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.
Overview
The Statutory Rule 1986 No. 129, issued under the authority of the Minister for Communications, amends the Radiocommunications (Transmitter Licence Tax) Regulations to address specific issues concerning the licensing and taxation of transmitter licences in Australia. Enacted in 1986, this regulation primarily aims to discontinue the network licensing system, which previously allowed the Australian Telecommunications Commission (Telecom) to obtain a single licence covering all of its transmitters, thereby subjecting it to a significantly lower tax rate than other entities. The regulation seeks to align Telecom's licensing process with that of other transmitter operators by enforcing a ceiling on the tax payable during the transition period and phasing out the network licensing system to implement a more equitable tax structure.
The policy objective articulated in the explanatory statement is to ensure a gradual transition to the new licensing system without causing undue financial strain on Telecom. By phasing in the new system and imposing a tax ceiling of $3,885,831 for Telecom's next licence renewals, the regulation aims to maintain fiscal predictability for Telecom while ultimately achieving a uniform licensing approach. This regulation underscores the intent to streamline the transmitter licensing process and promote fairness in taxation across different entities operating transmitters in Australia.
Scope and Application
The Radiocommunications (Transmitter Licence Tax) Regulations 1986, issued under the Radiocommunications (Transmitter Licence Tax) Act 1983, apply to the Australian Telecommunications Commission (Telecom) and govern the tax imposed on the grant of transmitter licences, specifically targeting the transition from a network licensing system to an item-by-item licensing system. The Act applies to the taxation of transmitter licences, with a particular focus on imposing a ceiling on the tax payable by Telecom during its licence renewals in June 1986, ensuring that the tax does not exceed budgeted amounts. The regulation omits the existing definition of "network" and the annual tax rate on network licences, replacing them with a new sub-regulation that sets a tax ceiling of $3,885,831 for Telecom’s next licence renewals. This ceiling is designed to phase in the new licensing system over time, with subsequent renewals reverting to normal item-by-item licensing rates from May 1987 onwards.
Key Provisions
The primary operative sections of the Statutory Rule 1986 No. 129 involve the modifications to the Radiocommunications (Transmitter Licence Tax) Regulations. Section 2(1) of these regulations, as adopted from the Radiocommunications (Licensing and General) Regulations, now excludes the definition of “network,” effectively disallowing the issuance of network licences, which were previously only applicable to the Australian Telecommunications Commission (Telecom). This change means that all transmitter licences must now be granted on an item-by-item basis. Furthermore, sub-regulation 3(2) has been replaced, establishing a tax ceiling of $3,885,831 for the next licence renewals of Telecom, which will be renewed in June 1986. This ceiling ensures that the tax payable does not exceed Telecom's previous budget based on network licensing.
The Act imposes several obligations on parties involved, particularly on Telecom. It mandates that Telecom must now apply for individual licences for each transmitter rather than a single network licence. Additionally, the Act requires Telecom to adhere to the new tax ceiling for the specified licence renewals, ensuring that the tax burden does not surpass the stipulated amount. These obligations ensure a fair and consistent licensing and taxation system across all entities operating transmitters in Australia.
Breach of the provisions set out in the Statutory Rule 1986 No. 129 could result in various consequences. The Act does not explicitly state penalties for non-compliance with the new licensing and tax provisions. However, failure to adhere to the new requirements could potentially lead to legal disputes, administrative actions, or further legislative measures to enforce compliance. Telecom, in particular, must ensure that it complies with the tax ceiling to avoid budgetary discrepancies and maintain financial planning accuracy. Non-compliance might also invite scrutiny from regulatory authorities, leading to potential enforcement actions or additional regulatory burdens.