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2002
THE PARLIAMENT OF THE COMMONWEALTH
OF AUSTRALIA
HOUSE OF REPRESENTATIVES
ACIS
ADMINISTRATION AMENDMENT BILL 2002
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for Industry,
Tourism and Resources,
the Honourable Ian Macfarlane MP)
ACIS ADMINISTRATION AMENDMENT BILL
2002
OUTLINE
The ACIS Administration Amendment Bill 2002
(the Bill) makes a series of minor amendments to the ACIS Administration Act
1999.
ACIS Administration Act 1999 Amendments
The
Bill makes a minor change to the ACIS Administration Act 1999 (the ACIS
Act) that will allow eligible motor vehicle producers to claim Automotive
Competitiveness and Investment Scheme (ACIS) uncapped production credits for the
production of derivatives of passenger motor vehicles such as utilities, panel
vans and pick-ups with effect from the date of commencement of
ACIS.
Prior to the introduction of ACIS, the automotive industry received
uncapped duty credits for the production of these derivative vehicles from the
Duty Free Allowance (DFA). In June 1997, when announcing future assistance
arrangements for the automotive industry, the Government stated that the DFA
would continue and that a new transitional assistance program would be
introduced.
ACIS was announced as the new transitional assistance program
in April 1998. ACIS was subsequently modified to embody two elements - an
uncapped element, and a capped element (limited to $2 billion). The uncapped
element is the continuation of the DFA. Motor vehicle producers (MVPs) are
eligible to earn incentives under both elements of ACIS for the production of
motor vehicles according to the following calculations and
definitions:
Uncapped incentives, equal to 15 per cent of the
value of production of passenger motor vehicles (PMVs) sold in Australia
and New Zealand, multiplied by the current PMV tariff rate; and,
Capped
incentives, calculated as follows:
• 10 per cent of the value of
production of PMVs sold in Australia and New Zealand, multiplied by the current
PMV tariff rate; and,
• 25 per cent of the value of all other motor
vehicle production (other than PMVs sold in Australia and New Zealand),
multiplied by the current PMV tariff rate.
Capped production incentives
form part of a broader pool of incentives that is limited to $2 billion over
five years through the operation of modulation.
The current ACIS
definition of passenger motor vehicles unintentionally excludes
utilities, panel vans and pick-ups. As a result MVPs are only eligible to claim
capped payments for the production of these vehicles. Modulation means that the
production of these derivative vehicles receives a lower rate of payment than if
they were paid from the uncapped element. This is clearly inconsistent with the
Government’s 1997 stated intention to continue the DFA.
This Bill
makes specific provision in the ACIS Act for the production of utilities, panel
vans and pick-ups to attract uncapped incentives from the commencement date of
ACIS, in line with the Government’s publicly stated
intention.
FINANCIAL IMPACT STATEMENT
The financial impact of the Bill on Commonwealth revenue forgone is expected
to be in the order of $5 million, with motor vehicle producers becoming eligible
for higher rates of payment for claims made in 2001-02. It is anticipated that
the revenue impact will fall in the financial year
2002-03.
ACIS ADMINISTRATION AMENDMENT BILL
2002
NOTES ON CLAUSES
Clause 1 Short Title
1. Clause 1 is a formal provision specifying
the short title of the Bill.
Clause 2 Commencement
2. Clause 2 provides for the commencement of
the Act. Subclause 2(1) provides that each provision of the Act specified in
column 1 of the table commences, or is taken to have commenced, on the day or at
the time specified in column 2 of the table.
Clause
3 Schedule(s)
3. Clause 3 provides for the Schedule to the Act. It
provides that the Acts specified in the Schedule to the Bill are amended or
repealed as set out in that Schedule.
Schedule 1 Utilities and other
specified load-carrying vehicles
ACIS Administration Act
1999
Item 1 Subsection 6(1)
1. This item inserts the
definition of specified load-carrying vehicles, which specifically
includes those customs tariff classifications that cover utilities, panel vans
and pick-ups.
Item 2 Subsection 42(1) (definition of
A)
2. This item adds the production value of specified load-carrying
vehicles to the formula that is used by the Secretary to calculate the
amount of unmodulated uncapped production credits for MVPs.
3. This item clarifies that a passenger motor vehicle or a
specified load-carrying vehicle is a motor vehicle for the purposes of
ACIS.
Item 4 Subsection 42(2) (definition of C)
4. This item
adds the production value of specified load-carrying vehicles to the
formula that is used by the Secretary to calculate unmodulated capped production
credits for MVPs.
Item 5 Transitional Provisions
5. As the
amendments made by this Bill operate from the commencement date of ACIS, 1
January 2001, this item allows an MVP to amend past ACIS returns to take account
of the amendments included in this Bill.
If the Secretary becomes aware that
any calculation made under section 42 of the ACIS Act is not correct because it
does not take account of the amendments included in this Bill, then this item
also requires the Secretary to amend that calculation and amend the ACIS ledger
accordingly.