EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 27
Issued by the authority of the
Minister for Employment and Workplace Relations
Seafarers Rehabilitation and Compensation Levy Act 1992
Seafarers Rehabilitation and Compensation Levy Amendment
Regulations 2008 (No. 1) (the Regulations)
The Seafarers Rehabilitation and Compensation Levy Act 1992 (the Levy Act) imposes a levy on seafarer berths on prescribed ships. The purpose of the levy is to finance the Safety Net Fund (the Fund) established under the Seafarers Rehabilitation and Compensation Act 1992 (the Seafarers Act). The Fund exists to meet the compensation claims of seafarers under the Seafarers Act where their employer cannot be identified or otherwise cannot meet its obligations.
Subsection 7(1) of the Levy Act provides that the Governor-General may make regulations prescribing the rate of the levy. The Seafarers Rehabilitation and Compensation Levy Regulations 2002 currently prescribe a levy rate of $35 per seafarer berth.
The Regulations reduce the levy rate to $15 per seafarer berth, in accordance with a recommendation from the Seafarers Safety, Rehabilitation and Compensation Authority (the Seacare Authority).
In accordance with the requirements of subsection 7(2) of the Levy Act the Minister for Employment and Workplace Relations (the Minister) has consulted with the Seacare Authority. The Seacare Authority is a representative body comprising both employer and employee representatives. The Minister is satisfied that the Fund has adequate financial reserves for the purposes of its prudential management. The Seacare Authority advises that, in February 2008, the balance of the Safety Net Fund exceeded $1.22 million, which is greater than the upper target reserve of $846,000 recommended by actuaries as necessary to meet the Fund's present and estimated future liabilities under the Seafarers Act. As the latter sum is the upper target reserve recommended by actuaries as necessary to meet the Fund's present and estimated future liabilities under the Seafarers Act, the Seacare Authority has advised that a reduced levy of $15 per seafarer berth would be sufficient to meet the Fund’s administration costs.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commence on 1 April 2008.
Overview
The Seafarers Rehabilitation and Compensation Levy Amendment Regulations 2008 (No. 1) were introduced to amend the Seafarers Rehabilitation and Compensation Levy Regulations 2002. Enacted by the Minister for Employment and Workplace Relations under the authority of the Seafarers Rehabilitation and Compensation Levy Act 1992, these regulations address the need to adjust the levy rate charged on seafarer berths to ensure the financial sustainability of the Safety Net Fund established under the Seafarers Rehabilitation and Compensation Act 1992. The policy objective is to maintain adequate financial reserves within the Fund to meet compensation claims of seafarers while ensuring the levy remains sufficient to cover administrative costs. Following consultations with the Seafarers Safety, Rehabilitation and Compensation Authority, which confirmed that the Fund's balance exceeded recommended reserves, the levy rate was reduced from $35 to $15 per seafarer berth, effective from 1 April 2008.
Scope and Application
The Seafarers Rehabilitation and Compensation Levy Amendment Regulations 2008 (No. 1) relate to the Seafarers Rehabilitation and Compensation Levy Act 1992, which imposes a levy on seafarer berths on specified ships to finance the Safety Net Fund under the Seafarers Rehabilitation and Compensation Act 1992. This Fund is intended to meet the compensation claims of seafarers where their employer cannot be identified or otherwise cannot meet their obligations. The regulations pertain to any person or entity that operates a prescribed ship carrying seafarers, thereby imposing the levy on these entities and indirectly on the seafarers themselves through their employers. The geographic reach of these regulations is national, given the federal nature of the Act and the need for a uniform approach across all states and territories in Australia. The regulations set a reduced levy rate of $15 per seafarer berth, following consultation with the Seafarers Safety, Rehabilitation and Compensation Authority, which has determined that the Fund's financial reserves are adequate. The reduced rate aims to meet the Fund's administrative costs while ensuring sufficient reserves remain for future liabilities. The authority to create these regulations is granted under subsection 7(1) and (2) of the Levy Act, and they come into effect on 1 April 2008.
Key Provisions
The Seafarers Rehabilitation and Compensation Levy Amendment Regulations 2008 (No. 1) amend the Seafarers Rehabilitation and Compensation Levy Regulations 2002 (the 2002 Regulations) by adjusting the rate of the levy imposed under the Seafarers Rehabilitation and Compensation Levy Act 1992 (the Levy Act) (subsection 7(1)). Specifically, Regulation 3 changes the rate of the levy from $35 to $15 per seafarer berth, in line with the recommendations of the Seafarers Safety, Rehabilitation and Compensation Authority (the Seacare Authority). The new levy rate is intended to ensure that the Safety Net Fund (the Fund) has sufficient funds to meet compensation claims under the Seafarers Rehabilitation and Compensation Act 1992 (the Seafarers Act) while maintaining adequate financial reserves.
The Regulations impose an obligation on the Minister for Employment and Workplace Relations to consult with the Seacare Authority when making decisions about the levy rate. This is in accordance with subsection 7(2) of the Levy Act, which requires the Minister to ensure that the Fund has adequate financial reserves for prudential management. The Seacare Authority is a representative body that includes both employer and employee representatives, and it has advised that a reduced levy rate of $15 per seafarer berth is sufficient given the Fund's financial position. The Minister has satisfied himself that the Fund has adequate reserves, particularly since the balance of the Fund exceeded $1.22 million in February 2008, surpassing the upper target reserve of $846,000 recommended by actuaries.
There are no specific offences, penalties, or consequences for breach outlined in the Explanatory Statement. However, failure to comply with the Levy Act or the Regulations could potentially lead to legal consequences. Under the Levy Act, non-compliance with the levy requirements could result in civil or criminal penalties, although the specifics of these penalties are not detailed in the Explanatory Statement. The 2002 Regulations and the Levy Act itself would need to be consulted to determine the exact penalties for non-compliance. The Regulations come into effect on 1 April 2008, and all parties subject to the Levy Act are expected to adhere to the new levy rate as stipulated.