EXPLANATORY STATEMENT
Approved by the Australian Communications and Media Authority
Radiocommunications (Receiver Licence Tax) Act 1983
Radiocommunications (Receiver Licence Tax) Amendment Determination 2019 (No.1)
Authority
The Australian Communications and Media Authority (the ACMA) has made the Radiocommunications (Receiver Licence Tax) Amendment Determination 2019 (No. 1) (the Amendment Determination) under subsection 7(1) of the Radiocommunications (Receiver Licence Tax) Act 1983 (the Tax Act) and subsection 33(3) of the Acts Interpretation Act 1901 (the AIA). Subsection 7(1) of the Tax Act provides that the ACMA may determine the amount of tax in respect of:
- the issue of a receiver licence;
- the anniversary of a receiver licence coming into force; and
- the holding of a receiver licence.
Subsection 33(3) of the AIA provides that when an Act confers a power to make an instrument, that power shall, unless the contrary intention appears, be construed as including a power exercisable in a like manner and subject to like conditions, to amend that instrument.
Purpose and operation of the instrument
The Amendment Determination amends the Radiocommunications (Receiver Licence Tax) Determination 2015 (the Tax Determination) which sets the taxes for receiver licences. Receiver licences are apparatus licences. The tax levied on apparatus licences for receivers allows the ACMA to create economic incentives for efficient use of the spectrum. It also encourages licensees to use the minimum amount of bandwidth for their needs, to move to less congested bands, and to surrender licences that are no longer needed.
The ACMA generally seeks to ensure efficient use of spectrum by allocating frequencies to licensees with the greatest willingness to pay. If a tax is too low, licensees with low-value uses can viably occupy frequencies, excluding more economically efficient uses.
The Tax Determination sets out the different amounts of receiver licence tax that the ACMA has determined is payable by licensees of particular apparatus licences for receivers. The Amendment Determination increases all of the taxes for radiocommunications receiver licences by 2.1 percent based on the increase in the consumer price index (CPI) over the year to 30 June 2018[1]. In real terms there is no effect on businesses, as the nominal dollar increases merely preserve the value of the licence taxes (and therefore the incentives toward efficient use of spectrum) against erosion by inflation. The only exception to CPI based escalation is that the instrument continues the freeze, in dollar amounts, of taxes levied on fixed receive licences below 960 MHz in remote density areas at their 2008 levels.[2]
A provision-by-provision description of the Amendment Determination is set out in the notes at Attachment A.
The instrument is a disallowable legislative instrument for the purposes of the Legislation Act 2003 (the LA).
Documents incorporated by reference
The Amendment Determination does not incorporate any documents by reference.
Consultation
Before the instrument was made, the ACMA was satisfied that consultation was undertaken to the extent appropriate and reasonably practicable, in accordance with section 17 of the LA.
The consultation period for stakeholders was from 5 November 2018 to 3 December 2018 to allow comment on the proposal to amend the Tax Determination to increase taxes by the CPI of 2.1 percent. The proposed changes were published on the ACMA website www.acma.gov.au. The ACMA received three submissions. These were published on the ACMA website. The submissions did not support the imposition of the CPI adjustment with the majority suggesting the ACMA defer the increase until it finalises its Spectrum Pricing Review[3]. The submissions were taken into account by the ACMA in making the Amendment Determination however the ACMA did not consider it necessary to defer the annual CPI adjustment.
As noted above the application of the growth in the CPI means that in real terms there is no effect on businesses, as the nominal dollar increases merely preserve the value of the licence taxes (and therefore the incentives toward efficient use of spectrum) against erosion by inflation. For this reason the ACMA did not consider it necessary to defer the annual CPI increases as requested by the submitters.
Regulatory impact assessment
The Office of Best Practice Regulation (OBPR) has considered the routine annual escalation of licence tax rates by CPI and formed the opinion that no regulatory impact analysis is required. The OBPR reference number is 2011/12297.
