Bills Digest no. 150 2008–09
Carbon Pollution Reduction Scheme (Charges Customs) Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
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introduced: 14 May
House: House of Representatives
Portfolio: Climate Change and Water
The formal provisions
(sections 1 and 2) will commence on the day of Royal Assent. The
main operative provisions (sections 3 to 8) will commence at the
same time as the operative provisions of the Carbon Pollution
Reduction Scheme Act 2009 commence.
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
To safeguard the constitutional validity of the Carbon Pollution
Reduction Scheme Bill 2009 in respect of the levying of charges for
the issue of Australian emissions units.
Under the Carbon Pollution Reduction Scheme (CPRS), charges may
be payable to the Commonwealth by a person who is issued with an
Australian emissions unit, either as a result of the unit being
auctioned by the Commonwealth, or the Commonwealth selling it at a
Background on the issuing of Australian emissions units can be
found in the Bills Digest on the Carbon Pollution Reduction Scheme
Bill 2009 (the primary Bill).
The Bill, along with the
others in the CPRS package, has been referred to the Senate
Standing Committee on Economics for inquiry and report by 15 June
2009. Details of the inquiry are at
Section 55 of the Commonwealth Constitution states:
Laws imposing taxation shall deal only with the
imposition of taxation, and any provision therein dealing with any
other matter shall be of no effect.
Laws imposing taxation, except laws imposing
duties of customs or of excise, shall deal with one subject of
taxation only; but laws imposing duties of customs shall deal with
duties of customs only, and laws imposing duties of excise shall
deal with duties of excise only.
In Australia, the classic formulation of what is a tax was set
down some 70 years ago by Latham CJ of the High Court of
[a tax] is a compulsory acquisition of money by
a public authority for public purposes, enforceable by law, and is
not a fee for services rendered.
This formulation is not necessarily a legally exhaustive test of
whether in all circumstances a charge is a tax, but as a broad
guide it remains valid.
Part 4 of Division 2 of the primary Bill provides that a charge
may be payable to the Commonwealth for the issue of an Australian
emissions unit. The Government has stated that it does not consider
such a charge is a tax within the meaning of the constitution, and
thus the primary Bill does not impose a tax. However, to avoid any risk of a
contravention of the first paragraph of section 55 above, it has
introduced three separate Bills, along with inserting clause 91 in
the primary Bill.
Clause 91 in the primary Bill provides that if the charge for
the issue of an Australian emissions unit is in fact a tax, then
the charge is not imposed by the primary Bill, but whichever of the
following three Acts are relevant in the circumstances:
- the Carbon Pollution Reduction Scheme (Charges Customs) Act
- the Carbon Pollution Reduction Scheme (Charges Excise) Act
- the Carbon Pollution Reduction Scheme (Charges General) Act
This approach avoids any possibility of the non-taxation
elements of the primary Bill being of no effect under section 55 of
the Constitution. It then safeguards the validity of the primary
Bill, and hence the legislative underpinning of the CPRS.
Clause 4 provides that the State, Territory and
Norfolk Island governments are bound by the Bill, but the
Commonwealth is not. It is unclear why the Bill has been drafted to
exempt the Commonwealth, and neither the second reading speech nor
the Explanatory Memorandum sheds any light on this.
Clauses 5-6A deal with the geographical
coverage of the Bill. It applies in all Australian external
territories, the exclusive economic zone and continental shelf, and
the Timor Sea Joint Petroleum Development Area.
Clause 7 states
that if a charge is payable to the Commonwealth for the issue of an
Australian emissions unit, whether as result of an auction or by a
fixed charge, and that charge is taxation within the meaning of
section 55 of the Constitution, then the charge is imposed by
clause 7, so far as the charge is a customs duty (within the
meaning of section 55).
Clause 8 provides
that the Bill cannot impose a tax upon property of any kind
belonging to a State. This is to ensure that the Bill does not
contravene section 114 of the Constitution, which prevents the
Commonwealth and the States from taxing each other s property.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
2 June 2009
Bills Digest Service
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