Download PASSENGER MOVEMENT CHARGE AMENDMENT BILL 2012

2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PASSENGER MOVEMENT CHARGE AMENDMENT BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Home Affairs,
the Honourable Jason Clare MP)
PASSENGER MOVEMENT CHARGE AMENDMENT BILL 2012
OUTLINE
1. The purpose of this Bill is to amend the Passenger Movement Charge Act 1978
to increase the rate of the passenger movement charge (PMC) from $47 to $55
with effect from 1 July 2012 and to introduce annual indexation of PMC from 1
July 2013.
2. The increase, announced by the Deputy Prime Minister and Treasurer in the
2012-13 Budget, will fund the establishment of the Asia Marketing Fund aimed
at supporting the promotion of Australia to growing markets in Asia as a
premium holiday and business travel destination.
3. Departures of persons from Australia on or after 1 July 2012 will not be subject
to the increase in the rate of the PMC, where that person is using a ticket or
equivalent authority sold or issued before 1 July 2012.
FINANCIAL IMPACT STATEMENT
4. The increase of the existing $47 PMC to $55 and the introduction of indexation
to the PMC is expected to result in an increase in revenue of $610 million over
the four years from 2012-13.
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Passenger Movement Charge Amendment Bill 2012
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
PASSENGER MOVEMENT CHARGE AMENDMENT BILL 2012
This Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Bill will increase the rate of passenger movement charge imposed in respect
of the departure of Australia from $47 to $55 and introduce annual automatic
indexation of passenger movement charge based on movement in the Consumer
Price Index.
Human rights implication
This Bill does not engage any applicable rights or freedoms.
Conclusion
The Bill is compatible with human rights as it does not raise any human rights
issues.
Minister for Home Affairs, the Honourable Jason Clare MP
Passenger Movement Charge Amendment Bill 2012
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PASSENGER MOVEMENT CHARGE AMENDMENT BILL 2012
NOTES ON CLAUSES
Clause 1 – Short title
1. This clause provides for the Bill, when enacted, to be cited as the Passenger
Movement Charge Amendment Act 2012.
Clause 2 - Commencement
2. This clause provides for the Bill to commence on 1 July 2012.
Clause 3 - Schedules
3. This clause is the formal enabling provision for the Schedule to the Bill,
providing that each Act specified in a Schedule is amended in accordance with
the applicable items of the Schedule. In this Bill the Act being amended is the
Passenger Movement Charge Act 1978.
4. The clause also provides that the other items of the Schedules have effect
according to their terms. This is a standard enabling clause for transitional,
savings and application items in amending legislation. In this Bill there is an
application provision in item 2 of Schedule 1.
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Passenger Movement Charge Amendment Bill 2012
Schedule 1 – Amendments
Passenger Movement Charge Act 1978
Item 1 - Section 6
5. This item repeals and substitutes section 6 of the Passenger Movement
Charge Act 1978 (the Act) to increase the rate of passenger movement charge
(PMC) imposed by the Act from $47 to $55 with effect from 1 July 2012 and to
introduce automatic annual indexation to the amount of PMC from 1 July 2013.
Indexation will be based on movements in the Consumer Price Index (CPI).
6. Where a person departs Australia using a ticket or equivalent authority, the rate
of PMC will be based on when the person purchases or is issued the ticket or
relevant authority. In all other cases the rate of PMC will be the rate applicable
at the time the person departs Australia.
7. Section 6 will be replaced by three new sections.
New section 6
8. New section 6 sets out the rate of PMC where a person departs Australia using
a ticket or equivalent authority.
9. Subsection 6(1) sets out the rate of PMC for the financial year beginning on 1
July 2012. It provides that where the person departs Australia using a ticket or
equivalent authority sold or issued in the financial year beginning 1 July 2012,
the rate of PMC will be $55.
10. Indexation, based on the CPI, will apply to PMC annually from 1 July 2013.
Subsection 6(2) sets out the formula to calculate the rate of PMC for a financial
year beginning on or after 1 July 2013. This rate will determine PMC for a
person who departs Australia using a ticket or equivalent authority on or after 1
July 2013.
11. Indexation will occur based on the following formula:
former rate of charge x indexation factor
where the former rate of charge is the PMC for the previous financial year in
respect of a person departing Australia using a ticket or equivalent authority
and the indexation factor is the amount calculated under new section 8.
12. The rate of charge of PMC for a particular financial year becomes the former
rate of charge in the subsequent financial year. The effect of this is that
indexation of PMC is cumulative.
