Bills Digest No. 19, 2018–19
PDF version [627KB]
Kaushik Ramesh
Law and Bills Digest Section
30
August 2018
Contents
The Bills Digest at a glance
Purpose of the Bill
Structure of the Bill
Commencement details
Background
Committee consideration
Position of interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Other provisions
Levy Bill
Concluding comments
Date introduced: 28
February 2018
House: House of
Representatives
Portfolio: Infrastructure
and Transport
Commencement: Refer
to page 5 of this Digest for details.
Links: The links to the Bills,
their Explanatory Memoranda and second reading speeches can be found on the Bills’
home pages for the Marine
Safety (Domestic Commercial Vessel) Levy Bill 2018, the Marine
Safety (Domestic Commercial Vessel) Levy Collection Bill 2018 and the Marine
Safety (Domestic Commercial Vessel) Levy (Consequential Amendments) Bill 2018,
or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at August 2018.
The Bills Digest at a glance
Purpose and Background
The Marine Safety (Domestic Commercial Vessel) Levy Bill
2018, the Marine Safety (Domestic Commercial Vessel) Levy Collection Bill 2018
and the Marine Safety (Domestic Commercial Vessel) Levy (Consequential
Amendments) Bill 2018 together implement a new levy to be paid by persons
responsible for domestic commercial vessels in Australia. Domestic commercial
vessels are vessels used for commercial, government or research activities.
The new levy implemented by the three Bills will allow the
Australian Maritime Safety Authority (AMSA) to cost recover for regulatory
services provided to domestic commercial vessels under the Marine Safety
(Domestic Commercial Vessel) National Law Act 2012, which implemented a National System for Domestic Commercial
Vessel Safety which regulates certification, construction, equipment, design
and operation of domestic commercial vessels. Regulatory services provided
under this National System include providing certificates of survey (proof that
a vessel has been surveyed and meets the required standards) and certificates
of operation to vessels. Currently services under the National System are
provided by marine safety agencies in each state and territory; with the
passage of these three Bills, it is envisaged that AMSA will take over most of
the service delivery from these agencies.
Stakeholders have largely been critical of the concept of
a new levy for domestic commercial vessels. The Transport and Infrastructure
Council and the Commonwealth Government have together agreed to a funding
package of $112.4 million to assist industry with the transition and no levy
will be charged to industry in the first three years of AMSA taking over
responsibility for service delivery. Legislative rules made under the Bills
will allow the amount of the new levy to account for this transitional package.
Purpose of
the Bill
The purpose of the Marine Safety (Domestic Commercial
Vessel) Levy Bill 2018 (Levy Bill) is to create and impose a levy on certain
domestic commercial vessels. The Levy Bill provides for which domestic
commercial vessels the levy will apply to, how the amount of levy is determined
and what persons are liable to pay the levy.
The purpose of the Marine Safety (Domestic Commercial
Vessel) Levy Collection Bill 2018 (Levy Collection Bill) is to provide
requirements around the collection of the levy imposed by the Levy Bill.
Specifically, the Levy Collection Bill will provide for when a levy is due and
payable, requirements around late penalties, advance payments and refunds of
certain payments.
The purpose of the Marine Safety (Domestic Commercial
Vessel) Levy (Consequential Amendments) Bill 2018 (Consequential Amendments
Bill) is to make consequential amendments the Australian Maritime
Safety Authority Act 1990 (AMSA Act), the Marine Navigation
(Regulatory Functions) Levy Collection Act 1991 (Regulatory
Functions Levy Collection Act) and the Marine Safety
(Domestic Commercial Vessel) National Law Act 2012 (National
Law Act) to give effect to the levy.
The three Bills in conjunction (the Levy Package Bills)
have the purpose of creating a framework that enables the Australian Maritime
Safety Authority to recover the costs of providing services under the National
Law Act.
Structure
of the Bill
Levy Bill
The Levy Bill does not consist of any distinct parts or schedules.
The provisions can be divided up as follows:
- clauses
1-7 relate to definition of key terms and provisions about the application
of the Levy Bill
- clauses
8-10 relate to the amount of the levy and how it is imposed
- clauses
11-14 relate to persons liable to pay the levy
- clause
15 is a constitutional provision and
- clauses
16-17 relate to the making of legislative rules under the Levy Bill.
Levy
Collection Bill
The Levy Collection Bill does not consist of distinct
parts or schedules. The provisions can be divided up as follows:
- clauses
1-7 relate to definition of key terms and provisions about the application
of the Levy Collection Bill
- clauses
8-9 relate to when the levy is due and payable
- clauses
10-11 relate to late penalties
- clause
12 relates to AMSA assessments
- clauses
13-15 relate to other requirements around payments
- clauses
16-18 relate to treatment of partnerships, unincorporated associations and
trusts with multiple trustees
- clause
19 relates to delegation and
- clause
20 relates to legislative rules made under the Levy Collection Bill.
Consequential
Amendments Bill
The Consequential Amendments Bill consists of three
clauses and one schedule:
- clauses
1-3 relate to the title, commencement of the Bill and the operation of Schedule
1 and
- Schedule
1 contains amendments to the AMSA Act, the Regulatory
Functions Levy Collection Act and the National Law Act.
