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Guidelines on compensation for surrendered firearms

I have today released a set of guidelines on the compensation scheme for the surrender of prohibited firearms. The guidelines are designed to explain the procedures which will apply for assessing the compensation payable to owners of surrendered firearms, and to firearms dealers and importers.

Those procedures were agreed to by Police Ministers at the special meeting of the Australasian Police Ministers' Council (APMC) on 17 July 1996.

The guidelines are accompanied by a valuation list which was prepared by an expert group, which included an importer/dealer in firearms and police firearms specialists.

The list is based on average sale prices for firearms listed in major dealers' catalogues in Australia in March 1996, and was settled following consultation with the States and Territories through the Senior Officers' Group of the APMC.

The procedures are designed to be simple and transparent, while ensuring that fair and proper compensation is paid in return for the surrender of prohibited firearms. I urge all Australians who own prohibited firearms to take advantage of the surrender scheme and the compensation arrangements once the procedures are implemented by the States and Territories.

Firearms dealers and importers will be entitled to apply for compensation for any loss in the value of their businesses caused by the prohibitions.

I anticipate that a summary of the other decisions from the APMC meeting of 17 July will be released later this week. Most jurisdictions have their legislation in train and are anticipating early implementation of the detail of the Ministers' resolutions. It is hoped that all jurisdictions will have the necessary legislation in place by September 1996.

Media contacts

Megan Bonny, Office of the Attorney-General, 06 277 7300

Stuart Joynt, Office of the Attorney-General, 09 221 7877

Lydia Buchtmann, Attorney-General's Dept, 06 250 6467

ATTACHMENT 1

COMPENSATION FOR THE SURRENDER OF PROHIBITED FIREARMS

GUIDELINES

General

At the Special Meeting of Police Ministers representing every government in Australia held on 10 May 1996, it was agreed that bans would be placed on certain types of firearms. These are:

. self-loading centre-fire rifles;

. self-loading and pump-action shotguns; and

. self-loading rim-fire rifles.

Each State and Territory will legislate (some have already done so) to prohibit the use and possession of the above classes of firearms except in very limited circumstances.

Following the introduction of new firearms legislation in every jurisdiction, a surrender scheme will allow the owners of prohibited firearms to surrender them for fair and proper compensation. This surrender scheme will cease on 30 September 1997.

The compensation is based on the value of the firearms as at March 1996.

The Commonwealth Government has announced that it will ensure that no tax is paid on these compensation payments.

Once the surrender scheme has concluded, severe penalties will be applied in every State and Territory to breaches of the firearms control laws.

Police Ministers have decided that there are three groups who are entitled to compensation:

I. Firearms dealers

II. Individual owners

III. Collectors

I. Firearms dealers

Dealers will be compensated without delay for any prohibited firearms held in stock (ie Category C and D firearms). They will also be compensated for any unusable ammunition, spares, maintenance equipment and manuals held in stock which is specific to those prohibited firearms.

The value paid to the dealer for each prohibited firearm surrendered will be the published selling price as at 1 March 1996.

Dealers will also be compensated for any loss in business caused by the prohibition of certain firearms under the new legislation. This will be defined as the difference between the value of the business prior to the new legislation and the value of the business following the new legislation.

The following principles will apply to valuing firearms' dealers for loss of business:

(i) compensation will be available to any dealer whose business includes the sale, repair or importation of firearms;

(ii) such a firearms dealer is to arrange for a certified valuation of loss of business to be conducted by an appropriately qualified professional person according to commercially accepted standards;

iii the dealer will be entitled to include the reasonable cost of the valuation in his claim for loss of business;

(iv) the dealer is required to accept the valuation; and

(v) the valuation may be subject to audit.

An "appropriately qualified professional person" may, for example, be a member of the Institute of Chartered Accountants in Australia or a member of the Australian Society of Certified Practising Accountants.

"Commercially accepted standards" would include conducting an economic loss analysis, based on audited financial statements for the last three years, in which the analyst calculates capitalisation of estimated future after-tax profits which will be foregone as a consequence of the State/Territory legislation which prohibits the sale of certain firearms. The analysis should include any discount factor created by increased sale of lawful firearms.

II. Individual firearms owners

Following the introduction of the new firearms legislation in every State and Territory, owners will be required to surrender their prohibited firearms to the authorities subject to the limited exceptions agreed by Police Ministers of all Australian governments.

The following principles will apply to valuing surrendered firearms for compensation purposes:

(i) The firearm will be identified on handover by type, make and model number. It must be confirmed as belonging to one of the categories of prohibited firearms. It will also be identified as being used or new (never fired). There will be no further assessment of condition.

(ii) A list has been prepared of the most common firearms sold in Australia valued at up to $2,500. Prices are based on the average sale prices listed in dealers' catalogues across Australia in March 1996. The list contains a used price, and in some cases a new price, for each of these firearms.

iii The make and model number will be checked against the list. If there is a match, the firearm will be receipted and sufficient detail will be collected at the point of handover to enable compensation to be paid or further contact to be made.

(iv) A second list ("the Reserve List") has been compiled of firearms valued at more than $2,500. These are categorised as either military-style or non- military-style .

(v) Owners of military-style firearms on the Reserve List must surrender the firearms. They will be issued with a receipt and will be paid the list price.

(vi) Owners of non-military-style firearms on the Reserve List will be given the option of:

. agreeing to accept the list value;

. submitting the firearm to an arbitrator for valuation, in which case the owner would be obliged to pay the cost of the valuation as well as to accept the arbitrator's decision - even where that is lower than the listed price (there is no appeal from this process); or

. consigning it with a nominated dealer for sale overseas. Once the surrender scheme has ceased, if the firearm is unsold, the owner would be paid the listed value.

vii Any prohibited firearm not listed may be submitted for valuation as above. If valued at over $2,500 and not military-style, the owner can either accept the valuation or consign it for overseas sale as above. Owners of military-style firearms will not have the option of overseas sale.

viii Any part or accoutrements specific to a prohibited firearm may be surrendered and its value assessed by an arbitrator for fair and proper compensation.

List A and List B (the Reserve List) are attached.

III. Firearms Collectors

Collectors will be permitted the same options for the surrender or sale of individual prohibited firearms as those outlined in paragraphs (i) to (viii) above.

The effect of the agreed prohibitions on collection firearms is different from other firearms. Details of these differences will be released shortly.

Collectors will not be compensated for any loss of value which may be due to the 'breaking up' of the collection or to any other reason.

For further information

Commonwealth Law Enforcement Board

Locked Bag 23

Queen Victoria Terrace

PARKES ACT 2600

Tel: 06 239 7930

Fax: 06 295 7015

ATTACHMENT 2

FIREARMS PRICE LIST

Based on the average prices listed in dealers' catalogues across Australia, March 1996

LIST A

.22 RIMFIRE SELF LOADING RIFLES

MILITARY STYLE SELF LOADING RIFLES

CENTRE FIRE SELF LOADING RIFLES - NON MILITARY

PUMP ACTION SHOTGUNS

SELF LOADING SHOTGUNS

LIST B

RESERVE LIST for firearms over $2,5000

MILITARY STYLE SELF LOADING RIFLES

SELF LOADING CENTRE FIRE RIFLES - NON MILITARY

SELF LOADING SHOTGUNS

[LISTS ARE NOT AVAILABLE ONLINE]