Overview

The Fuel Indexation (Road Funding) Special Account Act 2015 was enacted to establish and regulate a special account for the purpose of managing the additional net revenue generated from the introduction of fuel indexation, specifically excise and excise equivalent customs duty on fuels excluding aviation fuels. This legislation was introduced to address a gap in funding specifically for road infrastructure, ensuring that the additional revenue resulting from fuel indexation is directed towards state and territory investments in road infrastructure. The Act was enacted by the Australian Parliament, aiming to provide a stable and dedicated funding stream for road infrastructure improvements across the nation. The policy objective, as outlined in the Act, is to facilitate the transfer of the fuel indexation amount, defined as the net increase in revenue after deducting offsetting tax credits, rebates, and grants, into the COAG Reform Fund for road infrastructure projects.

Scope and Application

The Fuel Indexation (Road Funding) Special Account Act 2015, as determined by the Fuel Indexation (Road Funding) Special Account Determination 2020 (No. 1), applies to the Treasurer who is responsible for managing the Fuel Indexation (Road Funding) special account. This account is specifically established to ensure that the additional net revenue from fuel indexation is used for road infrastructure funding. The Act is geographically and jurisdictionally applicable to the Commonwealth of Australia, with the special account facilitating the transfer of funds to the COAG Reform Fund for investment in road infrastructure across the states and territories. The purpose of the special account is clearly defined to channel the fuel indexation revenue to fund State and Territory road infrastructure projects. The Act allows for the Treasurer to credit the special account based on the calculated fuel indexation amount for a given financial year. The determination of this amount is guided by the rules outlined in the Act, and while the Act provides the framework, the actual crediting of amounts can be extended or restricted through subordinate instruments as specified in section 19 of the Acts Interpretations Act 1901. Notably, the determination made in 2020, crediting $730,000,000.00 to the account, is not subject to disallowance under subsection 8(3) of the Act.

Key Provisions

The main operative sections of the Fuel Indexation (Road Funding) Special Account Determination 2020 (No. 1) include section 8, which authorises the Treasurer to determine the amount to be credited to the special account, and section 9, which outlines the purpose of the account as ensuring that the net revenue from fuel indexation is used for road infrastructure funding. The determination itself specifies that $730,000,000.00 will be credited to the special account on 28 April 2020, which is the fuel indexation amount for the 2018-19 financial year. This amount is determined in accordance with the rules set out in the Act and is based on the net increase in revenue resulting from the introduction of fuel indexation, after accounting for any offsetting increases in tax credits, rebates and grants. The Act imposes several obligations and requirements on the parties it governs. The Treasurer is required to determine the amount to be credited to the special account, taking into account the purpose of the account as specified in section 9. This purpose is to ensure that the additional net revenue from fuel indexation is used to fund State and Territory expenditure on road infrastructure. The Treasurer must also ensure that the determination is made in writing and that it is consistent with the rules set out in the Act. Additionally, the Act requires that any Minister in the Treasury portfolio may, by legislative instrument, determine the amount to be credited to the special account for a financial year. There are no explicit offences or penalties stated for breaches of this determination or the Act. However, the determination is a legislative instrument under the Legislation Act 2003 and is not subject to disallowance due to subsection 8(3) of the Act. This means that while the determination is subject to the normal legislative process, it is not subject to the disallowance process which would otherwise allow for the annulment of the instrument by either house of Parliament. The determination came into effect on the day it was registered on the Federal Register of Legislation, and no consultation was undertaken as it was deemed minor and mechanical in nature.