EXPLANATORY STATEMENT
Issued by the authority of the Minister for Infrastructure, Transport and Regional Development
Fuel Tax Act 2006
Fuel Tax (Road User Charge) Determination 2021
Heavy vehicles with a gross vehicle mass of more than 4.5 tonnes and used on public roads for business purposes are charged to recover that part of the road construction and maintenance costs that are attributable to heavy vehicles (cost recovery). A portion of the costs are recovered by states and territories through heavy vehicle registration charges and a portion by the Commonwealth through the fuel-based road user charge.
The Fuel Tax Act 2006 (the Act) establishes a mechanism for the collection of the Road User Charge by reducing the fuel tax credit provided to eligible businesses and non-profit bodies.
Divisions 41 and 43 of the Act provide that businesses registered or required to be registered for Goods and Services Tax and non-profit bodies are entitled to a partial fuel tax credit for fuel used on a public road for business purposes in registered vehicles with a gross mass of more than 4.5 tonnes. The fuel tax credit claimable is equal to the amount of the effective fuel tax (excise) that is payable on the fuel minus the Road User Charge.
Subsection 43-10(8) of the Act provides that the Transport Minister may determine, by legislative instrument, the rates of the Road User Charge. The Fuel Tax (Road User Charge) Determination 2021 (the Determination) sets the new rate of the Road User Charge for taxable fuels for which duty is payable at a rate per litre of fuel at 26.4 cents per litre.
The National Transport Commission consulted on the increased rate of road user charges of 26.4 cents per litre on behalf of Infrastructure and Transport Ministers from 4 January to 12 March 2021. Stakeholders expressed mixed views about the increased rate. On balance, while acknowledging the merits of assisting heavy vehicle operators recover from the COVID-19 pandemic, the Transport Minister has determined that a small increase to the rate of the Road User Charge is a measured step towards returning to cost recovery. That is, beginning to return to a level of Road User Charge that more truly recovers, as intended, the heavy vehicle share of recent government road expenditure.
The Determination revokes all previous road user charge determinations. This is consistent with subsection 33(3) of the Acts Interpretation Act 1901, which provides that if an Act confers a power to make any instrument of a legislative or administrative character, the power is construed as including a power exercisable in like manner and subject to the like conditions to repeal, rescind, revoke, amend, or vary any such instrument.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003.
Authority: Subsection 43-10(8) of the
Fuel Tax Act 2006
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Fuel Tax Act 2006
Fuel Tax (Road User Charge) Determination 2021
This Disallowable Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Disallowable Legislative Instrument
Subsection 43-10(8) of the Fuel Tax Act 2006 provides that the Transport Minister may determine, by legislative instrument, the rates of the Road User Charge.
In accordance with section 43-10(8) of the Fuel Tax Act 2006, this Disallowable Instrument determines the rates of the Road User Charge applied to taxable fuel used on a public road for business purposes in registered vehicles with a gross mass of more than 4.5 tonnes.
Heavy vehicle charges are based on a combination of a fuel-based Road User Charge, collected by the Commonwealth, and registration charges, which are collected by the states and territories.
Human rights implications
This Disallowable Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Disallowable Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Fuel Tax (Road User Charge) Determination 2021 was enacted to address the need for cost recovery of road construction and maintenance attributable to heavy vehicles with a gross vehicle mass of more than 4.5 tonnes. This legislation, issued by the authority of the Minister for Infrastructure, Transport and Regional Development, is a determination under the Fuel Tax Act 2006, which establishes a mechanism for the collection of the Road User Charge. The policy objective is to ensure that the costs associated with heavy vehicle use on public roads are appropriately recovered, with part of the costs being recovered by the Commonwealth through the fuel-based road user charge. The Determination sets the rate of the Road User Charge at 26.4 cents per litre, a measured increase aimed at achieving a more accurate recovery of the heavy vehicle share of recent government road expenditure. The instrument revokes all previous road user charge determinations and is consistent with the Acts Interpretation Act 1901. The instrument has been assessed for compatibility with human rights and was found not to engage any of the applicable rights or freedoms.
Scope and Application
The Fuel Tax (Road User Charge) Determination 2021, established under the Fuel Tax Act 2006, pertains to heavy vehicles with a gross vehicle mass exceeding 4.5 tonnes used on public roads for business purposes. This legislation sets the rate of the Road User Charge, which is designed to recover a portion of the road construction and maintenance costs attributable to heavy vehicles. The Act applies to businesses registered or required to be registered for Goods and Services Tax and non-profit bodies, providing them with a partial fuel tax credit for fuel used in vehicles over 4.5 tonnes on public roads for business purposes. The Transport Minister determines the rates of the Road User Charge through legislative instruments, such as the Fuel Tax (Road User Charge) Determination 2021, which sets the charge at 26.4 cents per litre of fuel. This legislative instrument revokes all previous road user charge determinations, ensuring consistency with the legislative framework. The Act and its subordinate instruments operate within the Commonwealth jurisdiction and have been reviewed for compatibility with human rights, finding no adverse implications.
Key Provisions
The Fuel Tax Act 2006, through its Divisions 41 and 43, provides a framework for the collection of the Road User Charge, which is designed to recover the portion of road construction and maintenance costs attributable to heavy vehicles with a gross vehicle mass exceeding 4.5 tonnes. These vehicles are used on public roads for business purposes. Eligible businesses and non-profit bodies are entitled to a partial fuel tax credit for fuel used in these vehicles, which is calculated as the amount of the effective fuel tax minus the Road User Charge (section 43-10(8)). This credit aims to ensure that businesses and non-profit bodies are not solely bearing the cost of road maintenance related to heavy vehicles.
The Act imposes specific obligations on businesses and non-profit bodies registered or required to be registered for Goods and Services Tax (GST). These entities must ensure that they claim the correct fuel tax credit for fuel used in vehicles over 4.5 tonnes, ensuring that the Road User Charge is correctly accounted for. The Transport Minister, under the authority of section 43-10(8) of the Act, has the power to determine the rates of the Road User Charge through a legislative instrument. The Fuel Tax (Road User Charge) Determination 2021 sets the new rate at 26.4 cents per litre of fuel, replacing previous determinations and ensuring a consistent approach to cost recovery.
Failure to comply with the requirements of the Fuel Tax Act 2006 may result in various consequences. Under the Act, incorrect claims for fuel tax credits or failure to account for the Road User Charge accurately could lead to financial discrepancies and potential audits by the Australian Taxation Office. While the explanatory statement does not detail specific penalties, non-compliance with tax laws generally can result in civil or criminal penalties, including fines or imprisonment, depending on the severity of the breach. The Act mandates that the Transport Minister’s determinations, such as the Fuel Tax (Road User Charge) Determination 2021, adhere to the legislative process outlined in the Legislation Act 2003, ensuring that any revocation of previous instruments is properly executed.
The Fuel Tax (Road User Charge) Determination 2021 was developed following consultation with stakeholders from 4 January to 12 March 2021, with mixed feedback regarding the increase in the rate of road user charges. Despite the concerns expressed, the Transport Minister determined that a moderate increase to the Road User Charge was necessary to better align with the intended cost recovery for heavy vehicle road usage. This determination, setting the charge at 26.4 cents per litre, reflects a balanced approach to assisting heavy vehicle operators recover from the impacts of the COVID-19 pandemic while ensuring that road maintenance costs are appropriately distributed. The compatibility of this Determination with human rights has been affirmed, as it does not engage any of the applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011.