Details of the Financial Management and Accountability Amendment (2014 Measures No. 5) Regulation 2014

 

Section 1 - Name of Regulation

 

This section provides that the title of the Regulation is the Financial Management and Accountability Amendment (2014 Measures No. 5) Regulation 2014.

 

Section 2 - Commencement

 

This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments. 

 

Section 3 - Authority

 

This section provides that the Regulation is made under the Financial Management and Accountability Act 1997 (FMA Act).

 

Section 4 - Schedule(s)

 

This section provides that the Financial Management and Accountability Regulations 1997 is amended as set out in Schedule 1 to the Regulation.

 

Schedule 1 - Amendments

 

Item 1 - Part 4 of Schedule 1AB (at the end of the table)

 

This item adds one item to this Part to establish legislative authority for the Commonwealth Government to provide assistance for transition to the new regime for delivery of certain public interest telecommunications services, to be administered by the Department of Communications.

 

New table item 12 establishes legislative authority for the Commonwealth Government to provide financial assistance to telecommunications carriers to assist with the transition to the new contractual regime for the delivery of public interest telecommunication services under the Telecommunications Universal Service Management Agency Act 2012 (TUSMA Act). 

 

The TUSMA Act established, in part, the Telecommunications Universal Service Management Agency (TUSMA) and Telecommunications Industry Levy.  This levy replaced the Universal Service Obligation (USO) and National Relay Service (NRS) levies, previously contained in the Telecommunications (Consumer Protection and Service Standards) Act 1999. 

 

The Telecommunications Industry Levy is payable by certain telecommunications carriers and substantially replicates the eligible revenue principles used to assess contributions under the two former schemes. 

 

Due to TUSMA's responsibility for ensuring the delivery of a range of public interest telecommunication services in addition to the USO and NRS, amounts to be collected from industry through the new levy scheme will be greater than under the previous levy arrangements.

 

As part of the transition to the new contractual regime, the previous government decided that for the 2012-13 and 2013-14 financial years, levy payments for carriers other than the primary universal service provider (the PUSP) will be capped at their aggregate contribution for the final year of the previous USO and NRS levies (i.e., at the amounts paid in relation to the 2011-12 financial year).  This commitment was outlined in the Universal Service Policy in the National Broadband Network Environment Policy Statement (the USO Policy Statement), released on 23 June 2011. 

 

The program will be administered as a non-competitive grants program in the 2013-14 financial year only.  The grant funding is to be provided to any person, with the exception of the PUSP, that is a 'participating person', as defined in section 92 of the TUSMA Act, for the first eligible levy period under the TUSMA Act.  A 'participating person' is effectively a carrier with eligible revenue of $25 million or more in a financial year.  The funding is not available to the PUSP, even though it is a participating person, because of separate contractual arrangements that the government has entered into with the PUSP, which allows for the transition to a contractual regime for the delivery of the public telecommunication services.  Decisions relating to financial assistance made under section 96 of the TUSMA Act are of an administrative character and may therefore be subject to review in accordance with the provisions of the Administrative Decisions (Judicial Review) Act 1977.

 

Funding equivalent to the total amount of grants to be provided has been appropriated to TUSMA as described in the Table 1.1 of the Portfolio Budget Statements 2013-14, Budget Related Paper No. 1.3, Broadband, Communications and the Digital Economy Portfolio at page 152.

 

Statement of Compatibility with Human Rights

Prepared in accordance with part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Management and Accountability Amendment (2014 Measures No. 5) Regulation 2014

 

This Regulation 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 Legislative Instrument

 

The Financial Management and Accountability Act 1997 (the FMA Act) provides a framework of rules for the proper management of public money and public property by Chief Executives and officials of FMA Act agencies.  The FMA Act applies to Commonwealth Departments of State and their staff, parliamentary departments and their staff, and prescribed agencies. 

 

Section 32B of the FMA Act establishes legislative authority for the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Management and Accountability Regulations 1997 (FMA Regulations) and to make, vary and administer arrangements and grants for the purposes of programmes specified in the FMA Regulations.  This is in response to the High Court's decision in Williams v Commonwealth (2012) 288 ALR 410.  Schedule 1AA and Schedule 1AB to the FMA Regulations specify the arrangements, grants and programmes. 

 

The Regulation amends the FMA Regulations to establish legislative authority in Schedule 1AB for the Commonwealth Government to provide financial assistance to telecommunications carriers to assist with the transition to the new contractual regime for the delivery of public interest telecommunication services under the Telecommunications Universal Service Management Agency Act 2012 (TUSMA Act). 

 

The program would be administered as a non-competitive grants program in the 2013-14 financial year only.  The grant funding would be provided to any person, with the exception of the primary universal service provider (PUSP), that is a 'participating person', as defined in section 92 of the TUSMA Act, for the first eligible levy period under the TUSMA Act.  The funding is not available to the PUSP, even though it is a participating person, because of separate contractual arrangements that the government has entered into with the PUSP, which allows for the transition to a contractual regime for the delivery of the public telecommunication services.

 

Under the program, grants would be made by reducing each eligible participating person's levy amounts owing for 2013-14 in proportion to their share of eligible revenue earned during the 2012-13 financial year.  This would ensure that the commitment made by the previous government to cap the Telecommunications Industry Levy contribution for certain carriers could be fulfilled for the 2013-14 financial year. The Department of Communications will administer the program.

 

The item specified in Schedule 1AB is the responsibility of the relevant Minister who has portfolio responsibility for the matter.

 

 

Human rights implications

 

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This regulation is compatible with human rights as it does not raise any human rights issues.

 

 

Senator the Hon Mathias Cormann

Minister for Finance