EXPLANATORY STATEMENT
Issued by the authority of the Minister for Infrastructure and Regional Development
Fuel Tax Act 2006
Minister’s Road User Charge Determination 2016 (No.1)
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 part 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.
Division 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(7)(b) of the Act provides that the Minister for Infrastructure and Regional Development (the Transport Minister) may determine the amount of the Road User Charge.
Subsection 43-10(9)(a)(i) and (ii) of the Act require that the Transport Minister must ensure that any proposed increase in the rate of the Road User Charge (and any data relied upon to determine an increase) be made publicly available at least 60 days prior to the making of a legislative instrument by the Transport Minister.
In accordance with subsections 43-10(9)(a) and (b) of the Act, the Transport Minister wrote to the National Transport Commission (NTC) on 7 January 2015 requesting they calculate the rate of the Road User Charge that was needed to ensure full cost recovery and no more. In addition, the Transport Minister requested that the NTC publish the data relied upon to determine the annual adjustment factor and undertake a public consultation process.
The NTC undertook a public consultation process from 16 February 2015 to 17 April 2015, publishing a report showing the calculations underpinning the proposed 0.6 per cent increase in the Road User Charge to 26.3 cents per litre. During the 60 day consultation process, the NTC received multiple submissions from key industry stakeholders.
Subsequently, on 6 November 2015, Transport Ministers approved a reduced Road User Charge of 25.9 cents per litre to apply from 1 July 2016, rather than the proposed increase by NTC. This was agreed as part of a freeze revenues pathway to hold heavy vehicle charges revenue constant at 2015-16 levels for the time being while also implementing the new structure of heavy vehicle charges from the 2014 Heavy Vehicle Charges Determination RIS.
In addition, the then Treasurer made changes to the Fuel Tax Act 2006 in 2015 so that the Road User Charge is specified to three decimal places ($0.259 per litre) as opposed to four decimal places ($0.2592 per litre).
The new Road User Charge will ensure ongoing cost recovery of the heavy vehicles’ share of government road construction and maintenance expenditure.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Subsection 43-10(7)(b) 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
Minister’s Road User Charge Determination 2016 (No. 1)
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(7)(b) of the Fuel Tax Act 2006 provides that the Minister for Infrastructure and Regional Development (the Transport Minister) may determine the amount of the Road User Charge.
In accordance with section 43-10(7)(b) of the Fuel Tax Act 2006, this Disallowable Instrument determines the rate 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. Charges are based on heavy vehicle-related road expenditure by all jurisdictions over the previous seven years.
The Charges are reviewed on a regular basis through a Heavy Vehicle Charges Determination Regulatory Impact Statement process by the National Transport Commission, the most recent being undertaken in 2014.
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