EXPLANATORY STATEMENT

 

Select Legislative Instrument 2005 No. 241

 

Subject --          ACIS Administration Act 1999

 

ACIS Administration Amendment Regulations 2005 (No. 1)

 

The ACIS Administration Act 1999 (the Act) established the Automotive Competitiveness and Investment Scheme (ACIS) as a transitional assistance scheme to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation.  ACIS rewards eligible activity by registered participants in the form of duty credits, which are fully tradeable instruments and which can be used to acquit a liability for Customs Duty on eligible automotive imports.

 

Section 116 of the Act provides that only the Governor-General may make Regulations under the Act. 

 

ACIS was originally scheduled to operate from 2001 until the end of 2005 and the ACIS Administration Regulations 2000 (the Principal Regulations) reflected this fact and did not allow, in certain places, for claims for ACIS credits to be made after 31 December 2005. 

 

In December 2002, the Prime Minister announced the extension of ACIS until the end of 2015.  The aim of the proposed amendment to the Principal Regulations is to allow ACIS participants to claim certain ACIS credits, relating to investment in plant and equipment, until ACIS terminates on 31 December 2015. 

 

As permitted under paragraph 18 (2)(a) of the Legislative Instruments Act 2003, consultation was not undertaken with respect to this amendment as it is of a minor machinery nature.  Extensive consultations with the automotive industry were conducted in developing ACIS and the Principal Regulations, and also in relation to the extension of ACIS announced in December 2002.

 

Further details are set out in the Attachment.

 

ACIS Administration Amendment Regulations 2005 (No. 1)

 

Regulation 13F           Maximum claimable value for allowable plant and equipment

 

Subregulation 13F(5) of the ACIS Administration Regulations 2000 sets out the maximum claimable value of plant and equipment, where the plant and equipment is acquired by the participant under an operating lease.  Subparagraphs 13F(5)(a)(ii) and (b)(ii) currently do not allow claims to be made after 31 December 2005 - the original termination date for the Automotive Competitiveness and Investment Scheme (ACIS).  The proposed amendment will extend the period ACIS participants can claim for plant and equipment acquired under an operating lease until 31 December 2015 -- the current termination date for ACIS.