WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Commonwealth Vehicles (Registration and Exemption from
Taxation) Bill 1997
Date Introduced: 28 May 1997
House: House of Representatives
Portfolio: Finance
Commencement: Royal Assent
The purpose of this Bill is to:
- establish a Commonwealth register of motor vehicles in which
vehicles owned by or leased to the Commonwealth may be
registered
- exempt the transfer of DASFLEET assets and Commonwealth leasing
arrangements from State and Territory taxes.
DASFLEET is the Federal Government's vehicle leasing and rental
business operating within the Department of Administrative Services
which supplies passenger and commercial vehicles to the majority of
Commonwealth Government departments and agencies.The fleet
comprises 17,027 vehicles.(1)
DASFLEET's primary market is the Commonwealth
Government.Services are provided on a commercial basis.Departments
and agencies operating on the Commonwealth Public Account are
required to lease civilian vehicles from DASFLEET but are free to
use private sector operators for their short-term rentals and fleet
management and maintenance requirements.(2)
The Labor government announced in the 1995 96 that it intended
to sell and lease-back DASFLEET's motor vehicle fleet.(3)
In March 1996, the Coalition government announced a review of
the 1995 Budget measure to sell and lease back vehicles managed by
DASFLEET.(4) Management and financial consultants, Baring Brothers
Burrows and Company Limited were engaged to undertake the
review.The consultants were also asked to consider:
- the past and likely future financial performance of
DASFLEET
- government policy on privatisation and contracting out,
and
- the directions set by the National Competition Policy Review
(Hilmer Report) and the draft Industry Commission Report on
Competitive Tendering and Contracting Out.
The 1996 97 budget stated:(5)
The review recommended the investment in DASFLEET should be
realised by either sale of DASFLEET or refinancing of the
vehicles.The Government has accepted this recommendation and will
call expressions of interest in both options concurrently in an
effort to maximise the value from DASFLEET.
On 27 February 1997, advertisements appeared in all national
newspapers inviting registration of interest in purchasing 6 DAS
business enterprises and purchasing or refinancing DASFLEET.(6)
On 13 May 1997, the Minister for Administrative Services
provided an update ON the sale process for each business.In respect
of DASFLEET, the update provided:(7)
27 Feb Call for registration of interest
12 March Closing date for registering interest - Australian
responses
21 March Closing date for registering interest - overseas
responses
21 April Closing date for submitting indicative bids
30 April Due diligence begins
23 May Closing date for final bids
Following the closing of bids, these will be evaluated and a
preferred tenderer/refinancier selected.The transaction is expected
to conclude in mid 1997.
A DAS spokesperson has commented that eighty per cent of jobs
will be retained by the private sector upon the sale of each
business enterprise.(8) It is unclear how many, if any, of the 375
DASFLEET jobs will be affected if the fleet is refinanced as
opposed to being sold.
DASFLEET's operating revenue and net operating profit over the
past four years were:
|
1992 93
$ |
$1993 94
$ |
1994 95
$ |
1995 96
$ |
| Operating Revenue |
130,191 |
143,943 |
136,487 |
138,302 |
| Net Operating Profit |
43,999 |
56,909 |
29,372 |
23,103 |
The Commonwealth currently pays registration fees to the
respective State or Territory in which its vehicles are
registered.The Commonwealth does not pay registration fees in
respect of vehicles which are registered as Commonwealth vehicles,
e.g. 'Z plated' vehicles.The Commonwealth does not pay stamp duty
on the purchase or registration of vehicles.
Part 1 of the Bill is the preliminary part
which contains definitions and objects.
Part 2 of the Bill provides for the creation of
a register of Commonwealth vehicles (including motor vehicles and
trailers).Vehicles may only be registered as Commonwealth vehicles
where they are owned or leased by the Commonwealth or a
Commonwealth authority for at least three months (clause
8).
Digest Comment:The terms of the Bill do not compel
registration of Commonwealth vehicles under this register.Vehicles
such as those provided to Commonwealth senior executive servants
will continue to be registered in the respective State in which
they are provided and the Commonwealth will continue to pay
standard State registration fees on the registration of those
vehicles.
There is currently a register of Commonwealth vehicles which
was established administratively.It is necessary to establish the
register legislatively because of the proposed split in functions
between registration and ownership of vehicles.
Upon the Commonwealth or the authority ceasing to own or lease
the vehicle, its registration ceases (clause
11).
Vehicles which are registered as Commonwealth vehicles are not
required to be registered under the law of a State or
Territory.
Part 3 of the Bill exempts from State and
Territory taxation:
- the sale of vehicle fleet or a major part of it
- the lease of a vehicle for more than 3 months
- the registration of a vehicle leased to the Commonwealth.
Part 4 of the Bill contains a general
regulation making power.
- Information provided by DASFLEET, current at 30 March
1997.
- Department of Administrative Services, Annual Report 1995 96,
p. 50
- House of Representatives, Hansard, 9 May 1995, p. 68
- Minister for Administrative Services (David Jull), 'Government
vehicle fleet to be reviewed', Press release, 29 March 1996
- 1995 96 Budget Paper 3, 20 August 1996, p. 3 68
- The six DAS businesses were:
- Asset Services - maintenance and repairs, minor property
improvement and professional technical advice on facilities and
related equipment
- Australian Operational Support Services - prime contractor for
facilities support services and the Sydney Airport Noise Insulation
Project
- DAS Centre for Environmental Management - management of ozone
depleting substances such as halon and CFC (Halon Bank) and
environmental consulting services
- DAS Distribution: domestic freight, international freight and
warehousing and distribution
- DAS Interiors Australia: Strategic advice and planning for
accommodation, design/documentation and supervision of office
fitout and high-tech engineering services
- Works Australia - project and program management, architectural
and engineering design and documentation services
- Minister for Administrative Services (David Jull), 'Continued
reform of DAS commercial operations', Press release, 13 May
1997
- Peter Clack, 'The last day of DAS: 4000 jobs to go', The
Canberra Times, 12 March 1997
Lee Jones
19 June 1996
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1328-8091
© Commonwealth of Australia 1997
Except to the extent of the uses permitted under the
Copyright Act 1968, no part of this publication may be
reproduced or transmitted in any form or by any means, including
information storage and retrieval systems, without the prior
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of the Australian Parliament in the course of their official
duties.
Published by the Department of the Parliamentary Library,
1997.
This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 9 July 1997
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