Legislation (Shipping Reform (Tax Incentives) Instruments) Sunset-altering Declaration 2022

EXPLANATORY STATEMENT

INTRODUCTION

The Legislation (Shipping Reform (Tax Incentives) Instruments) Sunset-altering Declaration 2022 (the Declaration) is made under subsection 51A(1) of the Legislation Act 2003 (Cth) (the Legislation Act). It is a legislative instrument for the purposes of the Legislation Act and must be registered on the Federal Register of Legislation. The Declaration is subject to the disallowance provisions of the Legislation Act.

OUTLINE

Sunsetting is the automatic repeal of legislative instruments after a fixed period. The Australian Government’s sunsetting framework is established under Part 4 of Chapter 3 of the Legislation Act. The purpose of the sunsetting framework is to ensure that legislative instruments are kept up to date and only remain in force for so long as they are needed.

Subsection 50(1) of the Legislation Act provides that a legislative instrument is automatically repealed on the 1 April or 1 October immediately on or following the tenth anniversary of its registration.

Under subsection 51A(1) of the Legislation Act, the Attorney-General may issue a declaration aligning the sunsetting days of two or more instruments, if satisfied on application by the rule-maker of the relevant instruments that:

The objective of issuing a sunset-altering declaration is to facilitate either: the undertaking of a single review into the fitness-for-purpose of two or more thematically related legislative instruments; or the implementation of such a review’s findings. This reduces administrative burden as well as the possibility of legislative inconsistencies arising from reviewing and replacing related legislation at different times.

The Declaration aligns the sunsetting dates of the following instruments to 1 October 2023 (together, the ‘Shipping Reform (Tax Incentives) Instruments’):

(a)    the Shipping Reform (Tax Incentives) Regulation 2012 (Cth); and

(b)   the Shipping Reform (Tax Incentives) Act 2012 – Subsection 10(5) specification of kinds of vessels (Cth).

PROCESS BEFORE DECLARATION WAS MADE

Regulatory impact analysis

Sunset-altering declarations are machinery of government instruments, and are therefore not subject to the regulatory impact assessment requirements set out by the Office of Best Practice Regulation (OBPR). The OBPR reference for this standing exemption is ID 19486.

Consultation before making

Before the Declaration was issued, the Attorney‑General considered the general obligation to consult imposed by section 17 of the Legislation Act.

During a consultation period held by the Department of Infrastructure, Transport, Regional Development and Communications, stakeholders were invited to provide feedback on the proposal to align the sunsetting dates of the Shipping Reform (Tax Incentives) Instruments to 1 October 2023. The feedback received from stakeholders was positive.

Any replacement instruments will be subject to further consultation and parliamentary oversight, including oversight on whether adequate consultation occurred with persons likely to be affected by the replacement instruments. As such, the Declaration is consistent with the policy intent of the sunsetting regime.

Statutory preconditions relevant to the certificate

In order to align the sunsetting day of two or more instruments, the Attorney-General must be satisfied on written application from the relevant rule-maker that the statutory conditions in paragraphs 51A(1)(a) and (b) of the Legislation Act are met. The statutory conditions are that:

In terms of process, the Legislation Act requires:

(a)    the responsible rule-maker to apply to the Attorney-General

(b)    the Attorney-General to be satisfied of the statutory conditions, and

(c)    the Attorney-General to make a declaration, which is a legislative instrument and subject to disallowance.

The Hon Barnaby Joyce MP is the Minister for Infrastructure, Transport and Regional Development and is responsible for administering the Shipping Reform (Tax Incentives) Act 2012, under which the Shipping Reform (Tax Incentives) Instruments are made. Minister Joyce is therefore the relevant rule‑maker for the purposes of section 6 of the Legislation Act for the Shipping Reform (Tax Incentives) Instruments.

The Minister provided an application to the Attorney‑General seeking an alignment of the relevant sunsetting days. On consideration of this application, the Attorney‑General was satisfied that the criteria in paragraphs 51A(1)(a) and (b) of the Legislation Act were met.

Statement of Reasons for issuing of the Certificate

For the purposes of subsection 51A(4) of the Legislation Act, this section sets out the statement of reasons for the issue of the certificate.

As outlined above, the Declaration aligns the sunsetting dates for the Shipping Reform (Tax Incentives) Instruments to enable the Department of Infrastructure, Transport, Regional Development and Communications to conduct a thematic review of the instruments. The Shipping Reform (Tax Incentives) Instruments are made under the Shipping Reform (Tax Incentives) Act 2012 (the Act). The Act provides the framework for tax incentives that encourage investment in the Australian shipping industry and the development of sustainable employment and skills opportunities for Australian seafarers. The Act provides the mechanism for Australian companies to obtain a certificate for an eligible vessel as a necessary step towards gaining access to a range of tax incentives. The Shipping Reform (Tax Incentives) Instruments further define eligibility requirements.

