Explanatory Memorandum
(Circulated by authority of the acting Minister for Industry, Tourism and Resources, the Honourable Joe Hockey MP)Notes on clauses
ACIS Administration Amendment Bill 2003
1. Clause 1 provides for the Act to be cited as the ACIS Administration Amendment Act 2003.
2. Clause 2 provides for the commencement of the ACIS Administration Amendment Act 2003.
3. Clause 3 provides for the Schedule to the Act, in particular it provides that the Act specified in the Schedule, in this case the ACIS Administration Act 1999 (the Act) is amended or repealed as set out in the Schedule.
Schedule 1 Amendment of the ACIS Administration Act 1999
Item 1 Subsection 4(1) - (Overview of the Act)
4. A very minor amendment necessitated by the renumbering of a section in the Act for the purpose of improving clarity.
Item 2 After subsection 4(1) - (Overview of the Act)
5. This change inserts into the Act a statement that the ACIS assistance program is being extended from its current five year term to include an additional two five year stages.
Item 3 Subsections 4(2) and 4(3) - (Overview of the Act)
6. These subsections, which set out the amount of ACIS assistance to be given to the Australian automotive industry, and the limits on that assistance, are repealed. They are replaced with subsections detailing the new amounts of assistance, the limits on that assistance, and the fact that a new type of assistance will be available, namely assistance for motor vehicle producers undertaking research and development (referred to as type J investment credit). Also included in this item is a minor technical amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 4 Subsection 4(6) - (Overview of the Act)
7. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 5 Subsection 4(7) - (Overview of the Act)
8. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 6 Subsection 4(8) - (Overview of the Act)
9. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 7 Subsection 6(1) - (Definitions)
10. This amendment makes reference to the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 8 Subsection 6(1) - (Definitions)
11. This amendment defines the time period of ACIS Stage 1.
Item 9 Subsection 6(1) - (Definitions)
12. This amendment defines the time period of ACIS Stage 2.
Item 10 Subsection 6(1) - (Definitions)
13. This amendment defines the time period of ACIS Stage 3.
Item 11 Subsection 6(1) (definition of ACIS year ) - (Definitions)
14. This amendment notes that the extended ACIS will cease in 2016.
Item 12 Subsection 6(1) (definition of duty credit ) - (Definitions)
15. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 13 Subsection 6(1) - (Definitions)
16. This amendment results from the fact that, because ACIS will no longer be a single five year program, but rather will consist of three five year stages, the duty credits (the form in which assistance is provided under ACIS) associated with each stage of ACIS will expire one year after the end of each ACIS stage.
Item 14 Subsection 6(1) (definition of final quarter ) - (Definitions)
17. This amendment makes reference to the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 15 Subsection 6(1) (paragraph (b) of the definition of modulated credit ) - (Definitions)
18. In the existing Act the term "modulation" means both: a pro-rata reduction in the value of claims for assistance to ensure that ACIS funding cap is not exceeded; and limiting total ACIS assistance so that no participant receives an amount greater than 5 per cent of total sales in any one year. This amendment repeals a definition of "modulated credit". This amendment is part of a process to reduce confusion by clarifying terminology.
Item 16 Subsection 6(1) (definition of modulated uncapped production credit) - (Definitions)
19. This amendment repeals a definition of "modulated credit". This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 17 Subsection 6(1) - (Definitions)
20. This amendment adds a reference to the Research and Development scheme which will, in ACIS Stage 2, provide a new form of assistance to motor vehicle producers undertaking research and development (referred to as type J investment credit).
Item 18 Subsection 6(1) - (Definitions)
21. A minor amendment adding a reference to the additional type of assistance available in ACIS Stage 2, namely type J investment credit.
Item 19 Subsection 6(1) - (Definitions)
22. A minor amendment adding a reference to the additional type of assistance available in ACIS Stage 2, namely type J investment credit.
