EXPLANATORY STATEMENT
Approved by the Australian Communications and Media Authority
Radiocommunications (Transmitter Licence) Tax Act 1983
Radiocommunications (Transmitter Licence Tax) Amendment Determination 2022 (No. 2)
Authority
The Australian Communications and Media Authority (the ACMA) has made the Radiocommunications (Transmitter Licence Tax) Amendment Determination 2022 (No. 2) (the Amendment Determination) under subsection 7(1) of the Radiocommunications (Transmitter 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 transmitter licence;
- the anniversary of a transmitter licence coming into force; and
- the holding of a transmitter licence.
Subsection 33(3) of the AIA relevantly 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 (Transmitter Licence Tax) Determination 2015 (the Tax Determination), which sets the taxes for transmitter licences. The annual tax levied on transmitter licences 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.
According to the Explanatory Memorandum for the Radiocommunications (Transmitter Licence Tax) Amendment Bill 1992, the amount of tax is determined with the use of a disallowable instrument because of a need for flexibility in setting the level of the taxes and to ensure that the ACMA itself can set the level which equitably recoups the costs of spectrum management across all apparatus licences which are issued under the Radiocommunications Act 1992.
That Explanatory Memorandum also stated that the use of disallowable instruments in the setting of the levels of licence taxes will ensure that there is flexibility to change levels in response to changes in demand for particular parts of the spectrum, and to introduce new tax amounts for new kinds of licences, while also ensuring that accountability to the Parliament remains, as the determinations are subject to Parliamentary disallowance.
The Tax Determination sets out the different amounts of transmitter licence tax that the ACMA has determined are payable by licensees of particular transmitter licences. The amount of tax for many of these licences is calculated by reference to rates specified in ‘weightings tables’, which apply different rates to licences depending on where they authorise the operation of radiocommunications transmitters, both geographically and in the radiofrequency spectrum. The Amendment Determination amends the Tax Determination to:
- simplify the weightings tables by consolidating the 30 MHz to 403 MHz frequency ranges into a single frequency range;
- add a new frequency range to the weightings tables for frequencies above 100 GHz, where licences will be subject to the minimum tax amount;
- adjust tax rates for transmitter licences used to provide high-power open narrowcasting (HPON) services, with different rates depending on the location of the radiocommunications transmitters and depending on whether the licence is used to provide FM or AM open narrowcasting radio services, or open narrowcasting television services;
- modify the assessment of tax relating to spectrum accesses for co-located earth stations;
- modify definitions relating to local and micro power spectrum accesses, which will affect when some licences may be subject to lower tax rates.
A provision-by-provision description of the Amendment Determination is set out in the notes at Attachment A.
The Amendment Determination is a disallowable legislative instrument for the purposes of the Legislation Act 2003 (the LA). The Tax Determination is subject to the sunsetting provisions of the LA.
Documents incorporated by reference
The Amendment Determination inserts transitional provisions into the Tax Determination that refer to the Tax Determination as in force at a particular time, namely, immediately before the commencement of the Amendment Determination, as permitted by section 14 of the LA. That version of the Tax Determination is available, free of charge, from the Federal Register of Legislation at www.legislation.gov.au.
The Amendment Determination amends the Tax Determination to refer to the following Acts and legislative instrument, as in force from time to time, as permitted by section 14 of the LA:
- the Broadcasting Services Act 1992;
- the Radiocommunications Act 1992;
- the Radiocommunications Licence Conditions (Broadcasting Licence) Determination 2015, or any instrument replacing that determination.
The Act and legislative instrument are available, free of charge, from the Federal Register of Legislation at www.legislation.gov.au.
The Amendment Determination amends the Tax Determination to refer to “1270.0.55.004 – Australian Statistical Geographic Standard (ASGS): Volume 4 – Significant Urban Areas, Urban Centres and Localities, Section of State, July 2016”, as existing on the day the Amendment Determination commenced, as permitted by section 14 of the LA. This document is published by the Australian Bureau of Statistics is available, free of charge, from its website at www.abs.gov.au.
Consultation
Before the Amendment Determination 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.
Stakeholders were given from 29 October 2021 to 10 December 2021 to comment on the proposal to amend the Tax Determination to introduce the proposed reforms described above. The proposed reforms were outlined in a consultation paper, ‘Response to the implementation of the Spectrum Pricing Review (part 2) – consultation 38/2021’, that was published on the ACMA website www.acma.gov.au.
The ACMA received 10 submissions in response to the consultation paper. All submissions received were supportive of the proposed reforms relevant to the Amendment Determination. The ACMA changed the Amendment Determination, based on some of the submissions received, to modify the assessment of tax relating to spectrum accesses for co-located earth stations, as some submitters considered the existing provisions were not achieving their intended purpose.
Regulatory impact assessment
The Office of Best Practice Regulation (OBPR) has considered the implementation of the second tranche of the Spectrum Pricing Review and recommended that a regulatory impact analysis be completed. Subsequently, in compliance with the requirements of a regulatory impact analysis, a Regulation Impact Statement was prepared for and accepted by OBPR. The OBPR reference number is OBPR21-01227.
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 amends the Tax Determination, which sets the amount of tax payable by transmitter licensees, imposed by the Tax Act. The annual tax levied on transmitter licences 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 amount of tax for many of these licences is calculated by reference to rates specified in ‘weightings tables’, which apply different rates to licences depending on where they authorise the operation of radiocommunications transmitters, both geographically and in the radiofrequency spectrum.
