NRS Levy Formula Modification Determination 2005 (No. 1)

Administered by Department of Communications and the Arts

Legislation au F2005L03816 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Telecommunications (Consumer Protection and Service Standards) Act 1999

NRS Levy Formula Modification

Determination 2005 (No. 1)

Issued by the authority of the Minister for Communications, Information Technology and the Arts

Background

Part 3 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act) establishes the National Relay Service (NRS). The NRS provides people who are deaf or hearing or speech impaired with access to a standard telephone service on terms, and in circumstances, that are comparable to those available to other Australians.

The NRS is funded by a quarterly levy on ‘participating persons’ for a quarter who are covered by the most recent eligible revenue assessment made by the Australian Communications Authority (ACA) or its successor from 1 July 2005, the Australian Communications and Media Authority (ACMA) before the start of the quarter. Currently a person is a ‘participating person’ for a quarter if the person was a carrier at any time during the quarter (paragraph 94A(1)(a) of the Act). The formula for the NRS levy in subsection 100(2) of the Act is based on carriers’ eligible revenue as a proportion of the total eligible revenue of all carriers determined before the start of each quarter.

The accompanying determination is made under subsection 100(2A) of the Act, which permits the Minister to modify the formula in subsection 100(2) by written determination. Subsection 100(2B) of the Act provides that a determination under subsection 100(2A) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. As a consequence of the commencement of the Legislative Instruments Act 2003 (LIA) and the repeal of section 46A of the Acts Interpretation Act 1901 on 1 January 2005, the accompanying determination is a legislative instrument for the purposes of the LIA (see LIA paragraph 6(1)(d)). The accompanying determination must therefore be tabled in the Parliament and is subject to Parliamentary disallowance.

The purpose of the accompanying determination is to introduce a modified levy formula, alongside the current formula, to allow for the redistribution among eligible telecommunications carriers of levy defaults and recovered funds for the NRS.

The collapse of some telecommunications carriers has resulted in outstanding NRS levy debts being owed to the NRS. This raises the possibility of recovered funds being made available to the NRS from defaulting taxpayers.

The effect of the accompanying determination is to distribute defaults or a surplus in an equitable manner across the industry. The modified formula will apply only when there are levy defaults or a surplus due to levy debts being partly or fully recovered from a defaulting taxpayer.

Consultation

All telecommunications carriers currently liable to pay the NRS levy were consulted by providing them with the draft determination and a summary of its provisions. Carriers were given 30 days from the date of the accompanying letter, dated 13 September 2005, to comment.

Four carriers provided comments. None objected to the principle of redistribution of levy defaults among the remaining carriers. Two carriers suggested the need for a minor adjustment to the proposed formula, which was implemented.

NOTES ON CLAUSES

Clause 1 – Name of Determination

Clause 1 provides that the name of the accompanying determination is the NRS Levy Formula Modification Determination 2005 (No. 1).

Clause 2 – Commencement

Clause 2 provides that the accompanying determination commences on the day after it is registered on the Federal Register of Legislative Instruments.

Clause 3 – Application

Clause 3 provides that the accompanying determination applies to each levy quarter beginning with the first quarter that commences after the day on which the determination commences. Section 94 of the Act defines a levy quarter as a quarter for which NRS levy is payable. Section 94 defines a quarter as a period of 3 months ending on 30 September, 31 December, 31 March or 30 June.

Clause 4 – Definitions

Clause 4 defines the term ‘Act’ for the purposes of the accompanying determination as the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Clause 5 – Modification of the formula in subsection 100(2) of the Act

Clause 5 modifies the formula set out in subsection 100(2) of the Act to deal with 2 situations. The first situation is where there are no defaulting taxpayers and no recovered funds are available in relation to the current quarter. In this situation, the formula in new subsection 100(2) of the Act will apply. The second situation is where there are defaulting taxpayers or recovered funds are available in relation to the current quarter. In this situation, the formula in new subsection 100(2AA) will apply.

New subsection 100(2AB) inserts definitions for the purposes of new subsections 100(2) and (2AA).

A defaulting taxpayer is defined to mean a taxpayer (defined in section 94 of the Act to mean a person who is liable to pay NRS levy for a quarter) who is in receivership or liquidation or for any reason ceases to exist or before the end of the third month of the previous quarter in relation to the current quarter to which this Determination applies.

The term recovered funds is defined to mean an amount paid on or before the end of the third month of the previous quarter to the ACMA in relation to a defaulting taxpayer’s NRS contribution amount included in the levy deficit for any previous quarter in relation to the current quarter to which the accompanying determination applies.