Commencement
details
The Levy Bill will commence on the day after receiving
royal assent. Clauses 1-2 of the Levy Collection Bill commence on the
day of royal assent, however the remainder of the Bill commences at the same
time as the Levy Bill, and will not commence at all if the Levy Bill does not
commence. Clauses 1-3 of the Consequential Amendments Bill commence on
the day of royal assent. The remainder of the Consequential Amendment Bill,
which represent the key provisions of that Bill, commence on 1 July 2019, but
do not commence at all if the Levy Bill does not commence.
Background
Domestic
commercial vessels
Domestic commercial vessels are defined in the National
Law Act as vessels that are used in connection with a commercial,
governmental or research activity.[1]
A vessel is not a domestic commercial vessel if it is a regulated Australian
vessel,[2]
a foreign vessel, a defence vessel or owned by a primary or secondary school or
certain other community groups.[3]
Section 15 of the Navigation
Act 2012 defines a regulated Australian vessel as one that is
registered, required to be registered or entitled to be registered under the Shipping
Registration Act 1981 and is not a recreational vessel; domestic
commercial vessels do not include such vessels.
The National Law Act defines a ‘vessel’ as a craft
that can be used in navigation by water and includes an air-cushion vehicle, a
barge, a lighter, a submersible, a ferry in chains and a
wing-in-ground effect aircraft.[4]
According to the then Assistant Minister to the Deputy
Prime Minister, Damian Drum’s second reading speech, there ‘are over 66,000
seafarers employed on 27,000 domestic commercial vessels around Australia’,[5]
including:
- ‘passenger
vessels, such as ferries and scuba diving tour operators
- research
and emergency response vessels, including tugs and barges
- fishing
vessels and
- vessels
that are commercially hired out for recreational use, such as houseboats,
sailboats, jet skis and kayaks.’[6]
Changes to
regulation of domestic commercial vessels
In 2009, the Council of Australian Governments agreed to
major reform in the area of transport regulation, specifically agreeing to
implement national regulatory systems for maritime safety, rail safety and
heavy vehicles.[7]
This agreement gave rise to the Intergovernmental Agreement on Commercial
Vessel Safety Reform that was agreed to by the Commonwealth of Australia and
the various states and territories on 19 August 2011.[8]
This intergovernmental agreement stipulated that the outcomes
of this agreement would include:
- a
national law for all commercial vessels operating in Australian waters and
- a
National Regulator (the Australian Maritime Safety Authority (AMSA)) that
develops, maintains, and monitors national standards for these vessels.[9]
The National Law Act implemented this agreement,
replacing ‘eight federal, state and territory laws with a single regulatory
framework for certification, construction, equipment, design and operation of
domestic commercial vessels inside Australia’s exclusive economic zone (EEZ).’[10]
The National Law is found at Schedule 1 to the National Law Act and the
regulatory system that it implements is known as the National System for
Domestic Commercial Vessel Safety.[11]
The National Law provides for the issuing of certificates of survey and
certificates of operation to domestic commercial vessels and the issuing of
certificates of competency to crew.
Prior to the passage of the National Law Act, domestic
commercial vessels were regulated by the relevant laws in the various states
and territories.
The need for a levy
The intergovernmental agreement of 2011 stipulated that
while the National Regulator would be responsible for the operation and
administration of safety regulation of commercial vessels, the states and
territory would be responsible for ‘service delivery’ in delivering the
National Regulator’s operational and enforcement functions.[12]
In a paper released for consultation, AMSA states that a
2014 review of the National System ‘found that this chosen service-delivery
model limited the potential benefits of the National System due to
inconsistencies in service delivery, regulatory and cost-recovery arrangements
between jurisdictions.’[13]
The Council of Australian Governments’ Transport and Infrastructure Council (TIC)[14]
subsequently agreed in 2014 to AMSA taking full responsibility of service
delivery for domestic commercial vessel regulation under the National System on
a cost recovery basis.[15]
The practical effect of such a change was summarised as
follows in AMSA’s Working Boats magazine:
Currently, even though AMSA is responsible for regulating
domestic commercial vessels (DCVs) across Australia, the way you get your
services — such as certificates and vessel IDs, undertaking surveys and the
fees associated with these services — is not the same around the country. Those
services are currently delivered by each state and territory, which sets its
own procedures and fees for these services.
In November 2014, Commonwealth, State and Territory Transport
and Infrastructure Ministers unanimously agreed that AMSA be positioned to take
up service delivery by July 2017 under the ‘one system, one process and one
decision maker’ principle. From 1 July 2017, not only will the rules and
standards for DCVs be consistent across Australia, but the way you receive
services (and the fees for those services) will also be the same across
Australia, regardless of where you operate.[16]
After originally agreeing that AMSA would take up service
delivery and fully cost recover for providing these services by 1 July 2017,[17]
TIC subsequently agreed in November 2016 to extend this timeframe to 1 July
2018 ‘to allow jurisdictions and industry to better consult and prepare for
these significant changes’.[18]
TIC mentioned in the same communique that AMSA will work
with the states and territories to determine an amount of transition funding to
address the impact of cost recovery raised by industry.[19]
In August 2016, AMSA released a consultation paper seeking feedback on two
proposed models for a levy required to ensure cost recovery; a proportional
levy based on a flat charge per metre of the length of a vessel or a
progressive levy based on a combination of a fixed charge and an incremental
rate per metre based on the length of the vessel.[20]
AMSA originally developed a gradual cost recovery model based on decreasing
levels of subsidy from government each year;[21]
however this model is no longer current after a change in policy announced by
the Deputy Prime Minister in July 2018 (see discussion below).
