EXPLANATORY STATEMENT
STATUTORY RULE 1986 No. 129 ISSUED BY THE
AUTHORITY OF THE MINISTER FOR COMMUNICATIONS
Section 9 of the Radiocommunications (Transmitter Licence Tax) Act 1983 (‘the Act’) provides that the Governor-General may make regulations for the purpose of section 7 of the Act.
Section 6 of the Act provides that tax is imposed on the grant of a transmitter licence. Section 7 provides, amongst other things, that the amount of tax in respect of the grant of a transmitter licence is such amount as is ascertained in accordance with the regulations.
Transmitter licences are currently granted and taxed on two bases. “Network licensing” involves the grant of one licence to cover all of the transmitters operated by a person whereas “item-by-item licensing” involves the grant or a separate licence for each transmitter operated by a person. Network licences attract tax at the rate of $4,150,000 per year. Under item-by-item licensing the rate of tax applicable to each licence depends upon the class of the licence.
The definition of “network” in sub-regulation 2(1) of the Radiocommunications (licensing and General) Regulations, which is adopted by sub-regulation 2(1) of the Radiocommunications (Transmitter Licence Tax) Regulations (‘the Regulations’), means that in practice network licences are issuable only to the Australian Telcommunications Commission (‘Telecom’). The prime object of the regulation is to put an end to the network licensing system and hence to place the licensing of the Telecom’s transmitters on the same footing as the licensing of transmitters operated by other persons.
The second object of the regulation is to impose a ceiling of $3,885,831 on the tax to be paid by Telecom in respect of its next licence renewals. Telecom will renew its licences in June 1986 for a period of approximately ten months. The figure of $3,885,831 represents the annual fee for a network licence reduced to reflect the proportion of a year which will be covered by the licences granted to Telecom in June. The effect of the ceiling is therefore to phase in the new system of licensing Telecom’s transmitters by preventing any increase in the rate of tax payable by Telecom until May 1987. This step is necessary to ensure that the tax to be paid by Telecom in June does not exceed the amount the Commission has previously budgeted for on the basis of network licensing. Subsequent renewals of Telecom’s licences will be based on item-by-item licensing at normal rates.
The regulation omits the definition of “network” contained in sub-regulation 2(1) of the Regulations. It also omits the existing sub-regulation 3(2) which prescribes the annual rate of tax on the grant of a network licence and substitutes a new sub-regulation which provides the $3,885,831 tax ceiling for the grant of licences to be issued to Telecom in June 1986.