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Legislative Assembly for the ACT: 1995 Week 05 Hansard (Tuesday, 22 August 1995) . . Page.. 1250 ..


That this Bill be agreed to in principle.

Mr Speaker, this Bill amends the Business Franchise (Tobacco and Petroleum Products) Act 1984. The Act imposes a licensing regime on wholesalers and retailers of tobacco and petroleum products in the ACT in order to regulate the activities of these industries. The licensing regime requires licensees to pay in advance a licence fee consisting of a basic fee and a franchise fee.

Mr Speaker, in July and early August several of the major tobacco wholesalers engaged in significant discounting of tobacco products in a manner that threatens both the regulatory intent and the revenue provisions of the Act. Franchise fees are determined having regard to the volume of sales occurring in a prior reference month. The provision of free tobacco does not constitute a sale of tobacco and therefore escapes the regulatory and revenue provisions of the Act.

To ensure that all tobacco and petroleum products in the ACT come within the regulatory framework of the Act, the Bill proposes to include products delivered or exchanged for sale in the ACT within the scope of the Act. The Bill also proposes to deem any unlicensed person holding more than a prescribed amount of tobacco products to be a tobacco wholesaler. This is a regulatory measure to ensure that tobacco comes within the scope of the Act, that the person is a fit and proper person to be engaging in the sale of tobacco products and that appropriate fees are paid.

Mr Speaker, the intent of the Act is to impose a franchise fee which is based on the volume of sales of tobacco and petroleum in the Territory. A deficiency in the Act has been identified in relation to tobacco or petroleum which is sold outside the ACT by the holder of an ACT licence but which is intended for delivery or retail in the ACT. Currently, if the seller pays fees to another Territory or State, the ACT cannot require the payment of ACT fees. Although fees in these circumstances have been recovered administratively from the other receiving jurisdictions, this situation is unacceptable as it undermines the regulatory function of the Act and places the collection of ACT revenue beyond the enforcement provisions of ACT tax laws.

An amendment proposed to the Act will deem that, where a wholesale or retail sale of petroleum or tobacco occurs outside the ACT and a condition of that sale is that the petroleum or tobacco is to be delivered into the ACT, then for the purposes of the Act that sale is deemed to have occurred in the ACT and is to be included for the purposes of determining fees under the Act. This provision will mirror similar provisions in New South Wales, Victoria, South Australia, Queensland and the Northern Territory.

It is proposed that the Act be amended to provide that purchases by retailers are not liable for fees where franchise fees have been paid or are payable by the wholesaler to the Territory. This closes a potential anomaly whereby no ACT licence fees may be paid even though the tobacco or petroleum is purchased by an ACT retailer for sale in the ACT. This could arise where a wholesaler holds a licence under the ACT and another jurisdiction's legislation and pays the appropriate fee to that other jurisdiction.

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