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Industrial Chemicals Charges (Excise) Bill 2017

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This addendum responds to concerns raised by the Senate Standing Committee for the Scrutiny of Bills in Scrutiny Digest No. 8, dated 9 August 2017.        



(Circulated by authority of the Assistant Minister for Health, the Hon Dr David Gillespie MP)




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Specifying the amount of a charge or the method for calculating the amount of a charge in regulations, as opposed to the Act itself, ensures that there is appropriate flexibility to change the amount of a charge or the method for calculating the amount of a charge over time. This helps to avoid over or under recovery and will eliminate the need to amend primary legislation as necessary changes to cost recovery arrangements evolve because the efficient administrative costs of the new scheme become more evident.


AICIS will undertake a detailed annual consultation process (in accordance with the Public Governance and Accountability Act 2013, the Australian Government Charging Framework and the Australian Government Cost Recovery Guidelines), in order to inform the value of the charge included in the regulations for each registration class.


Consistent with current practice, AICIS will publish an annual Cost Recovery Implementation Statement (CRIS) that will detail AICIS activities that are cost recovered, the cost recovery model (outputs and business processes, costs of the activity and design of the cost recovery charges), as well as options for cost recovery. The CRIS will include detailed information about financial estimates and performance, and the rationale for the proposed fees and charges for the coming year.


This approach is compliant with the Australian Government Cost Recovery Guidelines which also provide that, where a cost recovery levy is being imposed (via a Taxation Act), the relationship between the charges and the costs should reflect the efficient overall costs of the activity where revenue generated for the activity approximates the expenses incurred in providing the activity (and this is also reflected in the annual CRIS).


There are two additional controls that govern the extent of cost recovery from the regulated industry:


·          Fees and charges are set by regulation, which requires them to be proposed to the Executive Council by the responsible Minister. The Minister would therefore need to be satisfied that the fees and charges are not excessive prior to proposing the regulations.


·          Regulations must be tabled in the Senate, and are subject to motions of disallowance. This Parliamentary scrutiny of fees and charges provides another safeguard against over-recovery.


This provides a high degree of accountability and transparency to stakeholders regarding the annual registration charge, such that the need to include a maximum charge in the bills is reduced.


Further, an arbitrary maximum has not been included in the bills because:


·          any maximum described in the bills would necessarily be higher than the maximum amount charged (misrepresenting the amount payable by any registrant). This would be confusing for stakeholders and is likely to lead to criticism


·          it would misrepresent the amount likely to be payable by most registrants. Under current arrangements, the amount of registration charge payable by a registrant varies between $138 and $24,800 per year, based on the value of the chemical introduced by the registrant in a registration year. In 2016-17, only around 5% of registrants are expected to pay the highest amount. Under the new legislation, the registration charges will also be tiered (based on brackets of introduction values). If the bills were to set a maximum charge, it would misrepresent the magnitude of charge likely to be payable by most registrants (reducing transparency), and


·          there is minimal risk that the charge would be characterised as a general taxation (increasing the necessity for a maximum to be set in the bills). Rather, the charge is clearly a cost recovery levy, earmarked to fund activity that relates to the group of persons being charged (namely registrants introducing industrial chemicals into Australia in a registration year). As detailed in the Australian Government Cost Recovery Guidelines, this is an appropriate circumstance in which to apply the guidelines to determine the relevant charge.


For these reasons, the bills do not set an upper limit for the charge and instead rely on the general cost recovery rules to provide the necessary assurances and transparency to stakeholders.







(Circulated by authority of the Assistant Minister for Health, the Hon Dr David Gillespie MP)