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Petroleum (Submerged Lands) Legislation Amendment Bill (No. 2) 2000

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BILL (No.2) 2000










(Circulated by authority of the Minister for Industry, Science and Resources

the Hon Senator Nick Minchin)









This Bill proposes the repeal of section 130 of the Petroleum (Submerged Lands) Act 1967 .


Section 130 makes specific and detailed provision as to the amount that the Commonwealth is to pay the State of Western Australia in respect of each financial year to which it applies.   It was introduced in 1985 to allow the payment of $117.1 million in 1984/85 dollars to Western Australia through an annual schedule of payments to 2004-2005.  This money was derived from the Commonwealth’s share of the royalty from domestic gas sales from the North West Shelf project offshore from Western Australia.  


Under the provisions of section 130, monthly payments are made to Western Australia based on a detailed and comprehensive schedule to 2004-2005.  Provision does not exist for “one-off” prepayment of all of the remaining liability at any stage.


The Commonwealth and the State of Western Australia have agreed that subject to the necessary legislative authorisation, the Commonwealth will, before 30 June 2000, make a one-off payment to that State in discharge of all the Commonwealth’s future obligations under section 130.   It is proposed that the Advance to the Minister for Finance mechanism be employed for this purpose. 


As section 130 does not authorise the Commonwealth to make a payment of this nature, the repeal of section 130 would be necessary prior to the making of the payment, as the section contains an exclusive regime for the making of payments of money of the kind with which it is concerned.   The executive power of the Commonwealth is therefore abrogated by the section, in respect of the expenditure of money for the section’s purpose.   Repeal of section 130 is necessary to remove the statutory abridgement of executive power, thus enabling a one off payment of the kind proposed to be made in exercise of that power.


The proposed repeal of section 130 would allow for the prepayment of the remaining Commonwealth liability to Western Australia before the end of the 1999-2000 financial year, while also removing the statutory obligation to make continuing payments to Western Australia in accordance with the section. 


Financial impact statement

The agreed payment of $79,118,990 will be funded by the Advance to the Minister for Finance mechanism in 1999-2000 and will result in estimated saving from future years' payments of $93.9 million.





Clause 1: Short Title

1.           This Clause is a formal provision specifying the citation of the short title of the Bill.

Clause 2: Commencement

2.           This clause proposes that the Bill will commence on the day it receives Royal Assent.

Clause 3: Schedule 1

3.                        This clause proposes that each Act specified in a Schedule to the proposed Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to the proposed Act has effect according to its terms.

Schedule 1 - Amendment of the Petroleum (Submerged Lands) Act 1967

Item 1: Section 130

4.           This item proposes the repeal of section 130.