UPDATE: New Levy for all Domestic Commercial Vessels

UPDATE: New Levy for all Domestic Commercial Vessels

UPDATE: New Fees Proposed for Commercial Kayak/Canoe Operators

Posted on 24.04.2018

For owners and operators of unpowered hire and drive vessels

Despite previous indications, Maritime Safety is now proposing to levy all commercially used vessels including kayaks, canoes and other small craft used for hire or drive. The fees proposed are not insignificant and have the potential to impact both education and tourism operators alike.

ACT NOW

The Department is calling for submissions on the draft proposal and it is VITAL that all operators put in a submission by Monday 30 April 2018.

The department prefers to receive electronic copies of comments and submissions in either PDF or Microsoft Word format. Please email submissions to: nmsr@infrastructure.gov.au.

Alternatively, submissions can be posted to:

Domestic Commercial Vessel Levy Consultation
Maritime and Shipping Branch
Department of Infrastructure, Regional Development and Cities
GPO Box 594
CANBERRA CITY ACT 2601

Please note that we must act swiftly as these changes are planned to take effect on 1st July 2018.

QORF's Submission

Click LINK below to read QORF’s submission on the draft Marine Safety (Domestic Commercial Vessel) Levy legislative instruments.

We encourage all members and others who are likely to be affected to put in a submission as soon as possible.

Note: please do NOT simply copy QORF’s submission as your own – duplicate submissions are likely to discounted by the AMSA.

QORF Domestic Commercial Vessel Levy Submission

Domestic Commercial Vessel Levy Consultation
Maritime and Shipping Branch
Department of Infrastructure, Regional Development and Cities
GPO Box 594
CANBERRA CITY ACT 2601

Email – nmsr@infrastructure.gov.au

26th April 2018

Dear sir/madam,

Consultation on exposure draft of Marine Safety (Domestic Commercial Vessel) Levy legislative instruments

QORF (the Queensland Outdoor Recreation Federation) is writing to provide input on AMSA’s Consultation on exposure draft of Marine Safety (Domestic Commercial Vessel) Levy legislative instruments.

QORF is the peak body representing the interests of the outdoor community in Queensland. QORF has over 190 members, consisting of a range of outdoor industry stakeholders, including local governments, schools with an outdoor education focus, commercial operators and community organisations including Canoeing Queensland, Girl Guides Queensland, Scouts Queensland, and local/regional outdoor recreation bodies.

QORF’s mission is to raise the profile, develop the capacity, and increase opportunities for outdoor recreation in Queensland.

Your website states that “the purpose of this consultation is intended to provide sufficient time for industry to review levy charges and fees and to support parliamentary debate of the related Marine Safety (Domestic Commercial Vessel) Levy Bills, which were introduced into Parliament on 28 February 2018.” [emphasis added] However, little or no consultation has been carried out with peak bodies who represent the interests of the outdoor community.

We became aware of the proposed removal of the exemption from the payment of annual levies for class 4 vessels through an email dated Friday 20th April 2018 – that email advised that the closing date for submissions was Monday 30th April 2018. This is not considered sufficient time for industry to review levy charges and fees.

The opening paragraph of the email dated 20th April 2018 stated that “In the 2016 consultation—Cost recovery for services under the National System for Domestic Commercial Vessel Safety—it was proposed to exempt unpowered class 4 hire-and-drive vessels (such as kayaks, canoes, dragon boats and small sailing vessels) from the national system levy. Subsequent to those proposals, and based on further work, it is now proposed that these vessels be included in the levy scheme.”

QORF strongly objects to the proposed inclusion of unpowered class 4 hire-and-drive vessels in the levy scheme. QORF understands the need for government agencies to engage in cost recovery, however we question what evidence is available showing that business operators using these specific types of vessels are causing AMSA to incur costs.

We believe that including these craft in the levy scheme will have the effect of driving businesses away from the use of kayaks, canoes, dragon boats and small sailing vessels. This decision will cause some businesses to cease operations.

The proposed inclusion in the levy scheme by the Australian Maritime Safety Authority could have the ironic effect of reducing safety for participants in paddling and sailing activities. Small businesses currently deliver safety training to participants before allowing people to hire and use their craft. Small business operators deliver training and education to people regarding safe use of these types of craft.

If operators are driven away from hire of paddlecraft and small sailing vessels and the costs increase for businesses which deliver training, then safety training will become less cost-effective and less readily available. If a business operator chooses to continue to hire these vessels to members of the public, it is expected that the costs of the levy would be passed on to the end users, making safety instruction a more expensive proposal – this would have the effect of reducing safety training for many members of the public.

Including unpowered class 4 hire-and-drive vessels in the levy scheme will dramatically affect many operators across the outdoor sector, whether in training, education or tourism. QORF strongly urges AMSA to reconsider the proposal to include unpowered class 4 hire-and-drive vessels in the levy scheme.

QORF would be pleased to engage with the department or AMSA in relation to this submission. We understand that this submission may be published as part of the community feedback process.

If further information is required, please contact us on 07 3369 9455 or eo@qorf.org.au.

Regards,

Dom Courtney
QORF Executive Officer

A List of Issues (courtesy Outdoors Victoria)

Removal of exemption:

  • No justification has been provided for the removal of the exemption
  • No justification has been provided why some craft are exempt and other craft are not – for example why is a stand-up paddle board exempt but a single person kayak not
  • No cost benefit analysis is provided for the change
  • No assessment of the likely impact on business, active recreation, outdoor education experiences and the likely associated increased heath costs of reduced activity, caused by the change, has been provided.