Statement of compatibility with human rights
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires a rule maker in relation to a legislative instrument to which section 42 (disallowance) of the LA applies, to cause a statement of compatibility with human rights to be prepared in respect of that legislative instrument. This statement has been prepared in accordance with that requirement.
Overview of the instrument
The Amendment Determination is made under subsection 7(1) of the Tax Act and amends the Tax Determination to increase the taxes by the rate of growth in the CPI.
Human rights implications
The ACMA has assessed whether the Amendment Determination is compatible with human rights, being the rights and freedoms recognised or declared by the international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 as they apply to Australia.
Having considered the likely impact of the Amendment Determination and the nature of the applicable rights and freedoms, the ACMA has formed the view that the instrument does not engage any of those rights or freedoms.
Conclusion
The Amendment Determination is compatible with human rights and freedoms as it does not raise any human rights issues.
Attachment A
Notes to the Radiocommunications (Receiver Licence Tax) Amendment Determination 2019 (No.1)
Section 1 Name
This section provides for the instrument to be cited as the Radiocommunications (Receiver Licence Tax) Amendment Determination 2019 (No. 1).
Section 2 Commencement
This section provides that the Amendment Determination commences at the start of the day after it is registered on the Federal Register of Legislation which can be accessed at www.legislation.gov.au.
Section 3 Authority
Section 3 provides that the Amendment Determination is made under subsection 7(1) of the Tax Act.
Section 4 Amendments
Section 4 provides that Schedule 1 of the Amendment Determination amends the Tax Determination.
Schedule 1 Amendments
Item 1
Item 1 amends the definition of minimum annual amount in section 3 of the Tax Determination to increase the minimum tax amount from $40.32 to $41.17 (2.1 percent), to reflect changes in the CPI.
Item 2
Item 2 substitutes Part 3 of the Tax Determination to introduce new transitional arrangements relating to the annual increases in tax for inflation. New section 7 of the Tax Determination sets out the relevant definitions and new section 8 provides the transitional arrangements for the implementation of receiver licence tax increases made by the Amendment Determination.
Although the Amendment Determination commences on the day after registration, the increase in taxes by the CPI does not take effect until 5 April 2019. In instances where the tax is payable after the date the Amendment Determination commences but before 5 April 2019, the amount of tax will continue to be based on the Tax Determination as in force immediately before the commencement of the Amendment Determination. The purpose of these transitional arrangements is to allow the amount of tax shown on renewal notices and instalment notices sent out prior to the commencement of the Amendment Determination, but payable after the commencement of the Amendment Determination, to continue to be valid.
Item 3
Item 3 substitutes a new table 202 (and accompanying note) in Part 2 of Schedule 2 of the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for defence receive and major coast receive licences. The amount of tax varies with frequency range and area density of the spectrum access. All amounts have been raised by the adjustment of 2.1 percent in line with the increase in the CPI.
Item 4
Item 4 substitutes a new table 302 (and accompanying note) in Part 3 of Schedule 2 of the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for fixed receive licences. All amounts have been raised by the adjustment of 2.1 percent in line with the increase in the CPI, except for frequency bands below 960 MHz in remote density areas, where the amount of tax remains set at the 2008 level.
Item 5
Item 5 substitutes a new table 402 (and accompanying note) in Part 4 of Schedule 2 of the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for earth receive and space receive licences specified in that Part. All amounts have been raised by the adjustment of 2.1 percent in line with the increase in the CPI.
[1] Australian Bureau of Statistics, Catalogue 6401.0, Consumer Price Index, June Quarter 2018
[2] In 2003, the Australian Communications Authority (ACA) introduced a variant to the tax formula for apparatus licence taxes for fixed services in bands below 960 MHz. The decision was to increase these taxes in addition to CPI for five years until parity was reached with taxes for land mobile services. In November 2008, in response to stakeholder requests, the ACMA decided to freeze these specific taxes, pending a full review.
[3] Information about the Spectrum Pricing Review can be found at: https://www.communications.gov.au/documents/spectrum-pricing-review