Context of
current Bill
Industry originally had concerns that ‘the proposed levy
represented an unexpected, significant and immediate increase in costs to
industry.’[22]
In response to this, TIC agreed to provide $102.4 million in funding to support
the industry to transition to the cost recovery arrangements required for AMSA
to take over full service delivery.[23]
TIC’s transition package represented a joint contribution taking into account
the level of cost recovery in each jurisdiction, and originally supported ‘a
gradual increase in levy charges until industry funds around 80 per cent of the
system, with the balance funded by governments.’[24]
The then Minister for Infrastructure and Transport, Darren
Chester, announced that the Federal Government would commit $55 million as part
of this package:
We are committed to the national system delivering safety
benefits for commercial boating, fishing and tourism operations across
Australia, and importantly, the industry remains supportive of a national
system of maritime safety regulation...
Following careful consideration of industry feedback and
year-long negotiations, I have finalised the $102.4 million transition
package with my State and Territory colleagues.
The Australian Government is committing $55 million to
this transition package in recognition of the importance of the domestic
commercial vessel industries to the Australian economy.
Changes to the national system will ensure consistent fees
for vessel services across all Australian jurisdictions, and a cost recovery
levy gradually phased in to allow time for industry to adjust and prepare for
the changes.[25]
In addition TIC originally decided that no levy will be
charged in the first year of AMSA taking over full service delivery ‘to ensure
fair and equitable treatment of all operators as charging arrangements are
standardised and services transition across Australia.’[26]
Significantly, the Deputy Prime Minister then released a
policy statement in July 2018 announcing that the Australian Government would
provide an additional $10 million of funding, thereby providing $65 million
over a period of ten years. This takes the total funding support by all
governments to $112.4 million. Critically, the policy statement also announced
that no levy will be charged to industry for the first three years of AMSA’s
service delivery, with a review of costs and charges to follow in 2020–21:
This additional funding will mean no levy will be charged to
industry for the first three years of AMSA's service delivery to assist all
operators as services transition.
This will provide two more years for AMSA to engage with
industry on a range of important matters including:
-
the most efficient and effective ways to deliver services to industry;
- opportunities to reduce costs to industry without compromising safety;
and
- ways to reduce administrative burden so industry can get on with the job...
... A review of all costs and charges for the national
system will be conducted in 2020–21 and involve wide public consultation.
The review will consider the appropriateness of fees and
charges for the national system in an informed manner, with the benefit of two
years of nationally consistent data on the risk and effort required to
implement the national system.[27]
The details of any levy introduced following this three
year period will be subject to the review mentioned above. Mr Drum stated in
his second reading speech that the new National System with AMSA as the service
provider will provide for ‘a nationally consistent level of service. It will
also reduce barriers for industry, improve labour force mobility, and simplify
vessel transfers across Australia.’[28]
AMSA became the sole service provider under the National System on
1 July 2018, services were provided by state and territory marine safety
agencies until that date.[29]
The Levy Package Bills provide the legislative basis for
AMSA to cost recover once it takes over full service delivery from the states
and territories as the National Regulator for domestic commercial vessels.
Committee
consideration
The Levy Package Bills have been considered by the Senate
Standing Committee for the Scrutiny of Bills and the Parliamentary Joint
Committee on Human Rights. On 10 May 2018, the Senate Standing Committee for
Selection of Bills decided not to refer the Levy Package Bills to a committee.[30]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comments on the Levy Bill or the Consequential Amendments Bill, but did
have some concerns on the Levy Collection Bill.[31]
These concerns are explored further in the ‘Key issues and provisions’ section
of this Bills Digest.
Position of
interest groups
While the Department of Infrastructure and Regional
Development conducted consultation on the exposure draft of the Bills, the
submissions in response to this consultation process do not appear to be
publically available. In addition, the Levy Package Bills have not been
referred to any Committees for consideration at the time of writing this Bills
Digest, so there is a lack of publically available comments on the provisions
of the Levy Package Bills themselves.
However, some information is available on industry’s
thoughts on the concept of a levy itself, arising from responses to AMSA’s 2016
consultation paper.[32]
This consultation paper sought feedback on two proposed levy models to ensure AMSA
can cost recover after taking over service delivery under the National Law
Act. The consultancy firm Seftons assisted AMSA in conducting and reporting
on this consultation process.[33]
A range of industry organisations submitted feedback to
the consultation process, including Maritime Industry Australia Limited, the
Boat Industry Association of Western Australia, the International Institute of
Maritime Surveying and the National Seafood Industry Alliance.[34]
Seftons’ report on the consultation process points to broad opposition to the
idea of a levy, regardless of model:
The proposed full cost recovery approach of the National
System and the two model options prompted highly emotional and mainly very
negative reactions.
