FT 2021/2 - Explanatory statement
Fuel Tax Act 2006
Explanatory Statement
Issued by the authority of the Minister for Infrastructure, Transport and Regional Development
Fuel Tax Act 2006
Fuel Tax (Road User Charge - Gaseous Fuels) Determination 2021
Heavy vehicles with a gross vehicle mass of more than 4.5 tonnes and used on public roads for business purposes are charged to recover that part of the road construction and maintenance costs that are attributable to heavy vehicles (cost recovery). A portion of the costs are recovered by states and territories through heavy vehicle registration charges and a portion by the Commonwealth through the fuel-based road user charge.
The Fuel Tax Act 2006 (the Act) establishes a mechanism for the collection of the road user charge by reducing the fuel tax credit provided to eligible businesses and non-profit bodies.
Division 41 and 43 of the Act provide that businesses registered or required to be registered for Goods and Services Tax and non-profit bodies are entitled to a partial fuel tax credit for fuel used on a public road for business purposes in registered vehicles with a gross mass of more than 4.5 tonnes. The fuel tax credit claimable is equal to the amount of the effective fuel tax (excise) that is payable on the fuel minus the road user charge.
Subsection 43-10(8) of the Act provides that the Transport Minister may determine, by legislative instrument, the rates of road user charge. The Fuel Tax (Road User Charge-Gaseous Fuels) Determination 2021 (the Determination) sets the rate of road user charge for taxable fuels for which duty is payable at a rate per kilogram of fuel at 35.3 cents per kilogram. -a 2.5 per cent increase to the previous rate in cents per kilogram of fuel. As the rate of road user charge in cents per kilogram is higher than the excise rates for compressed natural gas and liquefied natural gas, the fuel tax credit claimable for those fuels will continue to be zero.
Infrastructure and Transport Ministers have determined that a 2.5 per cent increase to heavy vehicle charges is a measured step towards returning to cost recovery. That is, beginning to return to a level of road user charge that more truly recovers, as intended, the heavy vehicle share of recent government road expenditure.
The Department of Infrastructure, Transport, Regional Development and Communication, on behalf of the Minister for Transport, consulted publicly on the proposed rate increase to 35.3 cents per kilogram from 14 April to 14 June 2021. Industry stakeholders generally supported the increased rate.
The Determination complements the Fuel Tax (Road User Charge) Determination 2021, which increased, by 2.5 per cent, the rate of road user charge for taxable fuels for which duty is payable at a rate per litre of fuel.
The Determination is a legislative instrument for the purposes of the Legislation Act 2003.
Authority: Subsection 43-10(8) of the Fuel Tax Act 2006
Statement of Compatibility with Human RightsPrepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Fuel Tax Act 2006
Fuel Tax (Road User Charge-Gaseous Fuels) Determination 2021
This Disallowable Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Disallowable Legislative InstrumentSubsection 43-10(8) of the Fuel Tax Act 2006 provides that the Transport Minister may determine, by legislative instrument, the rates of road user charge.
In accordance with section 43-10(8) of the Fuel Tax Act 2006, this Disallowable Instrument determines the rate of road user charge that applies to fuels sold in kilograms used on a public road for business purposes in registered vehicles with a gross mass of more than 4.5 tonnes.
Heavy vehicle charges are based on a combination of a fuel-based road user charge, collected by the Commonwealth, and registration charges, which are collected by the states and territories.
Human rights implicationsThis Disallowable Instrument does not engage any of the applicable rights or freedoms.
ConclusionThis Disallowable Instrument is compatible with human rights as it does not raise any human rights issues.
18 June 2021
Michael McCormack
Minister for Infrastructure, Transport and Regional Development
FT 2021/2 - Legislative Determination