EXPLANATORY STATEMENT
Issued by authority of the Acting Minister for Transport and Regional Services
Fuel Tax Act 2006
Road User Charge Determination 2006 (No. 1)
The Fuel Tax Act 2006 (the Act) establishes a mechanism to reduce the fuel tax credit provided to eligible businesses and non-profit bodies for fuel used on a public road in vehicles with a gross vehicle mass of more than 4.5 tonnes for business purposes.
Subsection 43‑10(5) of the Act provides that the Minister for Transport and Regional Services (the Transport Minister) must determine the amount of the road user charge.
Divisions 41 and 43 of the Act provide that businesses registered or required to be registered for Goods and Services Tax and non-profit bodies are entitled to a partial fuel tax credit for fuel used on a public road for business purposes in registered vehicles with a gross mass of more than 4.5 tonnes. The fuel tax credit claimable is equal to the amount of the effective fuel tax (excise) that is payable on the fuel minus the road user charge.
The road user charge notionally recovers the Australian Government’s share of road construction and maintenance costs attributed to heavy vehicles. The remainder of road construction and maintenance costs attributed to heavy vehicle is recovered by states and territories through heavy vehicle registration charges.
The road user charge was introduced as the existing arrangements for providing fuel tax concession for heavy vehicles were found to be inefficient and in need of reform. The road user charge, and the system for setting the charge, were proposed in the Energy White Paper, Securing Australia’s Energy Future (http://www.pmc.gov.au/publications/energy_future/index.htm).
The instrument determines a road user charge rate of $0.19633 per litre of taxable fuel and is effective on the commencement of the Act.
Until the determined road user charge rate takes effect, the Energy Grants (Credits) Scheme Act 2003 (EGCS Act) entitles certain heavy vehicle operators to an on-road credit of $0.18510 per litre of diesel used for eligible on-road activities. This credit is paid to partially offset the diesel fuel excise and results in a net effective excise rate of $0.19633 per litre.
The road user charge rate determined by this instrument is equivalent to the net effective excise rate under the EGCS Act applying the current rate of charge.
Detailed industry and stakeholder consultation was undertaken during 2005 by the National Transport Commission as part of their work to develop recommendations for a Third Heavy Vehicle Road Pricing Determination. This consultation included the release of a Draft Regulation Impact Statement for public comment in October 2005 and the release of a final Regulation Impact Statement in January 2006.
No further consultation has been undertaken as the rate declared in this instrument is effectively unchanged from the rate provided for under the EGCS Act.
The Act does not specify any conditions that need to be satisfied before the Minister may make the instrument.
The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.