While some operators (and industry organisations) expressed
approval of the National System, positive reactions to the levy model were few
and far between. They were voiced by a very small minority and were
overshadowed by overwhelmingly negative feedback and concerns.[35]
Respondents also questioned the lack of subsidisation for
their industry,[36]
and wanted a much longer phase-in time before the levy would take effect.[37]
In response to this consultation process, aspects of the
levy proposal changed, including a significant Government transition package,
an extension of the time before the levy would commence and implementing a
gradual increase in the levy over a longer transition period.[38]
Mr Drum’s second reading speech noted that industry organisations such as the
Tasmanian Seafood Industry Council, the Western Australia Fishing Industry
Council, the Boating Industry Association and the Northern Territory Seafood
Council were supportive of the transition package.[39]
In addition, AMSA has noted on their website how feedback has been taken into
consideration when amending the levy proposal.[40]
The transition package has again changed since the introduction of the Bill
with the Deputy Prime Minister’s policy statement of July 2018 (see discussion
in ‘Background’ section above). However it remains unclear whether the updated
transition package has meant that the broader industry has softened its
previous opposition to the levy.
Financial
implications
The key financial implication of the Levy Package Bills is
the transition funding package of $112.4 million committed by the Commonwealth
and the states and Northern Territory. As discussed in the ‘Background’
section, the Commonwealth Government alone has pledged $65 million. This
transition funding will be provided over a period of ten years.[41]
The Explanatory Memorandum states that the ‘levy will ultimately be AMSA’s
funding source for safety services under the national system’.[42]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Levy Package Bills are compatible as any limitations
on the rights to a fair hearing or the presumption of innocence are reasonable,
necessary and proportionate to the objective of protecting revenue to fund AMSA.[43]
In addition, the Government notes that the Levy Package Bills ‘supports and
protects the right to safe and healthy working conditions for Australia’s
domestic commercial vessel industries.’[44]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights found
that the Levy Bill and the Levy Package Bills did not raise human rights
concerns.[45]
Key issues
and provisions
Levy Bill
Leviable
domestic commercial vessel
Clause 4 of the Levy Bill defines what is
considered a leviable domestic commercial vessel for the purposes
of the Levy Bill. Clause 4 provides the Minister the ability to exempt
particular classes of vessels from the need to pay the levy. Clause 4
effectively means that all other domestic commercial vessels under the National
Law Act are liable to pay the levy unless the Minister has explicitly
exempted them.[46]
The ability for the Minister to exempt certain classes of vessel may become
important if the Government reacts to certain stakeholder feedback on the
concept of a domestic commercial vessel levy. Australian Sailing Limited
submitted for example that all powered vessels owned by community groups should
be exempted from paying the levy due to their belief that recreational
activities provided on a not-for-profit basis should not be subject to a levy.[47]
Requirement
to consult with AMSA and the principle of Cost Recovery
The Levy Bill has multiple provisions that require
consultation or advice to be taken from AMSA. Subclause 4(3) requires
the Minister to consult AMSA when making rules to exempt certain vessels from
the requirement to pay a levy. The amount of the levy itself will have its
basis in rules made by the Minister under subclause 9(2). These rules again
require AMSA to be consulted for advice, under subclause 9(6).
Clause 10 sets out the parameters for the advice that
AMSA must give the Minister when determining the levy amount. Importantly, subclause
10(2) stipulates that, when giving advice regarding the amount of the levy,
AMSA must have regard to the fact that the levy should over time offset
expenditure by AMSA in connection with providing services as the National
Regulator. At the same time, paragraph 10(2)(b) excludes from the calculation
funds from services or activities recovered by charging fees to individuals for
services, such as seafarer certification.
This part of the Levy Bill reflects the central policy
intention of the Government, which is that once AMSA takes over service
delivery from the states and territories under the National System, these
services should be cost recovered. A key element of TIC’s decision to move all
service delivery to AMSA was that appropriate cost recovery arrangements should
be implemented as part of this reform.[48]
The implementation of a levy is also consistent with Australian Government
policy on cost recovery.[49]
As stated by the Department of Infrastructure and Regional Development, citing
the Australian Cost Recovery Guidelines:
AMSA can recover its costs from industry through the
imposition of fees, levies or a combination of both. It is the nature of an
activity that determines which type of charge should be used. Where a product
or service is provided directly to a specific individual or organisation, it is
appropriate to charge a fee to that individual or organisation. A levy is more
appropriate in circumstances where the product or service is provided more
broadly and to the benefit of a wider group.[50]
Legislating that AMSA must have regard to the principle of
cost recovery when providing advice to the Minister maintains this principle of
cost recovery as central to determining any levy amount, while still providing
the Minister with flexibility to deviate from this principle if required.
