EXPLANATORY STATEMENT
Issued by the Australian Communications and Media Authority
Radiocommunications (Spectrum Licence Tax) Amendment Determination 2018 (No. 1)
Radiocommunications (Spectrum Licence Tax) Act 1997
Authority
The Australian Communications and Media Authority (the ACMA) has made the Radiocommunications (Spectrum Licence Tax) Amendment Determination 2018 (No. 1)
(the Amendment Determination) under subsection 7(1) of the Radiocommunications (Spectrum Licence Tax) Act 1997 (the Act).
Section 6 of the Act imposes tax on a spectrum licence:
- if a spectrum licence is in force on the initial holding date for the licence, tax is imposed on the initial holding date for the licence;
- if a spectrum licence is in force on a particular anniversary of the initial holding date for the licence, tax is imposed on that anniversary of the initial holding date for the licence.
Subsection 7(1) of the Act provides that the ACMA may determine how to ascertain the amount of spectrum licence tax payable by spectrum licensees.
Subsection 33(3) of the Acts Interpretation Act 1901 provides that where 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
Spectrum licence tax is an annual tax imposed under the Act on spectrum licence holders. The tax is payable on the “initial holding day” for each spectrum licence, as determined by the ACMA, and on each subsequent anniversary of that initial holding day. The Act provides that the amount of tax payable is ascertained in accordance with a determination made by the ACMA.
The ACMA has traditionally set the amount of tax payable by spectrum licensees in order to recover the indirect costs of spectrum management activities such as international coordination, domestic planning, interference investigation and policy development. The Radiocommunications (Spectrum Licence Tax) Determination 2014 (the Determination) provides for the ascertainment of spectrum licence tax for a particular licence by reference to a ‘base amount’, which is different for licences in different frequency bands, and by reference to populations of licence areas, based on Census data.
The “base amounts” are the component of the tax formula that are calculated by reference to the indirect costs of its spectrum management functions attributable to spectrum licensees. The method used to determine the base amounts first involves the calculation of the spectrum maintenance component (SMC) percentage. The SMC percentage is calculated by reference to the tax collected by the ACMA from other licensees under the Radiocommunications Act 1992. This tax (apparatus licence tax) is imposed by the Radiocommunications (Transmitter Licence Tax) Act 1997 and the Radiocommunications (Receiver Licence Tax) Act 1997. The ACMA sets the amount of apparatus licence tax under these Acts on the basis that it partly represents the “value” of the licences and partly recovers the ACMA’s indirect costs of spectrum management attributable to apparatus licensees. The SMC percentage represents the total indirect cost of spectrum management expressed as a percentage of total apparatus licence tax revenue (i.e., it separates out the indirect cost recovery component of apparatus licence tax revenue from the “value” component). The SMC percentage is 20.18 per cent, based on the ACMA’s indirect costs, and apparatus licence tax revenue, for the 2016-2017 financial year.
The Amendment Determination amends the Determination to set new base amounts for each of the frequency bands, which are based on the SMC percentage for the 2016-2017 financial year. The Amendment Determination also amends the determination to make reference to the 2016 Census instead of the 2011 Census.
The amount of spectrum licence tax paid is calculated as a share of that base amount on a per population per MHz basis.
The formula for calculating the tax is:
Area population (A) SL bandwidth (C)
___________________ X________________________X Base amount (E)
Australian population (B) Total specified spectrum (D)
where:
- is the population of the geographic area specified in a spectrum licence, as reported in the most recently available census;
- is the Australian population, as reported in the most recent available census;
- is the bandwidth of the frequencies specified in the spectrum licence;
- is the total bandwidth of the band in which the spectrum licence falls; and
- is the base amount (assessed as a share of the ACMA’s indirect cost for a particular band).
A provision-by-provision description of the instrument is set out in the notes at Attachment A.
The instrument is a legislative instrument for the purposes of the Legislation Act 2003 (the LA).
Documents incorporated by reference
The Amendment Determination amends the Determination to refer to data collected and published in relation to the 2016 Census conducted by the Australian Bureau of Statistics (ABS), as in existence at the date the Amendment Determination was made. Information and data published by the ABS in relation to the 2016 Census is freely available from the ABS website: www.abs.gov.au.
Consultation
The ACMA consulted with stakeholders (from 6 March 2018 to 17 April 2018) by releasing a consultation paper outlining the proposed amendments on its website. The ACMA received one submission from Commercial Radio Australia. The ACMA took into account the views expressed in the submission in making this Amendment Determination.
Regulatory Impact
The Office of Best Practice Regulation (OBPR) has considered the changes to the spectrum licence taxes effected by the Amendment Determination and formed the opinion that no regulatory impact analysis is required. The OBPR reference number is 23824.
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 Legislation Act 2003 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 Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Amendment Determination made under subsection 7(1) of the Act amends the Determination which specifies the tax applicable to certain spectrum licences. The ACMA has considered whether the Amendment Determination engages any applicable human rights or freedoms and has formed the view that it does not. The Amendment Determination is compatible with human rights as it does not raise any human rights issues.
Amendment Determination Details
Details of the Amendment Determination are provided in Attachment 1.
ATTACHMENT 1
DETAILS OF THE AMENDMENT DETERMINATION
Section 1 Name
Section 1 specifies the name of the Amendment Determination.
Section 2 Commencement
Section 2 provides that the Amendment Determination commences on the day after it is registered on the Federal Register of Legislation.
Section 3 Authority
Section 3 provides that the Amendment Determination is made under subsection 7(1) of the Radiocommunications (Spectrum Licence Tax) Act 1997.
Section 4 Amendments
Section 4 provides that Schedule 1 of the Amendment Determination amends the Determination.
Schedule 1 Amendments
Item [1]
Item [1] omits “subsections (2) and (3)” from subsection 5(1) of the Determination and substitutes “subsection (3)”.
Item [2]
Item [2] repeals subsection 5(2) of the Determination. When making the Determination in 2014, the ACMA determined that the spectrum licence taxes for the 2.3 GHz band were to be first imposed on 11 October 2015. The effect of items 1 and 2 is to remove these that merely historical reference.
Item [3]
Item [3] substitutes a new Table 1 and notes in Part 1 of Schedule 1. The effect of item 3 is to update the base amounts for each of the spectrum licensed bands. The base amounts are one of the factors used to calculate the spectrum licence tax.
Item [4]
Item [4] updates the definition of “area population” in Part 3 of Schedule 1 so that it refers to the 2016 Census rather than the 2011 Census.
Item [5]
Item [5] updates the definition of “Australian population” in Part 3 of Schedule 1 so that it refers to the 2016 Census rather than the 2011 Census.