The Amendment Determination is made under subsection 7(1) of the Tax Act and amends the Tax Determination to:
- simplify the weightings tables by consolidating the 30 MHz to 403 MHz frequency ranges into a single frequency range;
- add a new frequency range to the weightings tables for frequencies above 100 GHz, where licences will be subject to the minimum tax amount;
- adjust tax rates for transmitter licences used to provide high-power open narrowcasting services, with different rates depending on the location of the radiocommunications transmitters and depending on whether the licence is used to provide FM or AM open narrowcasting radio services, or open narrowcasting television services;
- modify the assessment of tax relating to spectrum accesses for co-located earth stations;
- modify definitions relating to local and micro power spectrum accesses, which will affect when some licences may be subject to lower tax rates.
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 (Transmitter Licence Tax) Amendment Determination 2022 (No. 2)
Section 1 Name
This section provides for the Amendment Determination to be cited as the Radiocommunications (Transmitter Licence Tax) Amendment Determination 2022 (No. 2).
Section 2 Commencement
This section provides for the Amendment Determination to commence at the start of the day after the day it is registered on the Federal Register of Legislation.
The Federal Register of Legislation may be accessed free of charge 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 the Tax Determination is amended as set out in Schedule 1 to the Amendment Determination.
Schedule 1 Amendments
Item 1
Item 1 substitutes Part 3 of the Tax Determination to introduce new transitional arrangements relating to the changes made by the Amendment Determination. New section 3.1 of the Tax Determination sets out the relevant definitions. New section 3.2 provides the transitional arrangements so that the new taxes do not take effect in relation to taxes imposed before the implementation day (50 days after the commencement of the Amendment Determination). In instances where the tax is imposed after the commencement of the Amendment Determination, but before the implementation day, the amount of tax will continue to be based on the Tax Determination as in force immediately before the commencement of the Amendment Determination.
Item 2
Item 2 makes a consequential change to item 201(g) in Schedule 2 to the Tax Determination, in relation to the changes for HPON licences made by items 10 and 11 (see below).
Item 3
Item 3 substitutes table 202 of Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 2 of Schedule 2 (most assigned licences). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum amount ($41.37, rounded down to $41 if there is only one spectrum access under the licence).
Item 4
Item 4 substitutes table 206 in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 2A of Schedule 2 (scientific licences). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Item 5
Item 5 substitutes table 302 in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 3 of Schedule 2 (assigned licences in high demand frequency bands). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Item 6
Item 6 substitutes table 402 in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 4 of Schedule 2 (assigned fixed point to point licences). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Item 7
Item 7 substitutes table 502 in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 5 of Schedule 2 (assigned fixed point to multipoint licences). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Item 8
Item 8 substitutes table 602 in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 6 of Schedule 2 (fixed television outside broadcast station). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Item 9
Item 9 makes a change to table 702, item 1 in Schedule 2 to the Tax Determination, which is consequential to the change in item 10.
Items 10 and 11
These items replace items 801 and 802 (including the table), and amend subitem 803(2), in Schedule 2 to the Tax Determination. These changes have the effect of adjusting the tax rates for HPON licences.
The new tax table for HPON licences distinguishes between FM services, and AM services, and television services. The locations specified in the tax table have also been adjusted to reflect the top urban areas in Australia by population. Where an HPON licence authorises the operation of a radiocommunications transmitter somewhere not specified in the tax table, the HPON licence is subject to the minimum tax.
These items also exclude HPON TV licences that authorise the operation of a radiocommunications transmitter in Adelaide from the taxes in table 802; tax for these licences will continue to be assessed in accordance with Part 2 of Schedule 2.
Item 12
Item 12 substitutes table 802A in Schedule 2 to the Tax Determination, which sets out the amount of tax for each kHz of bandwidth for the licensing options specified in Part 8A of Schedule 2 (space system licences). The amount of tax varies with frequency range and area density of the spectrum access under the licence. Tax rates for licences that authorise operation of radiocommunications transmitters on frequencies between 30 MHz and 403 MHz have been set at the same rate, depending on the geographic area. Tax for licences that authorise operation of radiocommunications transmitters above 100 GHz has been set at the minimum.
Items 13 and 14
These items replace paragraph 804AA(1)(b) and subitem 804AA(2) in Schedule 2 to the Tax Determination. These items have the effect of adjusting the method by which the amount of tax is calculated for co-located and co-frequency earth stations authorised by a single earth licence.
Where a single earth licence authorises multiple co-located earth stations, and does so by reference to multiple spectrum accesses, the tax is assessed as if there is only one spectrum access under the licence (combined spectrum access), with the following characteristics:
- the combined spectrum access has the minimum bandwidth necessary to cover the bandwidths of all the spectrum accesses under the licence. For example, if there are two spectrum accesses under an earth licence, one from 520 MHz to 525 MHz, and one from 522.5 MHz to 527.5 MHz, then the bandwidth of the combined spectrum access is 7.5 MHz (the difference between 527.5 MHz and 520 MHz); and
- the combined spectrum access has the highest value density area of any of the spectrum accesses under the licence.
Items 15 and 16
These items replace part of the definition of ‘low power spectrum access’ in the Dictionary and provide an additional note accompanying the updated definition. These items seek to better reflect the intent of the initial proposal to introduce a ‘micro’ power discount in addition to the previously existing ‘low’ power discount. The two discounts cannot be combined. A low power discount applies where a licensee has effectively acknowledged that the ACMA will not coordinate other licences to protect radiocommunications from the licensee’s radiocommunications transmitter more than 2 kilometres from the transmitter.
Items 17 and 18
These items replace part of the definition of ‘micro power spectrum access’ in the Dictionary and provide an additional note accompanying the updated definition. These items seek to better reflect the intent of the initial proposal to introduce a ‘micro’ power discount in addition to the previously existing ‘low’ power discount. The two discounts cannot be combined. A micro power discount applies where a licensee has effectively acknowledged that the ACMA will not coordinate other licences to protect radiocommunications from the licensee’s radiocommunications transmitter more than 200 metres from the transmitter.