Transitional
arrangements
As discussed in the ‘Position of interest groups’ section,
the imposition of a cost recovery levy for domestic commercial vessels has been
met with widespread opposition. As outlined above, apart from the concept of a
levy itself, concerns ranged from the lack of a sufficient lead-in time and
concerns at no subsidisation for the industry (although these positions may
have changed following the extension of the lead-in time and the additional
funding pledged by the Government). Media reports have indicated that some
stakeholders expressed concern that an excessive levy may be unsustainable and
force them out of the industry.[51]
Due to these concerns from industry, TIC originally
decided the following:
-
increase the level of government funding over the next ten years
from $10 million to over $100 million, to support industry and ease the
transition to new arrangements and
-
support a gradual increase in levy charges until industry funds
around 80 per cent of the system, with the balance funded by governments.[52]
Subclause 10(4) and subclause 10(5) effectively
provides for this transitional package to be implemented under Ministerial rules
by allowing AMSA to disregard certain amounts of money when providing advice on
what levy amounts will allow for cost recovery (subclause 10(2)(a)) . As
stated in the Levy Bill’s Explanatory Memorandum:
This is a critical mechanism that will allow implementation
of transition funding arrangements announced by the Transport and
Infrastructure Council on 6 December 2017. This mechanism will also allow the
Minister to not charge the levy in the first year and then introduce levy
charges gradually from 1 July 2019 by excluding the amount of government
transition funding from levy calculations in each subsequent year.[53]
Following the Deputy Prime Minister’s policy statement
(discussed above in the ‘Background’ section), this mechanism will allow no
levy to be charged in the first three years and will potentially allow for the gradual
introduction of levy fees after this point. However, the exact nature of the
proposed levy following this three year period will likely be subject to the planned
review in 2020–21 (see ‘Background’ section above). As a result, the above
proposed subclauses will allow for the gradual introduction of the levy if that
is the policy that is ultimately adopted, but does not mandate this to occur.
Incorporation
of material
Section 14 of the Legislation Act
2003 provides that generally only Acts and disallowable
instruments can be incorporated into a legislative instrument, as these pieces
of legislation have been scrutinised by Parliament.[54]
Clause 17 of the Levy Bill allows rules made under the Levy Bill to
apply, adopt or incorporate any matter in any written instrument, including the
National Standard for Commercial Vessels and the Uniform Shipping Laws Code,
despite section 14 of the Legislation Act 2003. The Explanatory
Memorandum justifies this in light of the fact that these written instruments
are ‘longstanding foundational documents which are not subject to change in
future.’[55]
Parliament may wish to consider the appropriateness of this provision, in light
of the comments in the Explanatory Memorandum.
Levy
Collection Bill
Power to seek
or remit a late penalty
Clause 10 provides for a late penalty to be payable
by a person if the levy is not paid by the due date. Subclause 10(3)
specifies that the interest rate of the late penalty will be specified in
legislative rules and must not exceed twenty per cent per annum. Parliament may
wish to consider whether this twenty per cent threshold is an appropriate and
proportionate safeguard to prevent excessive penalties being imposed by the
rules.
Subclause 10(4) gives AMSA the power to remit the
whole or part of a late penalty in certain circumstances, including the extent
to which a person contributed (or not) to the delay, or reasonable steps taken
to mitigate the delay. Under subclause 10(4)(c), AMSA can remit the late
penalty if it is satisfied that there are ‘special circumstances’ that make it
reasonable to remit some or the entirety of the late penalty amount. AMSA must
give written notice of a decision to refuse remittance of a late penalty under subclause
10(7) and such decisions are reviewable by the Administrative Appeals
Tribunal under subclause 10(8).
Notional
payments by the Commonwealth
Clause 15 is a technical provision that notes that
the Parliament’s intention (if the Levy Collection Bill becomes law) is that
Commonwealth entities responsible for domestic commercial vessels should be
liable to pay the levy, despite the fact that ‘the Commonwealth cannot
technically charge itself.’[56]
Subclause 15(2) allows the Finance Minister to give written directions to
give effect to this intention.
Delegation
to AMSA employees
The Senate Standing Committee for the Scrutiny of Bills
expressed some concerns around clause 19 of the Levy Collection Bill in
its Scrutiny Digest.[57]
As explained in the Explanatory Memorandum, ‘AMSA may delegate any power
conferred on AMSA by the Levy Collection Act or legislative rules made under
the Levy Collection Act to members of AMSA’s staff.’[58]
The Senate Standing Committee’s concerns stem from the size of the class of
person and the lack of a limit to the scope of the powers that could be
delegated:
The committee has consistently drawn attention to legislation
that allows the delegation of administrative powers to a relatively large class
of persons, with little or no specificity as to their qualifications or
attributes. Generally, the committee prefers to see a limit set on either the
scope of powers that might be delegated, or on the categories of people to whom
those powers might be delegated.[59]
The Explanatory Memorandum notes that this delegation
power is required for AMSA to operate effectively and to deliver services to
domestic commercial vessels around Australia.[60]
The Explanatory Memorandum also notes that powers are ‘expected to be delegated
appropriately to specific, expert offices within AMSA through an instrument of
delegation signed by AMSA’s Chief Executive Officer.’[61]
Parliament may wish to consider the appropriateness of
this delegation power given the Senate Standing Committee’s concerns and in
light of the explanation provided in the Explanatory Memorandum.
