EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 161
Issued by the Authority of the Minister for Industry, Tourism and Resources
Petroleum (Submerged Lands) Fees Act 1994
Petroleum (Submerged Lands) Fees Amendment Regulations 2006 (No. 1)
Section 7 of the Petroleum (Submerged Lands) Fees Act 1994 (the Fees Act) provides that the Governor‑General may make regulations, not inconsistent with the Act, prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Petroleum (Submerged Lands) Act 1967 (the Principal Act) involves a large number of decisions relating to the day-to-day administration of the Act, including the granting of exploration permits, retention leases, production, pipeline and infrastructure licences.
Section 4 of the Fees Act provides that the holders of these titles (permits, leases and licences) must pay a fee to the Commonwealth through the Designated Authority for each year of the term of the title. The fee is specified in, or calculated in accordance with, the Petroleum (Submerged Lands) Fees Regulations 1994.
The Regulations remove the GST component of 10% from the prescribed fees to account for the fact that they are now exempt from GST due to their listing on the current Determination of the Treasurer made under subsection 81-5(2) of the A New Tax System (Goods and Services Tax) Act 1999.
In keeping with the Offshore Constitutional Settlement and section 129 of the Principal Act, the Commonwealth will continue to pay all fees received for the day-to-day administration of the regime to State and Northern Territory Authorities to offset their costs.
Details of the Regulations are set out in the Attachment.
The Regulations commenced on 1 July 2006.
Authority: Section 7 of the Petroleum (Submerged Lands) Fees Act 1994
ATTACHMENT
Regulation 1- Name of Regulations
This Regulation provides the title of the Regulations.
Regulation 2 - Commencement
This Regulation provides for the commencement of the Regulations on 1 July 2006.
Regulation 3 - Amendment of Petroleum (Submerged Lands) Fees Regulations 1994
This Regulation provides that the amendments to the Petroleum (Submerged Lands) Fees Regulations 1994 are as set out in Schedule 1.
SCHEDULE 1 AMENDMENT
Item [1] – Regulation 3
This item substitutes subregulation 3(2) specifying the fee does not include GST if it is specified in a current determination of the Treasurer 81-5(2) of the A New Tax System (Goods and Services Tax) Act 1999. If it is not specified, then it does include GST.
Items [2] & [3] – Paragraphs 4(a) and (b)
Paragraphs 4(a) and (b) reduced the prescribed minimum annual fee for an exploration permit from $1,100 to $1,000 per permit or from $55 to $50 for each block to which the permit relates. The amount payable will be whichever is the greater.
Item [4] – Regulation 5
Regulation 5 reduced the prescribed annual fee for a retention lease from $6,600 to $6,000 for each block to which the lease relates.
Item [5] – Regulation 6
Regulation 6 reduced the prescribed annual fee for a production licence from $19,800 to $18,000 for each block to which the licence relates.
Item [6] – Regulation 6A
Regulation 6A reduced the prescribed annual fee for an infrastructure licence from $13,200 to $12,000.
Item [7] – Regulation 7
Regulation 7 reduced the prescribed annual fee for a pipeline licence from $88 to $80 per kilometre, or part kilometre, of the length of the pipeline.
Overview
The Petroleum (Submerged Lands) Fees Amendment Regulations 2006 (No. 1) were enacted under the authority of the Minister for Industry, Tourism and Resources, to amend the Petroleum (Submerged Lands) Fees Regulations 1994. These amendments were necessitated by the removal of the Goods and Services Tax (GST) component from the fees associated with petroleum exploration and production activities on submerged lands, as per the A New Tax System (Goods and Services Tax) Act 1999. In accordance with the Offshore Constitutional Settlement and section 129 of the Petroleum (Submerged Lands) Act 1967, the Commonwealth government has committed to reimbursing state and territory authorities for the costs incurred in the administration of these titles. The amendments to the fees reflect this change, ensuring that the fees are now GST-exempt, and also include minor reductions to the prescribed fees for various petroleum-related titles such as exploration permits, retention leases, production, pipeline, and infrastructure licences. These Regulations commenced on 1 July 2006.
Scope and Application
The Petroleum (Submerged Lands) Fees Amendment Regulations 2006 (No. 1) pertain to the Petroleum (Submerged Lands) Fees Act 1994, which applies to holders of petroleum titles such as exploration permits, retention leases, production, pipeline, and infrastructure licences within Australia’s submerged lands. These titles are issued under the Petroleum (Submerged Lands) Act 1967. The fees associated with these titles are regulated to ensure compliance with the Offshore Constitutional Settlement, where the Commonwealth distributes the collected fees to state and territory authorities to offset their administrative costs. The Regulations came into effect on 1 July 2006 and adjust the prescribed fees to reflect the removal of the Goods and Services Tax (GST) component, which now exempts these fees from GST. This amendment reduces the fees for various petroleum titles, including exploration permits, retention leases, production licences, infrastructure licences, and pipeline licences, aligning with the current determination of the Treasurer under the A New Tax System (Goods and Services Tax) Act 1999. The Regulations do not introduce new entities or industries but modify the financial obligations for existing title holders within the scope of the Petroleum (Submerged Lands) regime.
Key Provisions
The Petroleum (Submerged Lands) Fees Amendment Regulations 2006 (No. 1) amend the Petroleum (Submerged Lands) Fees Regulations 1994. Under Section 7 of the Petroleum (Submerged Lands) Fees Act 1994, the Governor-General can make regulations that are not inconsistent with the Act, and necessary or convenient to carry it out. These Regulations remove the GST component of 10% from the prescribed fees because they are now exempt from GST due to their listing on the current Determination of the Treasurer made under subsection 81-5(2) of the A New Tax System (Goods and Services Tax) Act 1999. The Regulations also adjust the fees for various petroleum titles, such as exploration permits, retention leases, production, pipeline, and infrastructure licences.
The Regulations impose obligations on the holders of petroleum titles to pay an annual fee to the Commonwealth through the Designated Authority. The fee is specified in, or calculated in accordance with, the Petroleum (Submerged Lands) Fees Regulations 1994. The fees for each title are adjusted according to the provisions of these Regulations. The Commonwealth is also required to pay all fees received for the day-to-day administration of the regime to State and Northern Territory Authorities to offset their costs, in line with the Offshore Constitutional Settlement and section 129 of the Principal Act.
Failure to comply with the requirements of the Petroleum (Submerged Lands) Fees Act 1994 and the amended Regulations may result in civil or criminal consequences. However, the Regulations themselves do not explicitly outline offences, penalties, or consequences for non-compliance. The main consequences would stem from non-compliance with the overarching Petroleum (Submerged Lands) Act 1967, which governs the granting and administration of the petroleum titles in question. Penalties for breaches of the Principal Act can include fines and imprisonment, depending on the severity of the offence. The specific penalties are determined according to the relevant sections of the Principal Act and any applicable regulations or legislation.