Bills Digest 157 1996-97
Commonwealth Vehicles (Registration and Exemption from Taxation) Bill
1997
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
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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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