Consequential
Amendments Bill
Expansion
of AMSA’s Powers
Items 8-17 of Schedule 1 provide for consequential
amendments to the National Law Act. Specifically, these clauses expand
existing powers that AMSA has to suspend or revoke certificates of survey or to
detain domestic commercial vessels in circumstances where a levy has not been
paid. Detention of a vessel can be seen as quite a significant action, and
Parliament may wish to consider whether this action is proportionate to the
non-payment of a levy. However, the Explanatory Memorandum notes that the
stronger sanctions exist mainly as a disincentive and are expected to be used
as a ‘last resort’ and only after a ‘show cause’ notice is issued pursuant to
section 72.[62]
In addition, the Explanatory Memorandum states that the Chief Executive
Officer’s delegation instrument is expected to be supported by AMSA governance
policies and processes to ensure powers are exercised appropriately.[63]
The Bill envisages a series of disincentives ranging from a late-payment
penalty to pursuit of the payment through the courts in order to encourage
compliance.[64]
Other provisions
Levy Bill
Imposition
of Levy
Clause 8 provides for the imposition of the levy,
and makes a distinction between a full-year levy that is levied on 1 July in a
financial year and a pro-rata levy if a levy is only applicable for part of a
financial year. Clause 9 provides the formula for calculating this pro-rata
levy.
Clauses 11-14 clarifies the persons who are liable
to pay the levy, effectively tying the requirement to pay the levy to a person
who holds the certificate of survey for the vessel under the National Law
Act and is the sole owner of the vessel. AMSA states that a ‘certificate of
survey is proof that a vessel has been surveyed and meets specified standards
for design, construction, stability and safety equipment that apply to the
vessel as defined in Marine Order 503 (Certificate of survey) 2017.’[65]
The Levy Bill recognises that multiple persons can be
responsible for a vessel and that responsibility for a vessel can be more
complex. Subclause 11(2) provides for joint and several liability where
the holder of a certificate of survey and the owner of the vessel are different
persons. Clauses 12-14 clarify how the levy is payable where a ‘person’
with responsibility for the vessel is a partnership, an unincorporated
association or a trust with multiple trustees.
Clause 6 provides for the Levy Bill to operate
externally to Australia. The Explanatory Memorandum explains that this
provision exists to prevent vessels avoiding their obligations to pay the levy
by leaving Australian waters at the time the levy becomes payable.[66]
Legislative
rules
Subclause 9(2) is a critical provision in the Levy
Bill as it allows for the Minister to create rules prescribing the amount of
the levy. This subclause stipulates that these rules are a legislative
instrument. AMSA had originally published a proposed levy model which involved
a fixed charge on the basis of a vessel’s class, length and area of operation
together with an incremental rate per metre based on the vessel’s length.[67]
Any new proposed levy model will likely be subject to the review to be
conducted in 2020–21 (see ‘Background’ section above).
Clause 16 sets out the disallowance procedure
around these legislative rules, which effectively mirror those of section 42 of
the Legislation
Act 2003 which establishes a comprehensive regime for the
registration, tabling, parliamentary scrutiny and sun-setting (automatic
repeal) of Commonwealth legislative instruments. Subclause 16(5) has the
effect that disallowance operates under the provisions of the National Law Act
rather than those of the Legislation Act.
Generally, as per section 12 of the Legislation Act
2003, a legislative instrument commences at the start of the day it is
registered unless the instrument provides otherwise. However, subclause
16(3) of the Levy Bill provides that the rules will only take effect
on the day immediately after the period when a notice of a disallowance motion
could be given (15 sitting days). This subclause ensures that Parliament has
the opportunity to consider the levy amount before it takes effect; this may be
due to issues caused by having a levy in effect that may subsequently be
disallowed.
Levy
Collection Bill
Mechanics
around levy payment
Clauses 8-9 provide detail around when the
full-year levy and the pro-rata levies are due and clauses 13-14 provide
details around circumstances where an advance on account of a levy is paid and
the potential refund of overpayments by AMSA.
Clause 12 provides for AMSA to make a written
assessment on the amount of levy imposed on a leviable domestic commercial
vessel. This clause links the Levy Bill and the Levy Collection Bill. While
rules under the Levy Bill provide for the amount of levy that domestic
commercial vessels will be subject to, clause 12 in the Levy Collection
Bill enables AMSA to inform the persons liable to pay the levy how much is
owed. Given that levies are variable depending on the type and size of a
vessel, an AMSA assessment would likely be required to determine the amount of levy
owing ahead of payment.
Clause 11 stipulates that an amount of levy owing
or a late penalty owing is considered as a debt to the Commonwealth. This
allows AMSA to recover owing amounts of money through the court system, as
stipulated in subclause 2(c). The Explanatory Memorandum notes
that the courts will be considered by AMSA as a ‘last resort’ option when
attempting to recover these debts.[68]
Legislative
rules
Clause 20 gives the Minister the power to make
legislative rules required or permitted by the Levy Collection Bill or
necessary or convenient to give effect to the Levy Collection Bill. For
example, the rules may provide that the levy can be paid in quarterly
instalments (subclause 8(3)) and that two or more persons can be jointly
and severally liable to pay the levy (subclause 8(5)).
