Oil Companies (Stock Loss Reimbursement) Act 1986
No. 18 of 1986
An Act to reimburse oil companies for losses incurred as a result of those companies having purchased indigenous crude oil at import parity prices during February 1986
[Assented to 13 May 1986]
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
Short title
1. This Act may be cited as the Oil Companies (Stock Loss Reimbursement) Act 1986.
Commencement
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Payments to oil companies
3. Each company named in column 1 of the following table is entitled to receive a payment of the amount specified in column 2 of that table opposite to the name of that company:
Column 1 | Column 2 |
| $ |
Ampol Refineries Limited............................ | 14,242,866 |
Australian Oil Refining Pty Limited...................... | 21,857,369 |
BP Australia Limited............................... | 26,525,933 |
Esso Australia Ltd................................. | 10,223,407 |
Mobil Oil Australia Limited........................... | 18,374,670 |
The Shell Company of Australia Limited.................. | 33,603,676 |
Appropriation
4. Payments under section 3 shall be made out of the Consolidated Revenue Fund, which is appropriated accordingly.
Application of Income Tax Assessment Act
5. (1) Where a payment is made to a company under section 3—
(a) the payment shall be deemed not to be assessable income or exempt income for the purposes of the Income Tax Assessment Act 1936; and
(b) the amount that would, apart from this section, be allowable under that Act as a deduction from the assessable income of the company of the year of income of the company in which the payment is made in respect of losses or outgoings incurred in the purchase by the company of crude oil shall be reduced by an amount equal to the amount of the payment.
(2) In sub-section (1), “year of income” has the same meaning as in section 6 of the Income Tax Assessment Act 1936.
[Minister’s second reading speech made in—
House of Representatives on 17 April 1986
Senate on 2 May 1986]
Overview
The Oil Companies (Stock Loss Reimbursement) Act 1986 was enacted by the Parliament of Australia and received Royal Assent on 13 May 1986. This legislation was introduced to address the financial losses incurred by certain oil companies that had purchased indigenous crude oil at import parity prices in February 1986. The policy objective of the Act was to provide financial reimbursement to these companies to alleviate the economic burden resulting from the purchase of oil at prices that did not reflect the prevailing market conditions. Payments to eligible oil companies were to be made from the Consolidated Revenue Fund, with specific provisions to ensure that these payments were neither assessable nor exempt income for the purposes of the Income Tax Assessment Act 1936, and that any related tax deductions were adjusted accordingly.
Scope and Application
The Oil Companies (Stock Loss Reimbursement) Act 1986 applies to six specific oil companies that had purchased indigenous crude oil at import parity prices in February 1986. These companies, identified in the Act, are entitled to receive reimbursement payments for losses incurred due to this purchase. The geographic reach of the Act is federal, enacted by the Commonwealth of Australia, and applies to the named companies regardless of their state or territory location within Australia. The Act appropriates funds from the Consolidated Revenue Fund for the specified payments and provides that these payments are neither assessable income nor exempt income under the Income Tax Assessment Act 1936. Additionally, the Act reduces allowable deductions for the companies by the amount of the reimbursement payments. The Act does not extend its application through subordinate instruments, and no exclusions or exemptions are stated beyond the specific companies listed.
Key Provisions
The Oil Companies (Stock Loss Reimbursement) Act 1986 (section 3) designates specific oil companies that are entitled to receive payments due to losses they incurred by purchasing indigenous crude oil at import parity prices in February 1986. The payments are detailed in a table within the Act, specifying the exact amount each named company is to receive. The Act (section 4) ensures that these payments are made from the Consolidated Revenue Fund, with the fund being appropriated accordingly to cover these reimbursements.
The Act places obligations on the government to process and disburse the specified payments to the listed oil companies. Additionally, section 5 of the Act mandates that these payments are not to be considered as assessable income or exempt income for the purposes of the Income Tax Assessment Act 1936. It also stipulates that any allowable deductions a company might claim for losses or outgoings related to the purchase of crude oil must be reduced by the amount of the reimbursement received under this Act.
In terms of penalties and consequences, the Act does not explicitly outline criminal or civil penalties for non-compliance with its provisions. However, the failure to adhere to the requirements set forth, such as not making the specified payments or incorrectly applying the tax provisions, could potentially lead to legal scrutiny or challenges by the affected companies. The Act’s focus seems to be on ensuring that the reimbursements are made correctly and that the tax implications are appropriately managed, rather than imposing punitive measures for breaches.