Item 20 Subsection 10(1) - (Determination of entitlement to modulated credit between participants)
23. This amendment alters references to "modulated credit". This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 21 Subsection 10(2) - (Determination of entitlement to modulated credit between participants)
24. This amendment alters references to "modulated credit". This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 22 Subsection 40(1) - (Rules concerning returns)
25. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 23 Subsection 40(1) - (Rules concerning returns)
26. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 24 Subsection 40(4) - (Rules concerning returns)
27. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 25 Subsection 41 - (Working out unmodulated credit - Overview)
28. This amendment alters references to "modulated credit". This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 26 Subsection 42(1) - (Secretary to work out unmodulated production credit for each MVP)
29. A minor change clarifying that the Secretary works out the unmodulated uncapped production credit, a form of ACIS assistance, that is to be issued to motor vehicle producers that are participants in ACIS. Also included in this item is an amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 27 Subsection 52(1) - (Overview of Part - Modulation of unmodulated credit)
30. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit. Also included in this item is an amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 28 Subsection 53 - (Stage caps on ACIS)
31. The existing section 53 of the Act, which referred only to the five year ACIS program 2001-05, is repealed because ACIS is being extended to two further five year stages.
32. A new section 53 of the Act, setting out the funding in each of the now three stages of ACIS is inserted into the Act. This new section 53 states that ACIS assistance will be split into separate funding pools in Stages 2 and 3, with one of these pools reserved for motor vehicle producers, and the other reserved for participants in ACIS who are not motor vehicle producers (this division into funding pools is a direct response to representations of industry). The new section 53 also sets out that there will be a Research and Development Scheme available for motor vehicle producers, the funding for which will come from the funding pool reserved for motor vehicle producers. This Research and Development Scheme is the origin of the new type of assistance that will be available in the extended ACIS, namely the type J investment credit referred to earlier.
33. This item also inserts an entirely new provision, section 53A, into the Act. This section is necessitated by the change of ACIS from a single five year scheme, with a single corresponding ledger, into three five year schemes, each with its own corresponding ledger.
Item 29 Subsection 54(1) - (5% of sales limit on participants)
34. These are minor changes clarifying the use of the word "modulated", and inserting a reference to the additional form of assistance that will be available under ACIS (type J investment credit). These changes make it clear that ACIS assistance is provided in respect of a particular year, but not necessarily in that particular year. Also included in this item is a minor technical amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 30 Subsection 54(2) - (5% of sales limit on participants)
35. These are minor changes clarifying the use of the word "modulated", and inserting a reference to the additional form of assistance that will be available under ACIS (type J investment credit). These changes make it clear that ACIS assistance is provided in respect of a particular year, but not necessarily in that particular year. Also included in this item is a minor technical amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 31 Subsections 54(4) - (5% of sales limit on participants)
36. A minor technical adjustment to make the definition of "sales value" given in this subsection accord with the definition given in subsection 6(1) of the Act.
Item 32 Subsections 55(1) - (Minister must make modulation guidelines)
37. This amendment takes account of the fact that ACIS will consist of three stages, and that assistance given under ACIS is adjusted (a process referred to as modulation) with respect to each stage of ACIS.
Item 33 Paragraph 55(1)(a) - (Minister must make modulation guidelines)
38. This amendment alters repeals a reference to unmodulated credit (a form of ACIS assistance). This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
39. The repealed paragraph is replaced with two separate paragraphs; one referring to unmodulated credit for motor vehicle producers in ACIS, and the other referring to unmodulated credit for ACIS participants who are not motor vehicle producers. These two new paragraphs will allow the Minister to modulate (that is adjust) assistance for ACIS participants who are motor vehicle producers differently from assistance for participants who are not motor vehicle producers. This gives the Minister the flexibility to give different sectors of the Australian automotive industry different levels of assistance. This amendment arose from requests from industry.
Item 34 Paragraph 55(1)(c) - (Minister must make modulation guidelines)
40. This amendment repeals a paragraph made superfluous by the amendment in the preceding item.
Item 35 After subsection 55(1) - (Minister must make modulation guidelines)
41. This amendment is necessitated by the amendment under item 33, which allows the Minister to give different sectors of the Australian automotive industry different levels of assistance. This amendment requires the Minister to make guidelines regarding the different levels of assistance, and for the treatment of liabilities that arise as a result of incorrect claims for assistance.
