Page 3876 - Week 12 - Thursday, 23 November 2006
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
After consulting with utility companies, the government proposes to use its existing taxation infrastructure to collect the new charge on network facilities. The charge is designed to be applied as a tax on ownership. This is because the charge can be applied with less administrative burden for the utilities, rather than through a more complex permit system. In particular, it will remove the burden on utilities of separately identifying and measuring that part of the network which is on unleased land.
The application of this new charge will be more comprehensive than similar charges imposed elsewhere by including all utilities—electricity, gas, water, sewerage and telecommunications. However, there are precedents for governments imposing charges on network infrastructure. For example, in Victoria land tax has applied since 2004 on electricity transmission easements held by electricity transmission companies.
The bill makes the charge payable by owners of utility networks as defined under the Utilities Act 2000 and the Utilities (Electricity Transmission) Regulation and the Telecommunications Act. The bill makes the tax payable on the route length of networks and at a rate to be determined under the Taxation Administration Act of 1999. The Commissioner for Revenue will have the opportunity to approve the appropriate methodology for determining network lengths. This will provide some flexibility for network owners in establishing the route length without undue compliance burden.
The government recognises that the network charge may be passed on to customers. The full extent and timing of this effect will be determined by the pricing strategies of the utilities and by price determinations by the relevant regulators. In the short term the government estimates that the full-year impact on an average utility customer connected to all network services will be around $94, or $1.80 a week.
In the longer term, and only if the charges are fully passed through to customers, the average impact across all customers would be $137, or $2.63 a week. Differential amounts are likely to be applied to residential and large commercial customers. In any case, under current price determinations it is unlikely that this full impact would occur until at least 2009.
The government has recognised the need to reduce the impact on pensioners and Department of Veterans’ Affairs gold card holders. Consequently, the government will be increasing the funding for pensioner rebates on energy, water and sewerage bills.
Finally, this bill amends the Taxation Administration Act 1999 to include the Utilities (Network Facilities) Act 2006 as a tax law and thus subject to the provisions and support of ACT taxation legislation. I table the exposure draft of the Utilities (Network Facilities Tax) Bill for the consideration of the Assembly. In doing so, I will be making available Treasury officers to brief members as they wish.
Mr Mulcahy: Could I ask the Chief Minister if he would not mind tabling his speaking notes so we can have a look at them.
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .