Note: This Digest replaces and earlier version dated 13
Bills Digest no. 42 2008–09
Road Charges Legislation Repeal and Amendment Bill 2008
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
Contact officer & copyright details
25 September 2008
Portfolio: Infrastructure, Transport, Regional
Development and Local Government
Sections 1 to 3 on Royal
Assent, Schedules 1 and 2 immediately before Schedule 1 of the
Interstate Road Transport Charge Amendment Act (No. 2) 2008,
Schedule 3 on 1 January 2009.
relevant links to the Bill, Explanatory Memorandum and
second reading speech can be accessed via BillsNet, which is at
When Bills have been passed they can be found at ComLaw, which is
The purpose of the Bill is to:
- repeal the Road Transport Charges (Australian Capital
Territory) Act 1993 (the Road Transport Charges (ACT) Act) to
allow the Australian Capital Territory to pass its own
- repeal certain provisions in the Road Transport Reform
(Heavy Vehicles Registration) Act 1997 to remove references to
the Road Transport Charges (ACT) Act consequent upon its
- amend the Fuel Tax Act 2006 to introduce an increase
to the heavy vehicle road user charge from 19.633 cents a litre to
21 cents a litre of taxable fuel.
The Road Charges Legislation Repeal and
Amendment Bill 2008 includes provisions that were contained in the
Road Transport (Australian Capital Territory) Repeal Bill 2008 that
was introduced into the House of Representatives on 13 March 2008.
Transport Charges (Australian Capital Territory) Repeal Bill
2008 Bills Digest, No.89 2007-08 should be read in conjunction
with this Digest.
In addition to Schedule 1 Repeal of the Road
Transport Charges (Australian Capital Territory) Act 1993 and
Schedule 2 Amendments relating to the repeal of the Road Transport
Charges (Australian Capital Territory) Act 1993 which were
contained in the previous Bill, this Bill contains Schedule 3
Amendment of the Fuel Tax Act 2006. Discussion in this Bills Digest
will focus on the amendments to the Fuel Tax Act 2006.
The 2007 Heavy Vehicle Charges Determination
sets the new registration fees which were unanimously agreed to by
transport ministers at the Australian Transport Council meeting in
February 2008. All
States have now implemented the registration fees with the Northern
Territory in the process of doing so and these fees apply to heavy
vehicles operating in an intrastate context. The Australian Capital Territory cannot
amend its registration fees until this Bill has been passed. The
Commonwealth legislated on behalf of the Australian Capital
Territory when it passed the Road Transport Charges (Australian
Capital Territory) Act 1993. The legislation also served as a
template for the State and Territory jurisdictions to ensure
uniform charging for heavy vehicles throughout Australia. This
approach has now been overtaken by regulations under the
National Transport Commission Act 2003.
Currently the heavy vehicle road user charge
is 19.633 cents per litre of taxable fuel. This rate was determined
by the then Acting Minister for Transport and Regional Services in
2006. Prior to the introduction of this Bill, the Minister had made
a determination to amend the rate of the road user charge on 11
March 2008 stating that the new road user charge of 21 cents per
litre would commence on 1 January 2009. However this determination
was disallowed in the Senate on 14 May 2008.
The amendments in this Bill would increase the
default  road user
charge to 21 cents per litre of taxable fuel, and by doing so
effectively reduce the amount of fuel tax credits that can be
claimed by eligible persons and entities using on-road heavy
vehicles under Chapter 3 of the Fuel Tax Act 2006. Fuel
tax credits are intended to reduce or remove the incidence of fuel
tax across a range of business-related contexts. In order to claim credits for
heavy vehicles use, the vehicle must travel on a public road in the
course of carrying on a business and must have a gross vehicle mass
(GVM) of greater than 4.5 tonne. If it uses diesel, it must meet
one of the environmental criteria for heavy diesel vehicles
manufactured before 1 January 1996.
The full fuel credit rate is currently 38.143
cents per litre, but for heavy vehicles travelling on a public
road, the road user charge is subtracted from the credit. Thus
under the proposed increased road user charge, the effective
fuel tax credit is reduced from 18.51 centres per litre to
17.143 cents per litre.
The amendments also provide that regulations
may prescribe a method of indexing the road user charge, that is,
making adjustments to the road user charge.
According to the Explanatory Memorandum, the
increase to the road user charge of 1.367 cents per litre will
decrease Commonwealth Government Fuel Tax Credit expenses
- $40 million in 2008-09
- $110 million in 2009-10
- $150 million in 2010-11
- $190 million in 2011-12.
1 and 2 of the Road Charges Legislation
Repeal and Amendment Bill 2008 are identical to the first Bill, the
Road Transport Charges (Australian Capital Territory) Repeal Bill
2008. For discussion of these provisions see the Bills Digest,
Transport Charges (Australian Capital Territory) Repeal Bill
2008 Bills Digest, No.89 2007-08.
Schedule 3 Amendment of the Fuel Tax
Item 1 amends existing
subsection 43-10(3) by substituting the reference to a
determination by the Transport Minister to the road user charge
for the fuel which will be contained in the principal Act.
Item 4, proposed subsection
43-10(7) provides a definition of road user charge for
taxable fuel and sets a rate of 21 cents for each litre of fuel,
unless otherwise prescribed by regulations. Proposed
subsection 43-10(8) provides that the regulations may
prescribe a method for the road user charge to be indexed or
Item 9, is an applications
provision which states that these provisions will apply to taxable
fuel on or after 1 January 2009.
14 October 2008
Bills Digest Service
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