Item 36 Subsection 55(2) - (Minister must make modulation guidelines)
42. This amendment, necessitated by the preceding amendment, requires the funding limits of ACIS to be taken into account in the making of guidelines.
Item 37 Paragraph 55(2)(b) - (Minister must make modulation guidelines)
43. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages, each with its own funding.
Item 38 Subsection 55(3) - (Minister must make modulation guidelines)
44. A purely mechanical change to make reference to the fact that there now will be guidelines issued under two subsections, not just one.
Item 39 Section 56 - (Secretary to modulate capped production credit for each MVP)
45. A technical change repealing the existing section 56 and replacing it with one in which the use of the term "modulated" is clarified.
Item 40 Sections 57 - (Motor vehicle producers credit)
46. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages, each with its own funding.
Item 41 At the end of section 57 - (Secretary to modulate investment credit for each motor vehicle producer)
47. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 42 Section 59 - (Secretary to modulate investment credit for each participant in ACIS that is not a motor vehicle producer)
48. This amendment takes account of the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 43 After Part 5 - (Research and Development Scheme)
49. This amendment inserts a new part into the existing Act which sets out that in ACIS Stage 2 a new type of assistance will be available to motor vehicle producers who are participants in ACIS, namely assistance for undertaking research and development (that is, type J investment credit). The assistance will take the form of a competitive grants Research and Development scheme, the operation of which may be varied over time.
Item 44 Subsection 61(1) - (The ACIS ledger and it maintenance - Overview)
50. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 45 At the end of section 62 - (Establishment and maintenance of ACIS ledger)
51. This amendment takes account of the fact because ACIS will no longer be a single five year program, but rather will consist of three five year stages, there will be three ACIS ledgers - one for each ACIS stage.
Item 46 Section 63 - (Information to be kept in ledger)
52. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 47 Subsection 64(1) - (Entry of credit in the ledger)
53. This amendment is necessitated by the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages, and a new type of assistance will be available in ACIS Stage 2, namely type J investment credit.
Item 48 Subsection 64(2) - (Entry of credit in the ledger)
54. A technical amendment clarifying the process of modulation (see note under item 15).
Item 49 At the end of subsection 64(2) - (Entry of credit in the ledger)
55. This amendment is necessitated by the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 50 Subsection 64(3) - (Entry of credit in the ledger)
56. A technical amendment clarifying the process of modulation (see note under item 15).
Item 51 At the end of subsection 64(3) - (Entry of credit in the ledger)
57. Technical changes necessitated by the fact that ACIS will no longer be a single five year program, but rather will consist of three five year stages, and the need to clarify the process of modulation (see note under item 15).
Item 52 At the end of section 64 - (Entry of credit in the ledger)
58. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 53 Section 65 - (Effect of entering modulated credit in the ledger)
59. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 54 Paragraph 66(aa) - (Circumstances in which the Secretary must amend the ledger)
60. A very minor amendment necessitated by the renumbering of a section in the Act for the purpose of improving clarity.
Item 55 Paragraph 66(e) - (Circumstances in which the Secretary must amend the ledger)
61. This amendment repeals a paragraph for the purpose of replacing it with two new subsections (see next item). This will make it clearer how errors are to be fixed in the ACIS ledger, now that ACIS will no longer be a single five year program, but rather will consist of three five year stages, each with its own ledger.
Item 56 At the end of section 66 - (Circumstances in which the Secretary must amend the ledger)
62. This amendment inserts two additional subsections into the existing Act to make it clear how errors are to be fixed in the ACIS ledger, now that ACIS will no longer be a single five year program, but rather will consist of three five year stages, each with its own ledger. Also included in this item is an amendment clarifying the terminology regarding the limit, set out in section 54 of the Act, concerning the maximum assistance available to an ACIS participant.
Item 57 Subsection 68(1) - (Person may apply to Secretary to fix an error in ledger)
63. This amendment takes account of the fact as ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 58 At the end of subsection 68(2) - (Person may apply to Secretary to fix an error in ledger)
64. This amendment takes account of the fact as ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 59 At the end of section 68 - (Person may apply to Secretary to fix an error in ledger)
65. This amendment takes account of the fact as ACIS will no longer be a single five year program, but rather will consist of three five year stages.
