Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill will make amendments to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 (Levies Act) that are made necessary by amendments contained in the Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Measures) Bill 2014 (Miscellaneous Measures Bill). That bill expands the geographical scope of the definition of 'designated coastal waters' in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act).

The effect of those amendments in the Miscellaneous Measures Bill is to permit the states and the Northern Territory to confer particular functions and powers upon the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) in respect of all of the waters of the sea that are on the landward side of the Commonwealth offshore area.

NOPSEMA operates on a fully cost recovered basis through fees and levies payable by the offshore petroleum industry. The levies act at present facilitates cost recovery, by imposing levies in respect of regulatory activities conducted by NOPSEMA in Commonwealth waters, as well as in designated coastal waters of states and the Northern Territory where functions and powers have been conferred by state and Northern Territory law.

Under the levies act, 'designated coastal waters' is defined to have the same meaning as within the OPGGS Act. Expanding the geographic coverage of the designated coastal waters under the OPGGS Act would therefore consequently extend the area in respect of which levies are potentially imposed.

Legal advice obtained by our department indicated that this consequential expansion of the application of the levies act will create a medium to high level of risk of constitutional invalidity, as it would potentially result in the imposition of a tax that discriminates between states or parts of states on the basis of geographic location. This bill therefore amends the levies act to limit the operation of the levy regime to the area constituted by the existing definition of designated coastal waters. In other words, the levies act will continue to apply in the same area that it currently does, and not to the expanded area of designated coastal waters.

The effect of these amendments will be that NOPSEMA will not recover costs associated with regulatory functions performed in waters that do not fall within the existing definition of 'designated coastal waters' by way of levies imposed under the levies act.

I note that, given the lack of current activity in these waters, this is unlikely to have a significant impact in the near future. The Commonwealth will bring forward alternative options to ensure that NOPSEMA will be able to fully recover costs associated with the performance of regulatory functions conferred by a state or the Northern Territory.

Debate adjourned.