EXPLANATORY STATEMENT
Issued by authority of the Minister for Infrastructure, Transport, Regional Development and Local Government
Fuel Tax Act 2006
Road User Charge Determination (No. 1) 2009
Heavy vehicles are charged to recover that part of the road construction and maintenance costs that are attributed to heavy vehicles (cost recovery). Part of the costs are recovered by states and territories through heavy vehicle registration charges and the balance by the Commonwealth through the fuel based Road User Charge.
The Fuel Tax Act 2006 (the Act) establishes a mechanism for the collection of the Road User Charge by reducing 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.
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.
Subsection 43‑10(7)(b) of the Act provides that the Minister for Infrastructure, Transport, Regional Development and Local Government (the Transport Minister) may determine the amount of the Road User Charge. Accordingly, the Road User Charge Determination (No. 1) 2009 increases the rate of the Road User Charge from 21 cents per litre to 21.7 cents per litre to recover an attributable portion of increased government road expenditure and ensure all heavy vehicles continue to pay their fair share of road costs.
In December 2008, the Australian Parliament passed amendments to the Fuel Tax Act 2006. Subsections 43-10(9)(a)(i) and (ii) of the Act now require that the Transport Minister must ensure that any proposed increase in the rate of the Road User Charge (and any data relied upon to determine an increase) be made publicly available at least 60 days prior to the making of a legislative instrument by the Transport Minister. Subsection 43-10(9)(b) also requires that the Transport Minister consider any comments received, in the time specified by the Transport Minister, from the public about the proposed increase.
In accordance with subsections 43-10(9)(a) and (b) of the Act, the Transport Minister wrote to the National Transport Commission (NTC) on 6 April 2009 requesting that the NTC undertake to calculate the heavy vehicle charge annual adjustment factor and the proposed rate of the Road User Charge that would result when the annual adjustment factor was applied to the existing Road User Charge rate of 21 cents per litre. In addition to publishing the proposed rate, the Transport Minister requested that the NTC also publish the data relied upon to determine the annual adjustment factor and undertake a period of 4 weeks public consultation.
On 21 April 2009, the NTC invited public comment on a consultation document which set out the data and calculations used to determine the 2009 heavy vehicle charges annual adjustment factor and the resulting proposed 0.7 cent per litre increase in the Road User Charge from 21 cents per litre to 21.7 cents per litre to take effect on 1 July 2009. During the subsequent four week consultation period, the NTC held a public workshop attended by a number of key industry stakeholders and received submissions on the consultation document.
On 1 June 2009, the NTC wrote to the Transport Minister advising that the public consultation process did not highlight any substantive issues with the annual adjustment calculations. The NTC recommended that the Transport Minister apply the annual adjustment factor to the Road User Charge to ensure ongoing cost recovery of the heavy vehicles’ share of government road construction and maintenance expenditure.
The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Fuel Tax Act 2006, enacted by the Australian Parliament, aims to facilitate the collection of the Road User Charge to recover road construction and maintenance costs attributable to heavy vehicles. This Act operates by adjusting the fuel tax credit provided to eligible businesses and non-profit bodies for fuel used on public roads in vehicles exceeding 4.5 tonnes for business purposes. By reducing the fuel tax credit by the amount of the Road User Charge, the Act ensures that heavy vehicles contribute their fair share of road costs. The Transport Minister, under the authority granted by the Act, determined the Road User Charge through the Road User Charge Determination (No. 1) 2009, raising the charge from 21 cents per litre to 21.7 cents per litre to account for increased government road expenditure and maintain equitable cost distribution among road users. This determination followed a public consultation process mandated by the Act, ensuring transparency and consideration of stakeholder feedback.
Scope and Application
The Fuel Tax Act 2006 applies to businesses registered or required to be registered for Goods and Services Tax (GST) and non-profit bodies that use heavy vehicles, defined as those with a gross vehicle mass over 4.5 tonnes, for business purposes on public roads. The Act operates across the Commonwealth of Australia, and it establishes a mechanism to collect the Road User Charge through a reduction in the fuel tax credit provided to eligible entities for fuel used in these vehicles. The Act aims to ensure that heavy vehicles contribute their fair share of road construction and maintenance costs by adjusting the fuel tax credit to reflect the Road User Charge. This charge is determined by the Minister for Infrastructure, Transport, Regional Development and Local Government, who may amend the charge rate through legislative instruments like the Road User Charge Determination (No. 1) 2009, which increased the charge from 21 cents per litre to 21.7 cents per litre. The Act also mandates public consultation before any changes to the Road User Charge are implemented.
Key Provisions
The main operative sections of the Road User Charge Determination (No. 1) 2009 (the Determination) are subsections 43-10(9)(a) and (b) of the Fuel Tax Act 2006 (the Act), which outline the process for determining and announcing any proposed increase in the Road User Charge. Under section 43-10(9)(a), the Transport Minister must ensure that any proposed increase in the rate of the Road User Charge, along with the data used to determine this increase, is made publicly available at least 60 days before the Transport Minister makes a legislative instrument. This provision ensures transparency and allows for public scrutiny of the calculations and data underlying any proposed changes to the Road User Charge. Section 43-10(9)(b) requires the Transport Minister to consider any public comments received within the specified time period regarding the proposed increase. This section ensures that the Transport Minister takes into account public feedback before making a decision on the proposed increase.
The Determination imposes several obligations on the parties it governs. Firstly, the Transport Minister is required to request the National Transport Commission (NTC) to calculate the heavy vehicle charge annual adjustment factor and the proposed rate of the Road User Charge. This obligation ensures that the calculations and determinations are conducted by an independent body, which enhances the credibility and fairness of the process. Secondly, the NTC is required to publish the proposed rate of the Road User Charge, the data relied upon to determine the annual adjustment factor, and undertake a period of public consultation. This obligation ensures that the public has an opportunity to review and comment on the proposed changes. Finally, the NTC is required to consider any public submissions received during the consultation period and advise the Transport Minister on whether to proceed with the proposed increase.
Breach of the obligations outlined in the Determination may have civil or criminal consequences, depending on the nature and severity of the breach. For example, if the Transport Minister fails to ensure that any proposed increase in the Road User Charge is made publicly available at least 60 days before making a legislative instrument, this may result in a civil penalty. The maximum penalty for contravening a legislative instrument under the Legislative Instruments Act 2003 is 500 penalty units, which is equivalent to AUD 50,000 at the time of writing. If the breach involves fraudulent or dishonest conduct, it may also constitute a criminal offence under the Criminal Code Act 1995, which carries a maximum penalty of 10,000 penalty units or imprisonment for 10 years, or both. However, the Determination does not specify any particular penalties for breach of its obligations.