Item 60 Subsection 69(1) - (Electronic access to ledger)
66. This amendment takes account of the fact that, because ACIS will no longer be a single five year program, but rather will consist of three five year stages, the duty credits (the form in which assistance is provided under ACIS) associated with each stage of ACIS will expire one year after the end of each ACIS stage.
Item 61 After subsection 69(1) - (Electronic access to ledger)
67. This amendment takes account of the fact that, because ACIS will no longer be a single five year program, but rather will consist of three five year stages, there will be a ledger associated with each ACIS stage.
Item 62 Subsection 70(2) - (Secretary to notify owner of credit quarterly of changes to ledger)
68. A minor technical alteration to correct a reference in the Act to other sections of the Act.
Item 63 Sections 71 and 72 - (Period in which entries in ledger to be made)
69. This amendment clarifies when the Secretary may amend the ACIS ledger, now that ACIS will no longer be a single five year program, but rather will consist of three five year stages, each with its own ledger. Note that section 72, which stated the self-evident fact that the Secretary was not required to amend the ACIS ledger after ACIS had finished, is redundant and is being repealed and not replaced.
Item 64 Section 74 - (Dealing in and use of duty credit - Overview)
70. This amendment, necessitated by the next item, inserts into the overview of Part 7 a reference to the use of duty credits (the form of assistance provided under ACIS) in the extended ACIS.
Item 65 After Division 1 of Part 7 - (Dealing in and use of duty credit - Overview)
71. The extended ACIS will consist of three stages, not a single five year scheme. To avoid a situation where duty credits (the form of assistance provided under ACIS) which were issued in the first year of ACIS Stage 1 are used to offset import duty paid in the last year of ACIS Stage 3, a situation which would present considerable administrative difficulties, ACIS duty credits will be deemed to expire one calendar year after the ACIS stage in which they are issued.
72. It also should be noted that, for the sake of clarity, section 75A, which deals with when duty credits may be used, is now to be renumbered so that it forms part of section 74A, a section which sets out other details relating to the use of duty credits.
73. A very minor amendment necessitated by the renumbering of the former section 75A in the Act for the purpose of improving clarity (see note under Item 65).
Item 67 Subsection 76(1) - (Minister may limit use of modulated investment credit)
74. This minor amendment makes it clear that a notice issued to limit the use of modulated investment credit remains in force for the period specified in the notice.
Item 68 Paragraph 76(1)(ca) - (Minister may limit use of modulated investment credit)
75. A very minor amendment necessitated by the renumbering of a section in the Act for the purpose of improving clarity.
Item 69 Subsection 77(1) - (Minister may limit use of certain production credit)
76. This minor amendment makes it clear that a notice issued to limit the use of certain production credit remains in force for the period specified in the notice.
Item 70 Paragraph 77(1)(ca) - (Minister may limit use of certain production credit)
77. A very minor amendment necessitated by the renumbering of a section in the Act for the purpose of improving clarity.
Item 71 Paragraph 100(d) - (Order in which credit to be offset)
78. This amendment alters a reference to "modulated" credit. This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 72 At the end of section 100 - (Order in which credit to be offset)
79. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 73 Subsection 109(4) - (Update of business plan)
80. This amendment extends the requirement by ACIS participants to provide business plans. The extended ACIS will consist of three stages, not a single five year scheme, and as assistance is provided under ACIS based on the business plans provided by participants, there is a need to extend the requirement for business plans.
Item 74 Subsection 109(5) - (Update of business plan)
81. This amendment stipulates that the business plans, required by the preceding item, are 5 year plans.
Item 75 Subsection 109(5) - (Update of business plan)
82. The extended ACIS will consist of three stages, not a single five year scheme and this amendment removes the original finishing date for ACIS.
Item 76 After paragraph 111(f) - (Review of decisions affecting duty credit)
83. This amendment adds references to "unmodulated" credit. This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 77 Subparagraph 111(g)(i) - (Review of decisions affecting duty credit)
84. This amendment repeals a reference to "modulated" credit. This amendment is part of a process to reduce confusion by clarifying terminology (see note under item 15).
