Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
1999
THE PARLIAMENT OF THE COMMONWEALTH
OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
AVIATION FUEL REVENUES
(SPECIAL APPROPRIATION) AMENDMENT BILL
1999
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Minister for Transport and
Regional Services, the Hon. John
Anderson MP)
ISBN: 0642 40335X
This Bill is one in a package of three Bills to implement the Government's
Budget decision to increase the customs and excise duty payable on aviation
gasoline (avgas) and aviation kerosene (commonly referred to as aviation turbine
fuel or avtur) to:
• provide funding for the Civil Aviation Safety
Authority's role of fostering air safety regulation in Australia;
and
• offset the Government's subsidisation of Airservices Australia
operations at a number of control towers at regional and general aviation
airports.
This Bill amends the Aviation Fuel Revenues (Special
Appropriation) Act 1988 (the Act). Customs and excise duties on aviation
gasoline (avgas) and aviation kerosene (avtur) are currently levied under the
Customs Tariff Act 1995 and the Excise Tariff Act 1921. The money
raised by these duties is then appropriated under the Act. The Act sets up two
standing appropriations. Section 4 of the Act appropriates an amount of money
from Consolidated Revenue according to a formula statutory rate
x litres of avgas. This is divided between the Civil
Aviation Safety Authority (CASA) and Airservices Australia (Airservices) in
proportions determined by the Minister. The current percentage split results in
CASA receiving 100 per cent of the amount of customs and excise duty levied on
avagas. Section 6 of the Act appropriates an amount from Consolidated Revenue
equal to the amount of excise duty and customs duty on avtur received (less
amounts rebated). The whole amount appropriated goes to CASA.
In the 11
May 1999 Budget the Government announced an increase in excise and customs duty
on avgas of 0.467 cents per litre and an increase on avtur of 0.391 cents per
litre in order to address an ongoing shortfall in the funding of the Civil
Aviation Safety Authority. This brings the total amount of duty appropriated to
the Civil Aviation Safety Authority to 2.2 cents per litre for both avgas and
avtur. The Government has also announced that there is to be an additional duty
surcharge of 0.51 cents per litre for both avgas and avtur to offset the
Airservices (Location Specific Pricing) Subsidy for maintaining control tower
services at regional and general aviation airports. The surcharge is limited to
two years and will be reviewed before the two year period ends. These measures
are to take effect from 12 May 1999.
The Bill amends the Act to give
effect to these measures. Avtur will now be treated in the same manner as
avgas. The Bill enables customs and excise duties on avtur as well as avgas to
be appropriated to CASA and Airservices, and the Minister to determine the
amount appropriated per litre of avgas and avtur.
To enable the new
arrangements to take effect from 12 May 1999, the Bill provides for an interim
period during which payments collected between 12 May and the commencement date
are adjusted to the extent to which they exceed payments which would have been
made if the statutory rate of 2.2 cents per litre was in effect from 12 May.
The Bill also provides for the repeal of requirements for mandatory
consultation with the Boards of CASA and Airservices in relation to setting the
'statutory rate' and on setting the respective shares of revenue between CASA
and Airservices. Determining these matters is a Government responsibility on
which legislated consultation is now not considered appropriate. However, the
Minister will continue to consult with the Boards of CASA and Airservices as
appropriate.
The other Bills in the package are
the:
• Excise Tariff Amendment (Aviation Fuel Revenues) Bill 1999,
which increases the rate of excise duty on avgas and avtur to 2.71 cents per
litre, on and from 12 May 1999; and
• Customs Tariff Amendment
(Aviation Fuel Revenues) Bill 1999, which increases the rate of customs duty on
avgas and avtur to 2.71 cents per litre, on and from 12 May 1999.
The increased rates of customs and excise duty on aviation fuels are
projected to raise an extra $8.6 million per annum for the Civil Aviation Safety
Authority, bringing its total annual revenue from aviation fuel duty to
$46 million.
No appropriation is to be made direct to Airservices
at this time. Annual revenue from the 0.51 cents per litre duty surcharge is
projected to be $11.1 million and will remain in Consolidated Revenue Fund.
This will offset the subsidy for regional airport control towers; being $11
million for 1999-2000 and $7 million for 2000-01.
Clause 1 provides that the Bill, once enacted, may be cited as the
Aviation Fuel Revenues (Special Appropriation) Amendment Act
1999.
This clause provides that the Act will commence on the day on which it
receives the Royal Asset.
This clause provides that the Aviation Fuel Revenues (Special Appropriation) Act 1988 (the Principal Act) is amended as set out in the Schedule.
Currently, the Principal Act provides for appropriations for both aviation
gasoline (avgas) and aviation kerosene (avtur) on slightly different bases, set
out in sections 4 and 6 respectively. Item 1 amends the definition of
‘eligible aviation fuel’ to include avtur entered for home
consumption from 12 May 1999, and by so doing will permit both avgas and avtur
to be dealt with on the same basis under section 4 of the Act.
Subsection 3A(2A) of the Principal Act is repealed as the requirement for
mandatory consultation with the Boards of the Civil Aviation Safety Authority
(CASA) and Airservices Australia (Airservices) is not always appropriate when
the Minister makes a determination under subsection 3A(1) or (2).
Subsection 4(1A) is repealed as the requirement for mandatory consultation
with the Board of CASA and Airservices Boards is not always appropriate when the
Minister determines those organisations’ respective shares of revenue from
fuel duties.
Section 6 of the Principal Act provides for the payment of revenue from
duties on avtur to be paid to CASA. However, after the amendments money paid to
CASA in relation to avtur will be dealt with in the Principal Act in the same
way as money paid in relation to avgas, under section 4. Section 6 is therefore
redundant and is repealed.
This item provides that the amendments made by this Act to the Principal Act
apply to duties on eligible aviation fuel collected by the Commonwealth from the
date of Royal Assent.
Customs and excise duties on aviation fuel will be increased with effect from
12 May, but this Act will not commence until Royal Assent, which may be some
time after 12 May. Between 12 May and the commencement CASA will continue
receiving money from avgas and avtur duties as if the Principal Act had not been
amended. It is proposed to reduce the ‘statutory rate’ for both
avgas and avtur by way of Ministerial determination from the date of
commencement. This reduced ‘statutory rate’ should reduce the
amount appropriated to CASA from 12 May to ensure that CASA does not receive a
windfall gain. However, because CASA will be, in effect, overpaid during the
period 12 May to the commencement date, this item requires an adjustment to be
made of the amounts payable to CASA following commencement.