Subclause 20(2)(c) stipulates that the rules do not
impose a tax. The Explanatory Memorandum also clarifies that the levy will be
imposed by the Levy Bill; the Levy Collection Bill and its legislative rules
will ‘perform separate but related legal functions such as prescribing the
amount of levy, or when and how the levy is to be paid.’[69]
Consequential
Amendments Bill
Amendments
to the AMSA Act
Items 1-4 of Schedule 1 make amendments to
the AMSA Act. These clauses amend provisions of the AMSA Act that
regulate the requirements around existing levies that are already paid to AMSA,
including levies under the Marine Navigation
Levy Act 1989 and the Protection of the
Sea (Shipping Levy) Act 1981. These clauses effectively mean
that the levy under the Levy Bill is paid out of the Consolidated Revenue Fund
to AMSA (section 48(2) of the AMSA Act) as the amount of levy is
received, or purportedly received by the Commonwealth (items 1-2 of
Schedule 1). If the levy is refunded, then AMSA has to pay to the
Commonwealth an amount equal to the refund (item 4 of Schedule 1).
Amendments
to the Regulatory Functions (Levy Collection) Act
Items 5-7 of Schedule 1 amend the Regulatory
Functions (Levy Collection) Act. Levies imposed under the Regulatory Functions
(Levy Collection) Act fund maritime safety regulation activities by AMSA:
The levy is a charge against all Australian and
foreign vessels that call at Australian ports. It is used to fund the cost
of safety activities such as ship inspections and surveys. These activities
support and establish the seaworthiness of Australian vessels.[70]
The Consequential Amendments Bill effectively excludes
vessels that are liable to pay a levy under the Levy Bill from the operation of
the Regulatory Functions (Levy Collection) Act. This is because AMSA’s
regulatory services for these vessels will be provided under the National
System, not under another framework.[71]
However, the Explanatory Memorandum clarifies that vessels may still be liable
for the Marine Navigation Levy or the Protection of the Sea Levy in addition to
the levy under the Levy Bill.[72]
Concluding
comments
The Levy Package Bills implement a new levy on domestic
commercial vessels. This levy represents one part of the broader reform aimed
at having AMSA taking over all service delivery from the states and territories
under the National Law Act; effectively the Levy Package Bills will
ensure that these services provided by AMSA are cost recovered once the scheme
is fully implemented. Therefore when considering these Bills, Parliament may
wish to consider not just the effect of the Bills themselves (which is limited
to cost recovery), but the overall policy context and rationale for these
reforms.
[1]. Marine Safety
(Domestic Commercial Vessel) National Law Act 2012, Schedule 1,
section 7.
[2]. For
example an Australian owned commercial ship longer than 24 metres in tonnage
length that may operate on overseas voyages, see Australian Maritime Safety
Authority (AMSA), ‘What
is a regulated Australian vessel?’, AMSA website.
[3]. Ibid.,
Schedule 1, subsection 7(3).
[4]. Ibid.,
Schedule 1, section 8.
[5]. M
Drum, ‘Second
reading speech: Marine Safety (Domestic Commercial Vessel) Levy Bill 2018’,
House of Representatives, Debates, 28 February 2018, p. 2201.
[6]. Ibid.
[7]. Council
of Australian Government (COAG), Communiqué,
COAG Meeting, Darwin, 2 July 2009, p. 8.
[8]. Council
of Australian Governments (COAG), Intergovernmental
Agreement on Commercial Vessel Safety Reform, COAG, n.p., 19 August
2011.
[9]. Ibid.,
p. 5.
[10]. Australian
Maritime Safety Authority (AMSA), ‘Legislation’, AMSA
website, 22 December 2017.
[11]. Australian
Maritime Safety Authority (AMSA), Your
guide to the National System for Domestic Commercial Vessel Safety,
AMSA, Canberra, October 2012, p. 2.
[12]. COAG,
Intergovernmental
Agreement, op. cit., p. 10.
[13]. Australian
Maritime Safety Authority (AMSA), Consultation: cost
recovery for services under the National System for Domestic Commercial Vessel
Safety: August – October 2016, AMSA, Canberra, 2016, p. 7.
[14]. Commonwealth
State and Territory Ministers responsible for transport and infrastructure
issues.
[15]. Ibid.;
see also D Chester (Minister for Infrastructure and Transport), Consultation
on domestic commercial vessels levy, media release, 20 October 2016.
[16]. Australian
Maritime Safety Authority (AMSA), ‘How
will AMSA deliver services from 1 July 2017?’, Working Boats - Autumn
2016, 9, AMSA, Canberra, 2016, p. 3.
[17]. AMSA,
Consultation:
cost recovery, op. cit., p. 7.
[18]. Transport
and Infrastructure Council (TIC), Communiqué,
TIC Meeting, Perth, 4 November 2016, p. 4.
[19]. Ibid.
[20]. AMSA,
Consultation:
cost recovery, op. cit., p. 15; see also D Chester, Consultation
on domestic commercial vessels levy, op. cit.
[21]. Australian
Maritime Safety Authority (AMSA), Domestic
commercial vessels—proposed subsidised cost recovery levy model, AMSA,
Canberra, 19 December 2017.