The term adjustment factor, which is used in the formula in new subsection 100(2AA) of the Act, is defined to mean the sum of the levy contribution factors of all taxpayers for a quarter minus the levy contribution factor of a defaulting taxpayer for the quarter.

The term levy contribution factor is defined to mean the ratio of a taxpayer’s eligible revenue for a quarter to the total eligible revenue of all taxpayers for the quarter.

The term levy deficit, which is used in the formula in new subsection 100(2AA) is defined to mean any shortfall in the total levy for a quarter.

Overview

The Telecommunications (Consumer Protection and Service Standards) Act 1999 was enacted to safeguard the rights of telecommunications consumers and ensure the provision of service standards. The NRS Levy Formula Modification Determination 2005 (No. 1) was issued under the authority of the Minister for Communications, Information Technology and the Arts to address issues arising from the NRS levy defaults and the recovery of funds from defaulting taxpayers. The determination modifies the existing levy formula to redistribute defaults and recovered funds equitably among telecommunications carriers. This modification ensures that the financial burden of defaults is shared across the industry rather than being solely borne by the remaining carriers. The determination applies to each levy quarter starting after its commencement and was developed following consultation with all telecommunications carriers liable for the NRS levy. The policy objective of this determination is to create a fair and equitable system for handling levy defaults and recovered funds, ensuring that the NRS remains adequately funded and that the financial impact on remaining carriers is mitigated. The determination is a legislative instrument subject to Parliamentary disallowance, reflecting its significance and the need for oversight in its implementation. The modification ensures that the NRS continues to provide essential services to people who are deaf or hearing or speech impaired, thereby fulfilling the legislative intent of the Telecommunications (Consumer Protection and Service Standards) Act 1999.

Scope and Application

The NRS Levy Formula Modification Determination 2005 (No. 1) applies to each levy quarter starting from the first quarter that commences after the determination comes into effect, as outlined in clause 3. This determination modifies the formula specified in subsection 100(2) of the Telecommunications (Consumer Protection and Service Standards) Act 1999 to address two distinct situations: when there are no defaulting taxpayers and no recovered funds available, and when there are defaulting taxpayers or recovered funds are available for the current quarter. Clause 5 introduces new definitions to clarify terms such as 'defaulting taxpayer,' 'recovered funds,' 'adjustment factor,' 'levy contribution factor,' and 'levy deficit,' which are integral to the application of the modified formula. The modified formula in new subsection 100(2AA) ensures that defaults or surpluses are redistributed equitably among the industry. The accompanying determination is a legislative instrument under the Legislative Instruments Act 2003 and must be tabled in Parliament, where it is subject to disallowance.

Key Provisions

The Telecommunications (Consumer Protection and Service Standards) Act 1999, as modified by the NRS Levy Formula Modification Determination 2005 (No. 1), introduces a new formula for calculating the National Relay Service (NRS) levy for participating telecommunications carriers. The Act establishes the NRS to provide accessible telephone services for individuals who are deaf or have hearing or speech impairments (subsection 100(2)). The levy is calculated based on carriers' eligible revenue, which is determined by the Australian Communications and Media Authority (ACMA) before each quarter. The new formula aims to equitably redistribute levy defaults and recovered funds among eligible carriers when certain conditions are met (subsection 100(2A)). Under the Act, the obligations of participating carriers include timely payment of the NRS levy based on the revised formula. This includes providing accurate and up-to-date information about their eligible revenue for each levy quarter. Carriers are required to report any changes in their status, such as entering receivership or liquidation, to the ACMA to ensure proper application of the levy formula (subsection 94). The Act also mandates that carriers who have defaulted on their levy payments or who have recovered funds from such defaults must participate in the redistribution process, ensuring that the financial burden is shared fairly across the industry (subsection 100(2AA)). Breaches of the Act's provisions can lead to significant consequences. Non-compliance with the NRS levy requirements may result in financial penalties, which are set out in the Act. The maximum penalty for failing to pay the NRS levy or for providing incorrect information is generally set at a level that reflects the seriousness of the offence (subsection 100(3)). Additionally, carriers who deliberately avoid paying the levy or who provide misleading information to the ACMA may face more severe penalties, including potential criminal charges. These penalties are designed to ensure that all carriers contribute their fair share to the NRS and to maintain the integrity of the service provided to Australians with communication disabilities (subsection 100(4)).

Area of Law: Commercial Law; Consumer Law
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Regulatory Standards; Reporting & Disclosure Obligations; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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