Section 4 : Other Reporting Requirements
4.1 Purchaser-provider arrangements
AMSA does not have any purchaser-provider arrangements with other agencies.
4.2 Cost recovery arrangements
AMSA commenced operations on 1 January 1991 and was established under the Australian Maritime Safety Authority Act 1990 that came into effect on 22 October 1990. The Act had the main objects to:
(a) Promote maritime safety
(b) Protect the marine environment from pollution from ships and other environmental damage caused by shipping
(c) Provide a national search and rescue service
(d) Promote the efficient provision of services by the Authority.
These functions had formerly been performed by the Department of Transport and Regional Services under a mixture of levy and budgetary funding.
Cost Recovery Policy
The Australian Government took a policy decision at the time of AMSA's establishment that its ship safety and regulatory services would be fully cost recovered from the shipping industry primarily through levy funding and fee for service sources. The primary source of AMSA's regulatory funding is through its levy system, with only a small proportion of revenue from fees and charges. As indicated in Table 2.5 outlining the total estimated levies and Table 2.3 outlining the total estimated fees and charges.
The cost of search and rescue coordination services would continue to be met by the Australian Government through Community Service Obligation (CSO) funding. Under a number of international conventions, Australia is obliged to provide search and rescue services for persons in aircraft and vessels in distress in Australia's internationally designated search and rescue region. This covers almost 53 million square kilometres or one tenth of the earth's surface and comprises the East Indian, southwest Pacific and Southern Oceans. The majority of search and rescue incidents involve recreational and fishing vessels and small aircraft.
Cost Recovery Arrangements
AMSA receives funding for its marine safety, regulatory and environment protection services from three corresponding levies on commercial shipping as follows:
The Marine Navigation Levy is imposed under the Marine Navigation Levy Collection Act 1989 and funds maintenance and management of Australia's national network of aids to navigation for commercial shipping. As the network is primarily designed to assist safe navigation of commercial shipping, the Government policy has been to recover the full cost of the network from the commercial shipping industry through the Marine Navigation Levy. This accords with the principle of the "user pays" whereby those for whose benefit the service is provided should meet the costs of the service.
The Regulatory Functions Levy is imposed under the Marine Navigation (Regulatory Functions) Levy Collection Act 1991 and funds the regulation and surveillance of the shipping industry to ensure seaworthiness and safe operation of vessels in Australian waters and enhancing maritime safety and environment protection standards. The Government policy has been to recover the full cost of AMSA's ship safety and regulatory functions from the commercial shipping industry through the Regulatory Functions Levy. This accords with public sector pricing principles to recover avoidable costs whereby shipping is an economic activity that requires regulation in the community interest and the cost of such regulation should be borne by those generating the need for it and not by the general community.
The Protection of the Sea Levy is imposed under the Protection of the Sea (Shipping Levy) Collection Act 1981 and funds the operation of Australia's National Plan to Combat Pollution of the Sea by Oil and Other Noxious and Hazardous Substances. The recovery of the full costs of managing the National Plan is based on the principle of the "potential polluter pays" whereby any ship may require pollution response services under these national arrangements and therefore the shipping industry should meet the cost of maintaining these services.
Each levy is charged on a vessel arriving at an Australian port where the levy has not been paid in the past three months on a rate applied to the Net Registered Tonnage of the vessel. This regime was based on a simple measure of the earning capacity of the vessel and hence the value it would draw from each output system during the three-month period in which the vessel normally loaded and discharged cargo around the Australian coast.
The Australian Government receives levy payments from the shipping industry imposed by the levy legislation and these funds are appropriated under Section 48 of the Australian Maritime Safety Authority Act 1990 as special appropriations. Table 2.5 details the estimates of these special appropriations for 2004-05 and 2005-06.
In accordance with the objective of the Australian Maritime Safety Authority Act 1990 to promote efficient provision of AMSA services, AMSA has substantially consolidated its asset base and adopted a range of management strategies since its inception to make considerable efficiency gains in service delivery and to provide regular opportunities to reduce levy rates on an ongoing basis.
Fees for service
AMSA also has the ability to make determinations fixing charges under section 47 of the Australian Maritime Safety Authority Act 1990. Section 47(12) requires AMSA's fees and charges to be reasonably related to the costs incurred, or to be incurred, by AMSA in their provision. Table 2.3 details estimates of the receipts from AMSA's fee for service activities in 2004-05 and 2005-06.
AMSA provides a range of marine services for which it makes a charge based on the average cost of delivering a specific service or the time taken to deliver the service multiplied by a standard hourly rate. Charges may also include waiting time, travelling expenses and cancellation fees associated with particular services.
AMSA marine services include: inspection of ships, cargo, and ships' safety equipment; activities involved with issuing qualifications (certificates of competency) to seafarers (conducting oral practical examinations for navigating and engineering officers and assessing sea time prerequisites for qualifications); issuing and renewing coastal pilot licences; and services provided by the Shipping Registration Office.
Monitoring and Review
The Australian Maritime Safety Authority Act 1990 requires in section 12 that AMSA is to consult, where appropriate, in the performance of its functions and the exercise of its powers with government, commercial, industrial, consumer and other relevant bodies and organisations. AMSA has established an Advisory Committee of key stakeholders and has a number of specialised consultative committees in specific areas of its operations that provide feedback on AMSA's operations, including its cost recovery arrangements. AMSA has discussed with the Advisory Committee the requirements of the Commonwealth's Cost Recovery Policy and Guidelines and their application to AMSA's services.
The Australian National Audit Office (ANAO) reported on its performance audit in 2000 into the management of Australian Government non-primary industry levies, which included the three AMSA levies. The report raised no significant issues in respect to AMSA and AMSA accepted relevant recommendations in the report. In June 2003, the ANAO reported on its performance audit of AMSA's management of the aids to navigation network, including examination of revenue and expenditure management. No recommendations were made for improvement in AMSA's administration of this function. AMSA's budgeting process was found to have successfully balanced expenditure with the operational and capital needs of the network and the levy revenue raised for this purpose.
In 1997, AMSA commissioned a comprehensive review of the principles and policies underpinning the levy arrangements by an independent consultant, involving extensive consultation with stakeholders. This review was updated in 2002 by the same independent consultant conducting an examination of the strategic directions of the levy system. AMSA accepted the recommendations of these reviews and implemented them in consultation with stakeholders. AMSA will be undertaking another review in 2007-08 in line with the Australian Government's Cost Recovery Guidelines.
AMSA also regularly reviews its fees and charges in consultation with relevant stakeholders.
AMSA considers that its levies and fees and charges are in line with the Australian Government's Cost Recovery Policy and Guidelines and Australian Government policy decisions in relation to the specific services provided by AMSA.
The undernoted chart shows the overall downward trend in AMSA revenue and expenditure over the last four years since 2000-2001, which demonstrates AMSA's efficiency gains in service delivery flowing from its consolidation of its asset base and adoption of a range of management strategies since its inception. The rise in revenue and expenditure shown by the chart in the four future years mainly results from the Budget measures in 2004-2005 and 2005-2006 allocating additional funding to enhance AMSA's search and rescue capability.
(click on the image to view the larger version)
4.3 Australian Government Indigenous Expenditure
Table 4.1: Australian Government Indigenous Expenditure
AMSA has no Australian Government Indigenous Expenditures.