13. The amount of PMC payable by a person will be based on when the person
purchases or is issued the ticket or relevant authority which they use to depart
Australia. For example, where a person departs Australia on 12 July of a
Passenger Movement Charge Amendment Bill 2012
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particular year using a ticket they purchased on 28 February of the same year,
the rate of PMC payable in respect of the departure will be the rate of PMC as
at 28 February when the person purchased the ticket and not the rate as at 12
July when the person departs Australia.
14. New subsection 6(3) clarifies that the amount of PMC calculated under
subsection 6(2) is calculated to 2 decimal places.
New section 7
15. New section 7 sets out the rate of PMC where a person departs Australia
otherwise than using a ticket or equivalent authority. For example, a person
may depart on a private, rather than a commercial, aircraft or ship. The rate of
PMC in this situation will be the applicable rate at the time the person departs
Australia.
16. Subsection 7(1) provides that where a person departs Australia otherwise than
using a ticket or equivalent authority for the financial year beginning on 1 July
2012, the rate of PMC will be $55.
17. Indexation, based on CPI, will apply to PMC annually from 1 July 2013.
Subsection 7(2) sets out the formula to calculate the rate of PMC for a financial
year beginning on or after 1 July 2013 for a person who departs Australia
otherwise than using a ticket or equivalent authority on or after 1 July 2013.
18. Indexation to PMC for a person who departs Australia otherwise than using a
ticket or equivalent authority is calculated in the same way as it is for a person
who departs Australia using a ticket or equivalent authority in new subsection
6(2).
New section 8
19. New section 8 sets out the formula for determining the indexation factor which
is to be used when calculating the rate of PMC under subsections 6(2) and
7(2).
20. New subsection 8(1) provides that the indexation factor is based on a
comparison of the March indexation number for the year indexation is to occur,
and the previous March quarter, not earlier than the March quarter 2012, with
the highest index number.
21. The index number for a quarter is the CPI number published by the Australian
Statistician in relation to that quarter.
22. New subsection 8(3) provides that where the indexation factor is calculated to
be less than or equal to1 it should be increased to 1, and there will be no
change in PMC rate.
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Passenger Movement Charge Amendment Bill 2012
23. The indexation factor that will be used to determine the increase in PMC
adopts a similar calculation method to other taxes and levies that are subject to
indexation.
24. The following example illustrates how indexation is applied to PMC.
Year
CPI Indexation
Number
2012
179.5
2013
184
2014
182
2015
183
2016
186
Assume the CPI index number published by the Australian Statistician for the
2013 March quarter is 184 and the index number published for the 2012 March
quarter is 179.5. The indexation factor is calculated as: 184 ÷ 179.5 = 1.025 at
three decimal places.
The specified rate prior to indexation on 1 July 2013 will be $55. Multiplying this
by the indexation factor gives a result of $56.375. Rounding to two decimal
places, the final rate will be $56.38 to apply from 1 July 2013.
Further, assume that the CPI index number published for the 2014 March
quarter is 182. The factor for 2014 is calculated as: 182 ÷ 184 = 0.989. As this
is less than one, PMC will not change on 1 July 2014.
Further, assume that the CPI index number published for the 2015 March
quarter is 183. The factor for 2015 is based on comparing the 2015 March
quarter with the previous highest March quarter, being March 2013, and
calculated as: 183 ÷ 184 = 0.994. As this is less than one, PMC will not change
on 1 July 2015.
Further, assume that the CPI index number published for the 2016 March
quarter is 186. The factor for 2016 March quarter is based on comparing the
2016 March quarter with the previous highest March quarter, being March
2013, and calculated as: 186 ÷ 184 = 1.011 at three decimal places.
The specified rate prior to indexation on 1 July 2016 will be $56.38. Multiplying
this by the indexation factor gives a result of $57.001. Rounding to two decimal
places, the final rate will be $57.00 to apply from 1 July 2016.
Item 2 – Application
25. This item provides that the above amendments of the Act apply to the
departure of a person from Australia on or after 1 July 2012, unless the person
departs using a ticket or equivalent authority and the ticket or authority was
sold or issued before 1 July 2012.
26. The application clause will ensure that the increase in PMC will not apply to the
departure of a person from Australia on or after 1 July 2012 where the person
departs using a ticket or an equivalent authority and the ticket or authority was
sold or issued before 1 July 2012.
Passenger Movement Charge Amendment Bill 2012
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