Cost issues

  • Represents a tax on small business
  • The costs affect fleet owners disproportionately – for example
    • in 2022-23 a residential camp offering canoeing as an activity with a fleet of 10 canoes (class 4) being paddled on a small dam on their own property (Area of operation E “smooth waters”) would need to pay $193 x 10 = $1,930pa.
    • in 2022-23 a commercial vessel greater than 45m (class 4) with unlimited domestic operations (Area A including extended offshore operations) pays $385pa
  • It is likely to make the activity unviable for all operators of canoeing and kayaking including but not limited to residential camps, training providers and outdoor adventure providers including outdoor education providers
  • Will impact business sales where a try before you buy system is in place
  • Why is the cost of rescue not borne by surfers, paddle boards and surf skis, but is borne by canoeists and kayakers?

Impact of the law

  • the tax is likely to drive out of business small tour, third-party activity and education businesses
  • concerns for the survey systems and requirements
  • while type and location of operation effects the amount of tax paid, the costs still do not reflect accurately the level of risk the activity involves or the likelihood of requiring rescue meaning some operators are cross subsidising other more high risk operations
  • low risk fleet operations serviced by State Government agencies (e.g. Police) cross subsidise higher risk maritime operations serviced by AMSA:
    • as detailed in the example discussed above, a canoe fleet owner operating on “smooth waters” such as their own property small dam pays more than a large vessel operating in extended offshore operations/unlimited domestic operations
    • the canoe fleet owner is highly unlikely to require rescue on the dam while the large vessel is far more likely to require significant search and rescue resources
  • canoe and kayaking training will decrease as providers cannot afford the additional cost burden as they are providing effectively “hire and drive” services
  • reduced number of canoeing and kayaking ‘training providers’ ironically is likely to see an increase in more inexperienced paddlers undertaking the activity as they lack an appropriate means of obtaining training, therefore increasing the likelihood of more rescues being required. The law paradoxically makes the system less safe unintentionally.
  • the increased cost will cause a significant reduction in the availability of canoeing and kayaking as an activity for students as schools will be unable to afford the increase in costs, either due to the cost of the fleet for independant schools or the cost being passed on by their third-party activity providers
  • the reduction in ‘supervised outdoor activity’ has significant impacts on active recreation and current state government attempts to encourage a more active lifestyle to reduce obesity and increase heathy lifestyles. Barriers to active recreation is likely to increase the cost burden on the Federal and State health budgets.

Intent of the law

  • The funds raised by the law does not appear to offer any benefit or service improvements to kayak and canoe users
  • The law has a range of fundamental grey areas that do not appear to be intended which are best address by retaining the exemption. This include but are not limited to:
    • Are inflatable kayaks considered rafts or kayaks?
    • Is a residential camp operation required to pay the levy on their canoe/kayak fleets
    • Are providers of adventure activities including those that provide services to schools who also provide craft to use captured under the law
    • Are training providers providing fee for service instruction such as Registered Training Organisations captured under the law?
    • Why are independant schools to be charged a levy whilst government schools are exempt?
  • The law is designed to cost recover for maritime rescues but operators on inland smooth waters are being taxed even though they are operating outside of Australian Maritime Safety Authority’s (AMSA’s) rescue jurisdiction
    • for example the rescue agency is the Police for inland waters in Victoria (refer Emergency Management Manual Victoria – Control and Support Agencies for Response Page 7-3)

Consultation process

  • The initial consultation misled the sector by stating an exception would be in place, thereby the sector did not fully engage in the process
  • The Authority potentially mislead and provided false information to the sector by advising a specific exemption was in place and not identifying the potential for the exemption to be removed
  • The lack of consultation with stakeholders on the removal of the exclusion
  • The lack of time to provide sufficiently argued reasoning regarding the removal of the exemption
  • The lack of advice to key stakeholders regarding the change.

The following is an email sent out by the Australian Maritime Safety Authority (AMSA) on the subject.

IMPORTANT INFORMATION

For owners and operators of unpowered hire and drive vessels
In the 2016 consultation—Cost recovery for services under the National System for Domestic Commercial Vessel Safety—it was proposed to exempt unpowered class 4 hire-and-drive vessels (such as kayaks, canoes, dragon boats and small sailing vessels) from the national system levy. Subsequent to those proposals, and based on further work, it is now proposed that these vessels be included in the levy scheme.

Further to this consultation, the Department of Infrastructure, Regional Development and Cities has this week released the draft levy legislative instruments, or rules.

These rules set out the domestic commercial vessels that will be required to pay a levy, the amount of the levy payable and the schedule of fees for certificates and other related services.

The Department welcomes written submissions on the draft legislative instruments by Monday 30 April 2018. The consultation timeframe is necessary to ensure arrangements can be in place by 1 July 2018.

Visit the Department of Infrastructure, Regional Development and Cities website to find out more.

Please note: the consultation is not intended to determine the level of services or the scope of the levy under these instruments. The Australian Maritime Safety Authority’s (AMSA) initial service offering and charging arrangements under the National System for Domestic Commercial Vessel Safety have been agreed by the Australian Government and are consistent with the Australian Government Charging Framework.

The levy for the national system will be phased in gradually to allow time for industry to adjust and prepare for the changes. Details on the subsidised levy charges are outlined on AMSA’s website.

Useful Resources

 

Legislation – has detailed definitions:
https://www.legislation.gov.au/Details/F2016C00828

Guidance note – for community groups:
https://www.amsa.gov.au/file/2001/download?token=JSos0BBk

(Thanks to Green Frog Adventures)

 

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