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Aviation Fuel Revenues (Special Appropriation) Amendment Bill 1999

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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)

 



AVIATION FUEL REVENUES (SPECIAL APPROPRIATION) AMENDMENT BILL 1999

outline

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. [DoT1]  

financial impact statement

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. 

 



Aviation Fuel Revenues (Special Appropriation) Amendment Bill 1999

 

Clause 1 - Short title

Clause 1 provides that the Bill, once enacted, may be cited as the Aviation Fuel Revenues (Special Appropriation) Amendment Act 1999 .

 

Clause 2 - Commencement

This clause provides that the Act will commence on the day on which it receives the Royal Asset.

 

Clause 3 - Schedule(s)

This clause provides that the Aviation Fuel Revenues (Special Appropriation) Act 1988 (the Principal Act) is amended as set out in the Schedule.



 

Schedule 1 - AmendmentS concerning aviation fuel revenues

 

Item 1 Section 3 (definition of eligible aviation fuel )

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.

 

Item 2 Subsection 3A(2A)

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).

 

Item 3 Subsection 4(1A)

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.

 

Item 4 Section 6

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.

 

Item 5 Application

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.

 

Item 6 Adjustment of amounts payable to CASA

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.

 


  [DoT1] Remove if it is decided to drop these Bills.