As the Shipping Reform (Tax Incentives) Instruments are interrelated and share a common theme, subjecting them to a single review will allow the rule-maker to consider aligning language, drafting and policy changes consistently. Their review will be similar in scope and stakeholders will only need to be consulted once, thus reducing the burden on their time. Administratively it would be more efficient and effective to review the two instruments at the same time.

As the Regulation commenced in 2012 and the Instrument commenced in 2013, this will be the first review for the two instruments under the Act. A thematic review will broaden the scope of the review as it allows for stakeholders to be consulted on more than one legislative instrument under the Act at the same time. The review will consider if the Shipping Reform (Tax Incentives) Instruments are to be repealed, allowed to sunset or replaced (with or without changes).

The objective of the review is to undertake a single examination of two interrelated instruments to identify potential efficiencies and ensure a consistent approach. A thematic review will facilitate an efficient and effective review process and enable consistent implementation of review findings. As such, the Declaration is consistent with the policy intent of the sunsetting regime that legislative instruments should be kept up to date and only remain in force so long as they are needed.

More information

Further details on the provisions of the Declaration are provided in Attachment A.

The Shipping Reform (Tax Incentives) Instruments which will now sunset on 1 October 2023 as specified in the Declaration, are available on the Federal Register of Legislationhttp://www.comlaw.gov.au.

Further information may be requested from the Attorney-General’s Department about the operation of the Declaration, and from the Department of Infrastructure, Transport, Regional Development and Communications about the Shipping Reform (Tax Incentives) Instruments to which the Declaration applies.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The Legislation (Shipping Reform (Tax Incentives) Instruments) Sunset-altering Declaration 2022 (the Declaration) is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (the Human Rights Act).

Overview of the Declaration

The Declaration is made under subsection 51A(1) of the Legislation Act 2003 (the Legislation Act). Under that subsection, the Attorney-General can align the sunsetting days of two or more legislative instruments to 1 April or 1 October of a year that is up to five years later than the earliest sunsetting day. The instruments specified in the declaration will then be repealed on the day specified in the declaration instead of the previously scheduled sunsetting day. The instruments specified in the Declaration are (together, the Shipping Reform (Tax Incentives) Instruments):

(a)    the Shipping Reform (Tax Incentives) Regulation 2012 (the Regulation); and

(b)   the Shipping Reform (Tax Incentives) Act 2012 – Subsection 10(5) specification of kinds of vessels (the Instrument).

The Declaration aligns the sunsetting dates of the Shipping Reform (Tax Incentives) Instruments to 1 October 2023. The instruments are due to sunset on 1 October 2022 and 1 October 2023 respectively. The objective of issuing the Declaration is to facilitate the undertaking of a single thematic review of the Shipping Reform (Tax Incentives) Instruments and the implementation of its findings.

Human Rights Implications

The Regulation engages the right to privacy under Article 17 of the International Convention on Civil and Political Rights. Personal information is collected in order to grant companies notices and certificates for eligible vessels under the Shipping Reform (Tax Incentives) Act 2012, triggering legal responsibilities under the Privacy Act 1988. The explanatory statement for the Regulation concludes that it is compatible with human rights as the extent of any limitation on human rights is reasonable and proportionate to the information sought and benefits provided to applicants.

The Instrument does not engage any applicable rights or freedoms as it is of a minor or machinery nature. As a result, it raises no human rights issues.

The rights engaged under the Shipping Reform (Tax Incentives) Instruments are not substantially changed or affected by the issuing of the Declaration. The postponement of the sunsetting date of the Regulation does not affect its operation, and therefore does not change the effect of the rights already engaged. Further, the effect of the issuing of the Declaration under section 51A of the Legislation Act ensures appropriate safeguards for regular review are retained by limiting the extended operation of the Regulation to no longer than 12 months.

Conclusion

The Declaration is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights Act, as it does not raise any human rights issues.

ATTACHMENT A

NOTES ON THE DECLARATION         

Section 1 Name

This section provides for the declaration to be named the Legislation (Shipping Reform (Tax Incentives) Instruments) Sunset-altering Declaration 2022. The declaration may be cited by that name.

Section 2  Commencement

This section provides for the declaration to commence on the day after it is registered.

Section 3 Authority

This section provides that the declaration is made under subsection 51A(1) of the Legislation Act 2003.

Section 4 Aligning of sunsetting

This section provides that the following instruments are repealed by section 51A of the Legislation Act 2003 on 1 October 2023:

• the Shipping Reform (Tax Incentives) Regulation 2012; and
• the Shipping Reform (Tax Incentives) Act 2012 – Subsection 10(5) specification of kinds of vessels.

1 October 2023 is the aligned sunsetting day for those instruments, which would otherwise have sunset on 1 October 2022 and 1 October 2023 respectively.

Section 5 Repeal of this instrument

This section provides that the certificate is repealed at the start of 2 October 2023.