proportion of excise and customs duty credited to the ALTD Account. Funds from this account are allocated for the construction and maintenance of National Highways, State arterial and local roads, Roads of National Importance, and for capital railway, urban public transport, and Black Spots projects. Additionally, the ALTD Account can fund land transport and road safety research by approved research organisations.
Under the Act, the Minister for Transport and Regional Services has an obligation to determine the charge rate after consulting with the Treasurer. This charge rate is calculated to ensure that the credits to the ALTD Account equal the payments made from the account during the financial year. The determination of the charge rate is designed to maintain the balance of the ALTD Account at zero by the end of the financial year. The determination also takes into account any changes in policy, such as the abolition of the Diesel Fuel Rebate Scheme (DFRS) and its replacement by the Energy Grants (Credits) Scheme (EGCS), which affects the calculation of the charge rate.
The Explanatory Statement clarifies that the determination of the charge rate does not adversely affect any person's rights nor does it impose any liabilities on individuals or entities. The charge rate for the financial year 2003-04 was set at 2.8952155605 cents per litre, which was lower than in recent years but still resulted in the third highest funding amount of $976.185 million from the ALTD Special Account. This funding amount was lower than that of 2001-02 and 2002-03, reflecting the changes in policy and funding mechanisms.
The Explanatory Statement also highlights that the Australian Government funding for land transport infrastructure is increasing significantly under the AusLink programme. This increase in funding is in line with the broader policy objectives of the Australian Government to enhance land transport infrastructure. Despite the lower charge rate for 2003-04, the Act ensures that sufficient funds are credited to the ALTD Account to meet the funding needs for the specified projects and initiatives. Any breaches of the Act or failure to comply with the determined charge rate could potentially lead to financial discrepancies in the ALTD Account, although specific penalties or consequences are not detailed in the Explanatory Statement.