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2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Carbon Pollution Reduction Scheme (Charges - General) Bill 2010
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for
Climate Change and Water, Senator the Honourable Penny Wong)
Table of contents
General outline 1
Chapter 1 Charges for the issue of Australian emissions units 3
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Charges for the issue of Australian emissions units
This bill provides for the possibility that the charge payable by a person
to the Commonwealth for issue of an Australian emissions unit as the result
of an auction, or for a fixed charge, is a tax within the meaning of
section 55 of the Constitution (but is neither a duty of customs nor a duty
of excise).
Date of effect: Apart from the formal provisions, which commence on Royal
Assent, the provisions of this bill commence at the same time as section 3
of the proposed Carbon Pollution Reduction Scheme Act 2010 commences.
Proposal announced: The measures are based on the policy positions
included in the White Paper entitled Carbon Pollution Reduction Scheme:
Australia's Low Pollution Future, released by the Government on 15 December
2008. The Prime Minister announced some changes to the Scheme, including
managing the impacts of the global recession, on 4 May 2009. Further
measures negotiated with the Opposition were announced on 24 November 2009.
Financial impact: The financial impact of the Carbon Pollution Reduction
Scheme is addressed in the explanatory memorandum for the main bill.
Regulation impact: The regulation impact statement is attached to the
explanatory memorandum for the main bill.
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1.
Outline of chapter
1. The Carbon Pollution Reduction Scheme (Charges - General) Bill
2010 provides for the imposition of charges for Australian
emissions units issued as the result of an auction or for a fixed
charge if those charges are 'taxation' within the meaning of
section 55 of the Constitution (but are neither a duty of customs
nor a duty of excise).
Context of amendments
2. The Carbon Pollution Reduction Scheme Bill 2010 is the
Government's primary policy tool to drive the reduction of
greenhouse gas emissions. The objectives of the Scheme are to:
give effect to Australia's international climate change obligations
support the development of an effective global response to climate change
take action directed towards meeting Australia's national emission
reduction targets and to do so in a flexible and cost effective way.
3. The issue of Australian emissions units is an essential part of
the 'cap and trade' scheme.
4. The Authority may issue units as a result of an auction it has
conducted or for a fixed charge.
5. Clause 91 of the Carbon Pollution Reduction Scheme Bill 2010
provides that if a charge payable for the issue of an Australian
emissions unit is taxation within the meaning of section 55 of the
Constitution, then the charge is not imposed by that Act, but
instead is imposed by the Carbon Pollution Reduction Scheme
(Charges - General) Act 2010, Carbon Pollution Reduction Scheme
(Charges - Excise) Act 2010 or the Carbon Pollution Reduction
Scheme (Charges - Customs) Act 2010 (whichever is applicable).
6. The Commonwealth does not consider that the charges for the
auction of Australian emissions units or for the issue of units at
a fixed charge are taxes for constitutional purposes. However,
the Government has taken an approach of abundant caution, with the
charges bills providing safeguards in case a court reaches a
different view on this question.
7. Thus, the reason for the approach taken in clause 91 and the three
charges bills is to deal with the possibility that a court may
find that the charges payable for Australian emissions units are
'taxation' within the meaning of section 55 of the Constitution.
8. Section 55 of the Constitution provides:
Laws imposing taxation shall deal only with the imposition of taxation, and
any provision therein dealing with any other matter shall be of no effect.
Laws imposing taxation, except laws imposing duties of customs or of
excise, shall deal with one subject of taxation only; but laws imposing
duties of customs shall deal with duties of customs only, and laws imposing
duties of excise shall deal with duties of excise only.
Summary of new law
9. The Carbon Pollution Reduction Scheme (Charges - General) Bill
2010 provides for the imposition of charges for Australian
emissions units issued as the result of an auction or for a fixed
charge if those charges are 'taxation' within the meaning of
section 55 of the Constitution (but are neither a duty of customs
nor a duty of excise).
Detailed explanation of new law
10. Each of the three charges bills is framed in similar terms.
11. If the amount payable to the Commonwealth for the issue of units
as the result of an auction or for a fixed charge is taxation
within the meaning of section 55 of the Constitution, then the
charge is imposed under this bill. However, the charge is only
imposed so far as it is neither a duty of customs nor a duty of
excise. [Clause 7]
12. However, when enacted, the bill has no effect to the extent, if
any, to which it imposes a tax on property of any kind belonging
to a State (where 'property of any kind belonging to a State' has
the same meaning as in section 114 of the Constitution). [Clause
8]
13. It is assumed that a reference to a State in section 114 of the
Constitution includes a reference to the Australian Capital
Territory and the Northern Territory. [Clause 8]
14. Consistently with the Carbon Pollution Reduction Scheme Bill 2010,
this bill:
extends to every external Territory [Clause 5]
extends to Australia's exclusive economic zone, the continental shelf and
the Joint Petroleum Development Area. [Clauses 6 and 6A]
15. The bill binds the Crown in right of each of the States, the
Australian Capital Territory, the Northern Territory and Norfolk
Island. However, it does not bind the Crown in right of the
Commonwealth. [Clause 4]
16. The short title of the proposed Act is the Carbon Pollution
Reduction Scheme (Charges - General) Act 2010. [Clause 1]
17. Its substantive provisions commence at the same time as section 3
of the proposed Carbon Pollution Reduction Scheme Act 2010.
[Clause 2]
18. Significant terms, including 'auction' and 'issue' are defined by
reference to the Carbon Pollution Reduction Scheme Bill 2010.
[Clause 3]
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