[22]. Australian
Maritime Safety Authority (AMSA), ‘Consultation
feedback on the national system transition’, AMSA website, 29 March
2018.
[23]. Transport
and Infrastructure Council (TIC), Communiqué,
TIC, n.p., 6 December 2017, p. 1.
[24]. Ibid.
[25]. D
Chester (Minister for Infrastructure and Transport), Certainty
for maritime safety, media release, 6 December 2017.
[26]. TIC,
Communiqué,
6 December 2017, op. cit., p. 1; ibid.
[27]. Department
of Infrastructure, Regional Development and Cities (Infrastructure), ‘Policy
statement by the Deputy Prime Minister on arrangements from 1 July 2018 for the
National System for Domestic Commercial Vessel Safety’, Infrastructure
website, updated 3 July 2018.
[28]. M
Drum, ‘Second
reading speech’, op. cit., p. 2202.
[29]. Australian
Maritime Safety Authority, It’s
business as usual until 1 July 2018, media release, 20 February
2018.
[30]. Senate
Standing Committee for Selection of Bills, Report,
5, 2018, The Senate, 10 May 2018, p. 4.
[31]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 3, 2018, The Senate, 21 March 2018, pp. 19–22.
[32]. AMSA,
Consultation:
cost recovery, op. cit.
[33]. Seftons,
'Australian
Maritime Safety Authority (AMSA) – consultation on cost recovery for services
under the National System for Domestic Commercial Vessel Safety', Seftons
website.
[34]. Seftons,
Australian
Maritime Safety Authority (AMSA) final report: consultation on cost recovery
for services under the National System for Domestic Commercial Vessel Safety,
Tamworth, 1 November 2016, p. 28.
[35]. Ibid.,
p. 4.
[36]. Ibid.
[37]. Ibid.,
p. 25.
[38]. AMSA,
‘Consultation
feedback on the national system transition’, op. cit.
[39]. M
Drum, ‘Second
reading speech’, op. cit., p. 2202.
[40]. AMSA,
‘Consultation
feedback on the national system transition’, op. cit.
[41]. Explanatory
Memorandum, Marine Safety (Domestic Commercial Vessel) Levy Bill 2018,
Marine Safety (Domestic Commercial Vessel) Levy Collection Bill 2018, Marine
Safety (Domestic Commercial Vessel) Levy (Consequential Amendments) Bill 2018
(Levy Package Bills), p. 3.
[42]. Ibid.
[43]. The
Statement of Compatibility with Human Rights can be found at page 4 of the
Explanatory Memorandum to the Levy Package Bills.
[44]. Explanatory
Memorandum, Levy Package Bills, p. 7.
[45]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 3, 2018, Parliament, 27 March 2018, p. 137 and Human
rights scrutiny report, 4, 2018, Parliament, 8 May 2018, p. 1.
[46]. Explanatory
Memorandum, Levy Package Bills, p. 9.
[47]. G
Stanaway, ‘Letter
from Australian Sailing Limited to Allan Schwartz, General Manager of Domestic
Vessels, Australian Maritime Safety Authority’, n.p., 9 October 2016, p. 2.
[48]. Department
of Infrastructure and Regional Government (Infrastructure) and the Australian
Maritime Safety Authority,
2016–17
cost recovery implementation statement draft: National System for Domestic
Commercial Vessel Safety Marine surveyor accreditation, exemptions and equivalent
means of compliance, Infrastructure, Canberra, July 2016, p. 3.
[49]. Ibid.
[50]. Ibid.,
p. 4.
[51]. B
Fitzgerald, 'Commercial fishers say
licensing fee increase could force many out of industry', ABC News, (online edition), 31 August
2016.
[52]. TIC,
Communiqué,
6 December 2017, op. cit., p. 1.
[53]. Explanatory
Memorandum, Levy Package Bills, p. 11.
[54]. Explanatory
Memorandum, Legislative Instruments Bill 2003, p. 10.
[55]. Explanatory
Memorandum, Levy Package Bills, p. 13.
[56]. Ibid.,
p. 15.
[57]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, op. cit., pp. 21–22.
[58]. Explanatory
Memorandum, Levy Package Bills, p. 16.
[59]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, op. cit., p. 21.
[60]. Explanatory
Memorandum, Levy Package Bills, p. 16.
[61]. Ibid.
[62]. Ibid.,
p. 17.
[63]. Ibid.,
p. 18.
[64]. Ibid.,
p. 17.
[65]. Australian
Maritime Safety Authority (AMSA), ‘Certificates
of survey’, AMSA website, 6 March 2018.
[66]. Explanatory
Memorandum, Levy Package Bills, p. 9.
[67]. AMSA, Domestic
commercial vessels—proposed subsidised cost recovery levy model, op.
cit.
[68]. Explanatory
Memorandum, Levy Package Bills, p. 15.
[69]. Ibid.,
p. 16.
[70]. Australian
Maritime Safety Authority (AMSA), ‘Marine
navigation (regulatory functions) levy’, AMSA website,
1 December 2017.
[71]. Explanatory
Memorandum, Levy Package Bills, p. 17.
[72]. Ibid.
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