Fee Units

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Economic Reform Unit

Fee Units Act 1997 and the Value of a Fee Unit

The Fee Units Act 1997 came into operation in the 1998/99 financial year and provides for the automatic indexation of most Government fees in line with movements in the Consumer Price Index for Hobart (CPI). This indexation ensures that the Government is able to recover increases in the cost of providing services through corresponding increases in the fees it charges to provide those services.

Under the Fee Units Act, fees set under an enactment must be set in fee units and not in dollar amounts, unless those fees are exempt from the Act. In cases where fees are set in dollar amounts (such as in legislation pre-dating the Fee Units Act), the amount of the fee is to be read as the same number of fee units (see "Setting and Adjusting Fees" for more details).

Definition of a Fee
Under the Fee Units Act, a fee is defined as a fee or charge that is payable under any enactment, but does not include a regulation, rule or by-law unless it is made by or approved, confirmed or assented to by the Governor.

Administration
The Minister currently responsible for administering the Fee Units Act is the Treasurer, Hon Michael Aird MLC. The Department of Treasury and Finance is the department responsible to the Treasurer in relation to the administration of the Act.

Exemptions
The Minister, by notice published in the Gazette, may exempt fees from the Fee Units Act. Exemptions from the Fee Units Act are not common and usually apply when the body setting the fee operates at arms length from a Government department. The Fee Units Act does not apply to fees levied by a Government Business Enterprise (GBE), unless the fee relates to a public regulatory function or power of that GBE.

How is the Value of a Fee Unit Calculated?
The value of a fee unit for any financial year is calculated based on the value of the fee unit for the previous financial year and the change in the CPI for Hobart. The CPI change is determined by dividing the average Hobart CPI in the year to December immediately preceding the financial year in which the value of a fee unit is to apply, with the average Hobart CPI in the previous year to December.

The calculation also allows for an adjustment factor, which caters for cases where the CPI growth is considered greater than the actual increase in costs to the Government of providing services for which fees are charged. An example was the introduction of the Commonwealth Government's Goods and Services Tax (GST) in July 2000, which increased CPI by around 2.75 per cent more than the increase in the cost to the Government of providing services.

The Treasurer therefore set the fee unit adjustment factor at 2.75 per cent for the calculation of the value of a fee unit for 2001-02.

The calculation formula for the value of a fee unit is as follows:

F1 = F0 x [(B/C)-X]

Where –

F1 is the value in dollars of one fee unit during the relevant financial year;
F0 is the value in dollars of one fee unit during the previous financial year;
B is the average CPI figure for Hobart in respect of the 4 quarters ending on 31 December immediately preceding the financial year in which the value of a fee unit is to apply;
C is the average CPI figure for Hobart in respect of the 4 quarters immediately preceding the 4 quarters referred to in the definition of B; and
X is the fee unit adjustment factor, expressed as a decimal, and must be greater than or equal to zero.

The fee unit values for 2009-10 and previous years are as follows:

2009-10	$1.33
2008-09	$1.28
2007-08	$1.25
2006-07	$1.21
2005-06	$1.17
2004-05	$1.14
2003-04	$1.11
2002-03	$1.08
2001-02	$1.05
2000-01	$1.02
1999-00	$1.01
1998-99	$1.00

Gazettal of Fees
The Minister is responsible for publishing in the Government Gazette, by 15 February each year, the value of a fee unit that is to apply for the financial year beginning on 1 July in that year. Government agencies are then responsible for publishing in the Gazette, by 31 March of the same year, a schedule of the fees they intend to charge from 1 July according to the new fee unit value. The schedule must include:

1.	the amount of the current fee, excluding the goods and services tax;
2.	the amount of the fee for the next financial year, excluding the goods and services tax;
3.	whether or not the fee is excluded from the goods and services tax under section 81-5(2) of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth;
4.	if the fee is not excluded from the goods and services tax, the amount of goods and services tax payable in respect of the fee; and
5	the total fee payable.

In addition, Government agencies are required to take any other action considered appropriate in order to inform fee payers of any changes to fees.

Tabling Fees in Parliament
Agencies are required to table their Gazette notices in both Houses of Parliament within ten sitting days of its publication. The sitting schedules for the House of Assembly and the Legislative Council are subject to change at any time during the year. Government agencies are advised to check these schedules regularly.
In circumstances where the Gazette notice contains an incorrect fee or mistakenly omits a fee, provisions under the Fee Units Act allow for an amending notice to be published and tabled as follows:

if a Gazette notice which contains an incorrect or omitted fee has not yet been laid before each House of Parliament, the responsible Head of Agency may publish an amending Gazette notice to correct or insert the fee; or
if a Gazette notice which contains an incorrect or omitted fee has been laid before each House of Parliament, the responsible Minister may publish an amending Gazette notice to correct or insert the fee.

The amendment notice must also be laid before each House of Parliament within ten sitting days of gazettal.

If a fee for the following financial year is not gazetted, or is gazetted but not tabled, that fee cannot apply and the fee remains at the same value as in the previous year.

Gazette notices published in accordance with the Fee Units Act are considered to be subordinate legislation and, as such, Parliament can disallow all or part of a Gazette notice. This effectively means that Parliament can disallow one or more of an agency's fee increases. Where a fee increase has been disallowed, the value of the fee remains at the same level as in the previous year.

Setting and Adjusting Fees
Fees can be set and adjusted at any time in accordance with the provisions of the enactment under which they are levied. The Fee Units Act is simply the mechanism to index fees once they have been set or adjusted.

If a new fee is set, or a current fee is adjusted, after 31 March in a particular year (the date at which existing fees are gazetted), the Fee Units Act provides that the fee payable for the remainder of the financial year (from the date of commencement to 30 June), is calculated by applying that year's fee unit value. The fee payable after 1 July is calculated by applying the value of a fee unit for the applicable financial year.

For example, an existing fee set at 100 fee units as at 31 March 2007 would be gazetted to increase from its current value of $121 to $125 on 1 July 2007. However, if the enactment setting the fee were amended to adjust the fee to 200 fee units effective from 30 April 2007, the fee payable for the remainder of 2006-07 would be $242 (200 fee units multiplied by $1.21), and the fee payable from 1 July 2007 would be $250 (200 fee units multiplied by $1.25).

In the case of fees set in a new enactment that is to commence after 31 March and before 30 June, there is no gazettal of these fees under the Fee Units Act. However, Parliament has the opportunity to scrutinise and disallow the fees prescribed by the legislation and take into account the impact of the Fee Units Act, at the time it was debated in Parliament, or in the case of subordinate legislation, by the Subordinate Legislation Committee.

Further Information
For further information regarding fee units and the Fee Units Act 1997, please contact David Richardson, Manager, Economic Reform Unit, Department of Treasury and Finance on (03) 6233 7214 or by email: David.Richardson@treasury.tas.gov.au.