EXPLANATORY STATEMENT
Issued by authority of the Assistant Treasurer, Minister for Housing and Minister for Homelessness, Social and Community Housing
Fuel Indexation (Road Funding) Special Account Act 2015
Fuel Indexation (Road Funding) Special Account Determination 2022
Subsection 8(1) of the Fuel Indexation (Road Funding) Special Account Act 2015 (the Act) provides that the Minister may determine, by writing, that a specified amount is to be credited to the Fuel Indexation (Road Funding) special account (the special account) on a specified day.
The Act establishes and provides rules for the operation of the special account to ensure that the additional net revenue from the introduction of fuel indexation (that is, the indexation of excise and excise equivalent customs duty applying to fuels, other than aviation fuels) is used for road infrastructure funding.
Under the rules set out in section 8 of the Act, the Minister may, in writing, determine that an amount is to be credited to the special account. In determining this amount, the Minister must have regard to the purpose of the special account. Section 9 of the Act specifies that the purpose of the special account is to ensure that amounts equal to the fuel indexation amount for a financial year are transferred into the COAG Reform Fund, to fund State and Territory expenditure in relation to investment in Australian road infrastructure.
The fuel indexation amount for a financial year is defined by subsection 9(2) of the Act as, broadly, the net increase in revenue in that financial year resulting from the re‑introduction of fuel indexation in 2014, after deducting any offsetting increases in tax credits, rebates and grants that also resulted from the indexation.
This determination provides for $1,001,000,000.00 to be credited to the Fuel Indexation (Road Funding) special account on the day the determination commenced. This amount is equal to the fuel indexation amount for the 2020-21 financial year.
This determination commenced on the day after it was registered on the Federal Register of Legislation.
Under subsection 8(3) of the Act, the determination is a legislative instrument but is not subject to disallowance, as the instrument is largely machinery in nature where the amount being determined is simply a statement of fact to be derived from data held by the Australian Government. The Minister does not have a broad discretion to determine the amount to credit to the special account as the Minister must have regard to the purpose of the account.
Treating the determination as not disallowable minimises uncertainty. The risk of disallowance would delay decisions to apply the amounts in the special account for road infrastructure funding until after the disallowance period had expired. Delays would also occur if the instrument was disallowed and arrangements needed to be put in place for remaking a revised instrument or legislation needed to be passed to give effect to the intended operation of the determination.
The instrument will sunset in accordance with Part 4 of the Legislation Act 2003.
No consultation was undertaken on this determination as it is minor and mechanical in nature, only involving the determination of an amount from available data, consistent with the rules set out in sections 8 and 9 of the Act.
Overview
The Fuel Indexation (Road Funding) Special Account Act 2015 was enacted to address the need for dedicated funding for road infrastructure from the revenue generated by fuel indexation. The Act establishes a special account to ensure that additional net revenue from the introduction of fuel indexation is used for road infrastructure funding. The determination of the amount to be credited to the account is made by the Minister, who must consider the purpose of the account, which is to fund State and Territory expenditure on Australian road infrastructure. The Fuel Indexation (Road Funding) Special Account Determination 2022 credits $1,001,000,000.00 to the special account, equal to the fuel indexation amount for the 2020-21 financial year, and was introduced by the Minister under the authority provided by the Act. This determination is not subject to disallowance as it is largely mechanical and based on factual data, aiming to ensure timely funding for road infrastructure projects.
Scope and Application
The Fuel Indexation (Road Funding) Special Account Act 2015 establishes a special account to ensure that the additional net revenue from the introduction of fuel indexation is used for road infrastructure funding. The Act applies to the Minister for Housing and Minister for Homelessness, Social and Community Housing, who is responsible for determining the amount to be credited to the special account. The account is intended to channel funds to the COAG Reform Fund for investment in Australian road infrastructure. This legislation applies nationally, with its reach extending across all states and territories. The Act is not subject to disallowance, as the determination is largely mechanical in nature, and the amount to be credited to the special account is derived from data held by the Australian Government. The Minister’s discretion in determining the amount is constrained by the purpose of the account, which is to transfer amounts equal to the fuel indexation amount for a financial year. The special account determination, which is a legislative instrument, will sunset in accordance with the Legislation Act 2003, ensuring that the account operates within a defined timeframe.
Key Provisions
The Fuel Indexation (Road Funding) Special Account Determination 2022 (subsection 8(1)) establishes that $1,001,000,000.00 is to be credited to the Fuel Indexation (Road Funding) special account. This determination is based on the fuel indexation amount for the 2020-21 financial year, which is defined by the Act as the net increase in revenue from the re-introduction of fuel indexation, after deducting any offsetting increases in tax credits, rebates, and grants (subsection 9(2)). The purpose of the special account, as specified in section 9 of the Act, is to ensure that amounts equal to the fuel indexation amount for a financial year are transferred into the COAG Reform Fund to fund State and Territory expenditure on Australian road infrastructure.
The Act imposes several obligations and requirements on the Minister. The Minister must have regard to the purpose of the special account when determining the amount to be credited to it (subsection 8(2)). The Minister must also ensure that the additional net revenue from fuel indexation is used for road infrastructure funding, as outlined in section 9. The determination itself must comply with the legislative framework established by the Fuel Indexation (Road Funding) Special Account Act 2015, which includes the requirement to credit the determined amount to the special account on a specified day.
The Act does not explicitly state any offences, penalties, or civil or criminal consequences for breaches. However, the importance of the special account in funding road infrastructure implies a significant responsibility on the Minister to ensure compliance with the Act's provisions. The determination, being largely a statement of fact derived from available data and consistent with the rules set out in the Act, is not subject to disallowance under subsection 8(3). This ensures that the crediting of the determined amount to the special account can proceed without delay, which is critical for the uninterrupted funding of road infrastructure projects. The determination will sunset in accordance with Part 4 of the Legislation Act 2003, ensuring that it remains in effect for the intended period before automatic expiry.