EXPLANATORY STATEMENT
Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1)
Issued by the authority of the Australian Communications Authority (‘ACA’).
This instrument is the Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1) (the Amendment Determination). It amends the Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Determination 2001 (the Determination).
Under subsection 101A(1) of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the Act) if a National Rely Service (NRS) levy remains unpaid after the day by which it must be paid, the person is liable to a penalty on the unpaid amount for each day until the entire levy has been paid. Subsection 101A(2) prescribes the penalty rate at 20% per year, or such lower rate as the ACA determines in writing for the purposes of this subsection.
The ACA made the Determination on 14 November 2001 under subsection 101A(2) of the Act.
The purpose of the Amendment Determination is to simplify the late payment penalty calculation by amending the lower percentage specified in the Determination.
Consultation
Application of the amended lower percentage rate simplifies the late payment penalty calculation making it easier for the carrier to understand and results in an immaterial variation to the penalty amount payable (calculated using the previous lower percentage rate).
The Office of Regulation Review advised that a Regulation Impact Statement (RIS) is not required for the change to the instruments (ID number 6402).
The Department of Finance and Administration advised that a Cost Recovery Impact Statement (CRIS) is not required given that fines and pecuniary penalties are excluded from the cost recovery policy.
Notes on the Determination
Section 1 - Name of Determination
Section 1 provides that the name of the Amendment Determination is the Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1).
Section 2 - Commencement
Section 2 provides for the commencement of the Amendment Determination on the day after registration.
Section 3 provides that the Determination is amended in accordance with Schedule 1 of the Amendment Determination.
Schedule 1 - Amendments
Schedule 1 sets out the amendments to the Determination which will be taken to have commenced on the day after registration of the Amendment Determination.
Item [1] – Section 3, definition of general interest charge rate
Item 1 amends the definition of the lower percentage rate applied to calculate the penalty amount. The general interest charge (GIC) rate defined to mean the general interest charge rate provided for by section 8AAD of the Taxation Administration Act 1953 has been omitted. Consequently the previous financial year average GIC rate defined to mean the rate worked out in accordance with Schedule 1 has been inserted.
Item [2] – Section 5
Item 2 omits reference to the general interest charge rate and replaces it with the previous financial year average GIC rate.
Item [3] – Section 6
Item 3 omits reference to the general interest charge rate and replaces it with the previous financial year average GIC rate.
Item [4] – After section 6
Item 4 introduces Schedule 1 Calculation of previous financial year average GIC rate and consists of two sections. Section 1 of Schedule 1 provides the formula definition of the previous financial year average GIC rate in section 3. Section 2 of Schedule 1 specifies the rounding provisions to apply when calculating the previous financial year average GIC rate using the formula definition.
Overview
The Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1) was introduced to address the complexity of calculating late payment penalties under the Telecommunications (Consumer Protection and Service Standards) Act 1999. The Australian Communications Authority (ACA), the body responsible for enacting this amendment, aimed to streamline the penalty calculation process by altering the lower percentage rate specified in the original Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Determination 2001. This amendment replaces the general interest charge rate with the previous financial year average general interest charge rate, simplifying the penalty calculation while maintaining a negligible impact on the actual penalty amounts. This change was intended to ease understanding for carriers and ensure that the penalty remains effective.
Scope and Application
The Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1) applies to the amendment of the Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Determination 2001, under the authority of the Australian Communications Authority (ACA). This amendment aims to streamline the late payment penalty calculation for National Relay Service (NRS) levies by modifying the lower percentage rate specified in the original Determination. This change is intended to simplify the penalty calculation process for carriers, resulting in an insignificant variation to the penalty amount payable. The Amendment Determination applies to any person liable for the late payment of an NRS levy, effectively impacting telecommunications carriers and their obligations under the Telecommunications (Consumer Protection and Service Standards) Act 1999. The Amendment Determination operates within the jurisdiction of the Commonwealth and is applicable nationally, as it amends a determination made under the Act. There are no stated exclusions or exemptions in this Amendment Determination, and it does not establish any new thresholds beyond those already set out in the original Determination. The application of this Amendment Determination may be further defined or extended through subordinate instruments issued by the ACA.
Key Provisions
The Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Amendment Determination 2005 (No. 1) (sections 1 to 4) amends the Telecommunications (Consumer Protection and Service Standards) (Late Payment of NRS Levy) Determination 2001 (section 3) to simplify the late payment penalty calculation for unpaid National Relay Service (NRS) levies. The amendment replaces the previously used general interest charge rate with the previous financial year average general interest charge rate, making the penalty calculation easier to understand while maintaining a comparable penalty amount. The changes take effect on the day after the Amendment Determination is registered (section 2).
The Amendment Determination imposes specific obligations on telecommunications carriers who fail to pay NRS levies on time. Under the Telecommunications (Consumer Protection and Service Standards) Act 1999, carriers are liable for a penalty on any unpaid NRS levy, calculated at a specified percentage rate per year for each day the levy remains unpaid (subsection 101A(1)). The Amendment Determination revises this percentage rate to ensure consistency and clarity in penalty calculations. The carriers must ensure timely payment of NRS levies to avoid incurring additional costs due to late payment penalties.
Failure to comply with the requirements of the Amendment Determination may result in financial penalties for the telecommunications carriers. Under subsection 101A(1) of the Telecommunications (Consumer Protection and Service Standards) Act 1999, carriers are liable for a penalty on the unpaid amount for each day until the entire levy has been paid. The penalty rate is specified as 20% per year, or a lower rate determined by the Australian Communications Authority (subsection 101A(2)). The Amendment Determination aims to maintain a consistent penalty rate, ensuring that carriers are aware of the financial implications of late payments.
In the event of a breach of the Amendment Determination, the primary consequence is the imposition of a financial penalty on the telecommunications carrier. The penalty is calculated based on the revised percentage rate specified in the Amendment Determination and applies for each day the NRS levy remains unpaid. The maximum penalty is determined by the percentage rate applied to the unpaid levy amount. The Australian Communications Authority has the authority to enforce these penalties and ensure compliance with the amended provisions.