Item 78 At the end of section 111 - (Review of decisions affecting duty credit)
85. Technical changes to add references to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 79 Paragraph 112(3)(b) - (Limitations on implementation of court decisions concerning duty credit decisions)
86. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 80 Subsection 112(3) - (Limitations on implementation of court decisions concerning duty credit decisions)
87. The current Act states that a court decision awarding additional ACIS funding to a plaintiff cannot be given effect to if all the ACIS funding already has been allocated. The extended ACIS will consist of three stages, not a single five year scheme, consequently the Act will be amended to provide that a court decision awarding additional ACIS funding to a plaintiff cannot be given effect to if all the ACIS funding, in the ACIS stage the court's decision relates to, already has been allocated. Moreover, since duty credits (the form of assistance provided under ACIS) will be deemed to expire one calendar year after the ACIS stage in which they are issued (see note under item 65), a court decision must be made within one calendar year after the ACIS stage it relates to, otherwise the extra assistance the court's decision purports to award to a plaintiff would be in the form of expired duty credits.
Item 81 Paragraph 112(4)(a) - (Limitations on implementation of court decisions concerning duty credit decisions)
88. A minor change clarifying terminology.
Item 82 Paragraphs 112(4)(a) and (b) - (Limitations on implementation of court decisions concerning duty credit decisions)
89. A minor change clarifying terminology.
Item 83 Paragraph 113(3)(b) - (Limitations on implementation of AAT decisions concerning duty credit decisions)
90. A minor amendment adding a reference to the additional type of assistance that is to be available in the extended ACIS, namely type J investment credit.
Item 84 Subsection 113(3) - (Limitations on implementation of Administrative Appeal Tribunal (AAT) decisions concerning duty credit decisions)
91. The current Act states that an AAT decision awarding additional ACIS funding to a plaintiff cannot be given effect to if all the ACIS funding already has been allocated. The extended ACIS will consist of three stages, not a single five year scheme, consequently the Act will be amended to provide that an AAT decision awarding additional ACIS funding to a plaintiff cannot be given effect to if all the ACIS funding, in the ACIS stage the AAT's decision relates to, already has been allocated. Moreover, since duty credits (the form of assistance provided under ACIS) will be deemed to expire one calendar year after the ACIS stage in which they are issued (see note under item 65), an AAT decision must be made within one calendar year after the ACIS stage it relates to, otherwise the extra assistance the AAT's decision purports to award to a plaintiff would be in the form of expired duty credits.
Item 85 Paragraph 113(4)(a) - (Limitations on implementation of AAT decisions concerning duty credit decisions)
92. A minor change clarifying terminology.
Item 86 Paragraphs 113(4)(a) and (b) - (Limitations on implementation of AAT decisions concerning duty credit decisions)
93. A minor change clarifying terminology.
Item 87 After section 115 (Minister may publish information relating to participants)
94. Disclosing how public monies are expended is good public policy. Accordingly this amendment allows the identity of an ACIS participant, and the amount of ACIS assistance they received, to be disclosed by the Minister. These new disclosure requirements apply prospectively only.
95. The extended ACIS will consist of three stages, not a single five year scheme. To avoid placing an administrative burden on participants in ACIS, current participants remain in extended ACIS, unless of course they notify the Secretary that they no longer wish to be part of ACIS, or alternatively they cease to meet the qualifications of an ACIS participant.
Item 89 Modulations made under section 56 of the ACIS Administration Act 1999
96. A savings provision that ensures that the changes made by this amending Act, to the way in which assistance is provided under ACIS, do not invalidate actions taken to provide assistance under the original Act before it was amended.
Item 90 Application of amendments in items 80-85
97. This amendment provides that any plaintiff already seeking redress from a court or the AAT regarding ACIS, may proceed under the legislation as it currently stands. The rationale behind this, is that the original legislation is the legislation they commenced their action under (it should be noted that we are unaware of any ACIS cases currently before the any court or the AAT).
Item 91 Application of amendment in item 86
98. This amendment makes it clear to ACIS participants that from the commencement of ACIS Stage 2 in 2006, the benefits they receive under ACIS may be disclosed by the Minister. This gives ACIS participants sufficient time to adjust to the disclosure requirements.