1999

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

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STEVEDORING LEVY (COLLECTION) AMENDMENT BILL 1999
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EXPLANATORY MEMORANDUM

(Circulated with the authority of the Minister for Transport and Regional Services the Honourable John Anderson MP)

ISBN:  0642 403368

STEVEDORING LEVY (COLLECTION) AMENDMENT BILL 1999

OUTLINE

The Stevedoring Levy (Collection) Act 1998 (the Act) commenced in July 1998.  

The Act provides for a levy on certain stevedoring operations, namely the loading and unloading of containers and vehicles.  The purpose of the levy is to meet the cost of payments under section 18 of the Act.  The Act underpinned the administrative arrangements introduced by the Government to facilitate waterfront reform.

The Bill increases the amount under section 18 of the Act that may be authorised by the Minister, in connection with stevedoring industry reform.

FINANCIAL IMPACT STATEMENT

The amendment increases the amount that may be authorised by the Minister in connection with stevedoring industry reform from $250 million to $350 million.  This will require the levy imposed by the Stevedoring Levy (Imposition) Act 1998 to stay in place for a longer period to repay appropriations authorised under section 18 of the Act. 

REGULATION IMPACT STATEMENT

BACKGROUND

The Government introduced legislation in April 1999, which upon receiving Royal Assent became the Stevedoring Levy (Collection) Act 1998 (the Act).  The Act underpinned the administrative arrangements introduced by the Government to facilitate waterfront reform.

The Act provides for collection of a levy on certain stevedoring operations, namely the movement of containers and vehicles.  The Act operates in conjunction with the Stevedoring Levy (Imposition) Act 1998 under whose terms the levy is imposed.  The levy is imposed on the loading and unloading of containers and vehicles and is paid by stevedoring companies.

The Stevedoring Levy (Imposition) Act 1998 provides that the rate of levy is $20 per container and $10 per vehicle or a lower rate if prescribed by the regulations.  The rate of levy has been lowered by regulation and is currently $12 for containers and $6 for vehicles.  The first levy collection month was February 1999, with the first levy remittances received in March 1999.

The rate of levy was determined in consultation with the major stevedoring companies.  The major stevedoring companies have agreed not to pass the cost of a levy imposed at the rate of $12 per container and $10 per vehicle, onto their customers.

The levy is used to recover from the industry amounts that the Minister may authorise under section 18 of the Act. 

A.	PROBLEM IDENTIFICATION

The Government is actively seeking to encourage reform in the Australian stevedoring industry with the aim of achieving work best practice in relation to productivity and reliability in cargo stevedoring and to realise the associated national economic benefits.

The Government has encouraged stevedoring employers to introduce changes that reform work practices, which are inhibiting the stevedoring company’ ability to achieve internationally competitive levels of productivity and reliability and manage the rationalisation of their labour force resulting from the necessary restructuring of operations.  

The Act provides that no more than $250 million may be authorised for stevedoring industry reforms under section 18.  At the time the Government believed that this would provide sufficient funds to meet the costs arising from the implementation of reform and restructuring in the stevedoring industry, in particular the cost of redundancies.  However, the estimated number and cost of redundancies is greater than anticipated.  Therefore, the Government is seeking to ensure that it is able to authorise funding to meet the total expected cost of redundancies and ensure that sufficient funds are available for other worthwhile reforms and to meet the administrative costs associated with collection of the levy.

Specification of Regulatory Objectives 

The objective is to ensure that the Government is able to meet the cost of all eligible redundancies and that the Government has sufficient funds available to assist stevedoring companies implement non redundancy related reforms and meet the administrative costs associated with collection of the levy.  A further objective is to ensure that the cost of reform in the stevedoring industry is met by the industry and not the taxpayer.  This philosophy underpinned the original legislation and the Government remains committed to encouraging reform in the stevedoring industry funded by the industry not the taxpayer.

B.	IDENTIFICATION OF ALTERNATIVES

The Government considered a number of options when it became clear that the total cost of redundancies would be higher than anticipated.  The Government determined that the only option, which satisfied all its objectives, was the option to increase of the appropriation with the Act. 

The amendment proposed will involve increasing the existing appropriation from $250 million to $350 million.

C	IMPACT ANALYSIS

Assessment of costs

Government:

The levy will need to stay in place for a longer period to repay appropriations authorised under section 18 of the Act.  It is anticipated that the period over which levy will be collected will be extended by approximately three years. 

Stevedoring companies and shippers:

The major stevedoring companies have made a commitment to absorb the cost of the levy at the rate it is currently imposed.  The Australian Competition and Consumer Commission (ACCC) will report to the Government on the extent to which the stevedoring companies are honouring their commitment.  The increased appropriation requires the stevedores to absorb the direct cost of the actual levy payments over a longer period, approximately three years.  There are no additional costs for shippers.

Assessment of benefits

The Government considers that amending the Act to increase the appropriation is necessary to ensure that it can fulfil its commitments with respect to waterfront reform.  Increasing the appropriation allows assistance for reform and restructuring in the stevedoring industry to be provided at no cost to the taxpayer.

The increased appropriation would ensure that the Government is able to meet the higher than expected cost redundancies, while also being able to provide funding to those stevedores seeking to introduce non redundancy related reforms.  Finally, the increased appropriation would ensure that the Government can meet the levy collection administrative costs from the appropriation.

D	OTHER REQUIREMENTS:	CONSULTATION 

The proposal to increase the appropriation has been developed within the Budget framework.

E	IMPLEMENTATION AND REVEIW 

The recommended approach will be implemented via the proposed amendment to subsection 18(2) of the Act, increasing the amount the Minister may authorise under from $250 million to $350 million.  

It remains the Government’s intention that after all funds authorised with respect to section 18 have been recovered that the levy will cease.

The Act does not include a “sunset” date by which time the levy must be terminated.  

The Government is committed to reviewing the levy legislation and the levy rate within three years of the commencement of the Act.

NOTES ON CLAUSES

Clause 1 – Short Title

The short title of the Act is to be the Stevedoring Levy (Collection) Amendment Act 1999.

Clause 2 – Commencement

The Act will commence on the day it receives Royal Assent.

Clause 3 – Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule.

Schedule 1 – Amendment of the Stevedoring Levy (Collection) Act 1998

Items 1 – Subsection 18(2)

The Stevedoring levy (Collection) Act is amended by omitting “$250 million” and substituting “$350 million”.