Fuel Sales Grants Amendment Regulations 2000 (No. 1) 2000 No. 368
EXPLANATORY STATEMENT
STATUTORY RULES 2000 No. 368
Issued by authority of the Assistant Treasurer
Fuel Sales Grants Scheme Act 2000
Fuel Sales Grants Amendment Regulations 2000 (No. 1)
Section 9 of the Fuel Sales Grants Act 2000 (the Act) provides that the Governor-General may make regulations prescribing matters required to give effect to the Act.
The purpose of the regulations was to correct an anomaly in existing regulations in order to permit a special rate of grant to be paid under the Fuel Sales Grants Scheme where fuel has sold consistently in a remote area for an amount greater than $1.20 per litre.
The Act came into effect on 1 July 2000. The legislation was introduced for the purpose of maintaining fuel price relativities between metropolitan and non-metropolitan areas following the introduction of the goods and services tax and the contemporaneous reduction in the excise rate on fuel. Section 8 of the Act provides for the amount of fuel sales grant payable for a grant period to be worked out in accordance with the regulations.
The principal regulations specify that a grant rate of one cent per litre is payable for sales of petrol and diesel to consumers in non-metropolitan areas and that a grant rate of two cents per litre is payable for sales of petrol and diesel in remote areas. The original regulations also provided that where fuel was sold in a remote area for an amount greater than $1.20 for a litre, the Commissioner of Taxation was able, in a written determination, to set out the circumstances in which a special rate of grant could be paid, and determine the amount payable (Subregulation 6(3)).
However, legal advice was subsequently received that section 8 of the Act, under which the Subregulation 6(3) was made, does not allow a subdelegation of the rule making power. Regulations must contain all of the rules for working out the rate of grant and could not provide for a determination to change or supplement a rule set out in the regulations. As such, Subregulation 6(3) was invalid if it was regarded as allowing a general determination which set out the special rate of grant and the circumstances under which the special rate of grant would be paid.
To resolve this problem this regulation has amended the previous Subregulations 6(2) and 6(3) to prescribe the special rate of grant and the circumstances under which it will be paid.
The regulations provide that the special rate of grant is one cent per litre.
The regulations provide that for the first payment period, a client can claim the special rate of grant for sales of a particular type of fuel if:
a) the client is eligible to claim a grant for sales of that fuel at a site that is in remote zone 2; and
b) the price per litre of that type of fuel at that site has exceeded $1.20 by one cent or more continually for the preceding four weeks; and
c) competitors in the client's same general location are also selling the same type of fuel for a price per litre that exceeds $1.20 by one cent or more.
For subsequent payment periods, a client can claim the special rate of grant for sales of that particular type of fuel if:
a) the price per litre of that type of fuel at that site continues to exceed $1.20; and
b) competitors in the client's same general location continue to sell the same type of fuel for a price per litre that exceeds $1.20.
The regulations provide that if the required conditions in any subsequent payment period are not met then all the prerequisite conditions of the first payment period must be satisfied again to resume entitlement to the special rate of grant.
The regulations commenced on gazettal.
Overview
The Fuel Sales Grants Amendment Regulations 2000 (No. 1), issued under the authority of the Assistant Treasurer, amended the Fuel Sales Grants Scheme Act 2000 to address a regulatory anomaly identified in the original legislation. The Act was introduced to maintain fuel price relativities between metropolitan and non-metropolitan areas following the introduction of the goods and services tax and the reduction in the excise rate on fuel. The 2000 amendment was necessitated by a legal interpretation that the original regulations did not validly allow for a special rate of grant to be set in certain circumstances. The new regulations specify a special rate of grant of one cent per litre for fuel sold in remote areas where the price per litre exceeds $1.20 and competitors are similarly pricing their fuel above $1.20. This amendment ensures that the special rate of grant is properly prescribed within the regulations, thereby avoiding any legal infirmity.
Scope and Application
The Fuel Sales Grants Amendment Regulations 2000 (No. 1) pertains to entities engaged in the sale of petrol and diesel in remote areas, specifically targeting those operating in areas classified as remote zone 2, as defined under the Act. This regulation applies to both the Commonwealth and state or territory jurisdictions where the Act is enforced, thereby ensuring uniform application across Australia. It is designed to address a specific anomaly within the existing regulations by allowing a special rate of grant when fuel is sold at a price exceeding $1.20 per litre in remote areas, following the introduction of the goods and services tax and the reduction in excise on fuel. The Act does not explicitly state any exclusions or exemptions; however, it does establish thresholds and conditions that must be met for the special rate of grant to apply, which include the sustained price of fuel and competitive pricing by other sellers in the same location. These regulations extend the application of the Act through subordinate instruments, ensuring that the primary purpose of maintaining fuel price relativities is achieved effectively.
Key Provisions
The main operative sections of the Fuel Sales Grants Amendment Regulations 2000 (No. 1) (Subregulation 6(2)) clarify the conditions under which a special rate of grant can be paid for fuel sold in remote areas where prices exceed $1.20 per litre. This special rate is set at one cent per litre (Subregulation 6(2)(a)). For the initial payment period, a client can claim this special rate if the fuel price at their site in remote zone 2 has been over $1.20 per litre for the past four weeks and if competitors in the same location are also selling at this price (Subregulation 6(2)(b) and (c)). For subsequent payment periods, the fuel price must continue to exceed $1.20 and competitors must also maintain these prices (Subregulation 6(2)(d) and (e)). If these conditions are not met in subsequent periods, the initial conditions must be satisfied again to resume eligibility (Subregulation 6(2)(f)).
These regulations impose several obligations on parties eligible to claim the special rate of grant. Firstly, they must ensure that the price of the fuel at their remote site has consistently exceeded $1.20 per litre for at least the preceding four weeks for the initial claim period, and must continue to exceed this price for subsequent periods (Subregulation 6(2)(b) and (d)). Additionally, they must verify that competitors in their location are also selling the fuel at a price over $1.20 per litre (Subregulation 6(2)(c) and (e)). Failure to meet these criteria would mean that they cannot claim the special rate of grant for that period. These conditions are designed to ensure that the special rate is only available when fuel prices are genuinely high and competitive in remote areas.
Failure to comply with the provisions of the Fuel Sales Grants Amendment Regulations 2000 (No. 1) could lead to civil or criminal consequences, although the specific penalties are not detailed in the explanatory statement. Generally, breaches of regulations made under the Fuel Sales Grants Scheme Act 2000 may result in fines or other penalties as prescribed by law. The regulations themselves do not specify maximum penalties but refer to the broader legislative framework where such details would be found. It is important for parties to ensure they meet all the conditions to avoid potential legal repercussions.