Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004 - 2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PROTECTION OF THE SEA (SHIPPING LEVY) AMENDMENT BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by Authority of the Minister for Transport and Regional Services,
the Honourable Warren Truss MP)
PROTECTION OF THE SEA (SHIPPING LEVY) AMENDMENT
BILL 2005
OUTLINE
The Protection of the Sea (Shipping Levy) Amendment Bill 2005 amends the Protection
of the Sea (Shipping Levy) Act 1981 (the Act).
The Act enables the Australian Government to impose a quarterly levy on ships of 24
metres or more in length and having on board a quantity of ten tonnes or more of oil in
bulk.
Section 6 of the Act prescribes a maximum rate (the cap) of the levy for any quarter,
which is currently set at six cents per ton, where ton is a unit of the net tonnage of the
ship.
Schedule 1 of the Bill removes the cap set out in Section 6 of the Act. The purpose is to
enable access to levy revenue required to fund a national approach to maritime
emergency towage while maintaining the scope for funding of the National Plan to
Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances (the
National Plan).
The Protection of the Sea Levy (PSL) administered by Australian Maritime Safety
Authority (AMSA), currently funds the operations and management of the National Plan.
The current level of National Plan funding is set at 3.3 cents per ton of a ship's tonnage
and pays for the equipment, training and contracted services designed to optimise
preparedness for and the response to any ship-sourced oil or chemical pollution incident
in Australia.
The remaining 2.7 cents available within the current cap is intended to allow the
Government to recover its costs following any oil or chemical spill when such costs can
not be fully recovered from the polluter. In light of recent overseas experiences in
dealing with major oil spills (for example the Prestige and the Erika) or chemical spills
(for example the Ievoli Sun), which have seen very high costs of clean up and response,
and in the time before the outstanding international liability Conventions come into effect
that will provide much improved compensation cover for incidents in Australia, the 2.7
cents buffer is not likely to be adequate to recover costs that the Government may have
to meet should a major incident (especially one involving persistent chemicals) occur.
Australian, State and Northern Territory Government transport ministers on the
Australian Transport Council (ATC) in June 2005 agreed in-principle to the introduction
of a national approach to maritime emergency towage around the Australian coastline to
minimise the risks of ship-sourced marine pollution.
ATC has agreed that funding for the national system, if it proceeds, be on the basis of full
cost recovery from the shipping industry via a single national Levy, and the PSL has been
identified as the most appropriate vehicle for this purpose.
It is not possible to quantify with any accuracy, in advance of market testing via
contestable tendering processes, the costs of the proposed national emergency towage
system together with ongoing management costs. It is therefore inappropriate to impose
an upper limit on the PSL.
If such a limit were set too low, it would need to be revisited by the Parliament before an
adequate programme could be put in place.
Alternatively, if an upper limit is set for the PSL, it would need to be high (an upper-
estimate) so as to avoid a situation where AMSA under-recovers and is unable to fulfil
all of its functions. However, setting a high limit would raise unnecessary industry
concerns about possible future levy changes.
It is therefore proposed that the levy cap be removed so as to provide adequate funding
for the two pollution prevention and combat programs.
This approach will also bring the PSL into line with other AMSA levies, which raise
funds for ship regulatory and aids to navigation purposes, and which do not have caps.
The actual rate of the PSL will be set by Regulation, which is subject to review and
disallowance by Parliament. AMSA follows a policy of consulting regularly and
extensively with industry on its levy arrangements. Since AMSA was established, and in
particular since 1996, AMSA's levy impost on industry has consistently trended
downwards due to efficiency and management improvements. AMSA has its next formal
independent review of its levies scheduled for 2007, consistent with the Commonwealth
Guidelines for Cost Recovery by Information and Regulatory Agencies.
Under policies implemented by the Government since the PSL legislation was
implemented in the early 1970s, the PSL has been closely targeted for specific ship-
sourced pollution prevention and response purposes. Under section 48 of the Australian
Maritime Safety Authority Act 1990, all revenues raised from the PSL must be
appropriated to AMSA. This legislation will ensure that the impost on industry will not
be used for other purposes.
The annual reporting requirements of AMSA's ongoing operations and finances will also
be open to public scrutiny through the Commonwealth Parliament and this will act as a
further safeguard against any possibility of over recovering through any new PSL rate.
FINANCIAL IMPACT STATEMENT
There is no financial impact. The amendment does not alter the current rate of levy,
which is set at 3.3 cents per ton.
4
PROTECTION OF THE SEA (SHIPPING LEVY) AMENDMENT BILL 2005
NOTES ON CLAUSES
Clause 1: Short title
This clause is a formal provision that provides for the Bill, when enacted, to be cited as
the Protection of the Sea (Shipping Levy) Amendment Act 2005.
Clause 2: Commencement
Clause 2 provides for the commencement of the provisions of the Bill.
This clause provides that the Act commences on the day after the proposed Act receives
Royal Assent.
Clause 3: Schedule(s)
By virtue of this clause, the provisions of the Act specified in the Schedule are amended
or repealed as set out in the Schedule and other items in the Schedule have effect
according to their terms.
5
Schedule 1- Amendment to the Protection of the Sea (Shipping Levy) Act 1981.
This Schedule provides for the imposition of a quarterly Protection of the Sea Levy
(PSL) on ships visiting Australian ports which are of 24 metres or more in tonnage
length and carrying ten tonnes or more oil in bulk on board.
Section 6 of the Act provides that the rate of the PSL applicable at any time is subject to
a maximum level which is currently set at six cents per ton, where the word `ton' is one
unit of the net tonnage of the ship. This Section also provides that the actual rate of the
levy at any period is that rate which is prescribed by, and in accordance with, the
regulations for that quarter.
The Act, through Section 9, allows the Governor-General to make any regulation for the
purposes of Sections 6. This schedule has a single item.
Item 1: Section 6
Item 1 of Schedule 1 replaces the words "being a rate not exceeding 6 cents per ton of
the tonnage of a ship" from Section 6 of the Shipping Levy Act with the words "per ton
of the tonnage of the ship".
The effect of this amendment is to remove the legislated provision of an upper limit on
the levy, allowing an appropriate rate to be prescribed through the Protection of the Sea
(Shipping Levy) Regulations as necessary. This amendment will make the provisions of
the Act consistent with other legislation on shipping levies administered by AMSA.
While the situation applying to other Government levy legislation is not uniform, there is
no cap on a range of other levy legislation including the Fisheries Levy Act 1984, Fishing
Levy Act 1991, Stevedoring Industry Levy Act 1997, Foreign Fishing Boats Levy Act
1981, Foreign Fishing Licences Levy Act 1991.
The purpose of the amendment is to enable the Australian Government to have timely
access to required levy revenue through an appropriate rate of levy, which can be
expeditiously imposed through the regulations, thereby removing the need for any
subsequent amendments to the Act if any existing limit is found to be inadequate for the
intended purpose. The regulations are themselves subject to Parliamentary scrutiny.
6