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Review of Stamp Duty and Compulsory Third Party Insurance

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					   Review of Stamp Duty and
Compulsory Third Party Insurance

        November 1999




                                     Prepared by:
                    Arthur Robinson & Hedderwicks
National Road Transport Commission
Review of Stamp Duty and Compulsory Third Party Insurance
Report Prepared by Arthur Robinson & Hedderwicks

ISBN 0 642 54446 8
                            REPORT OUTLINE

Date:             November 1999
ISBN number:      0 642 54446 8
Title:            Review of Stamp Duty and Compulsory Third Party Insurance
Address:          National Road Transport Commission
                  Level 5/326 William Street
                  MELBOURNE VIC 3000
                  PO Box 13105
                  LAW COURTS VIC 8010
                  Internet:      www.nrtc.gov.au
                  E-mail:        nrtc@nrtc.gov.au
Type of report:   Discussion Paper
Objectives:       Improve Road Transport Efficiency, Lower Administration Costs
NRTC Programs:    Charges, Implementation of Reforms
Key Milestones:   None
Abstract:         This report reviews the changes in stamp duty and compulsory third
                  party insurance (CTPI) since publication of a report Stamp Duty and
                  Compulsory Third Party Insurance (NRTC, 1993) on the prevailing
                  variations in stamp duty and CTPI. Its key objective is to highlight
                  anomalies that would need to be addressed by the responsible
                  agencies if more consistent stamp duty and CTPI arrangements
                  between jurisdictions are to be achieved.
                  The imposition of stamp duty and CTPI is governed by various State
                  and Territory laws. The report identifies a number of variations in
                  State and Territory practices which may influence an operator’s
                  decision about where vehicles are registered, including:
                   differences in stamp duty rates;
                   stamp duty exemptions, including exemptions relating to the
                     transfer of vehicles from the Federal Interstate Registration
                     Scheme to State or Territory registration;
                   differences in the determination of the taxable value for stamp
                     duty purposes;
                   differences in CTPI premiums;
                   differences in CTPI requirements for trailers;
                   reconciliation of vehicle categories and classifications; and
                   CTPI coverage of unregistered vehicles.
Purpose:          For information
Key words:        stamp duty, insurance, registration
                                     FOREWORD

The National Road Transport Commission (NRTC) was established in 1991 to develop
practical reforms that deliver greater consistency in the regulation and administration of
road transport in Australia. While they are not matters within the NRTC’s formal charter,
differences in stamp duty and compulsory third party insurance (CTPI) arrangements
between jurisdictions can directly influence where vehicle operators, and in particular
heavy vehicle operators, choose to register their vehicles.

These decisions may also limit the effectiveness of national road transport reforms to heavy
vehicle charges and registration arrangements. For example, one of the principal aims of
introducing nationally uniform heavy vehicle registration charges was to minimise
incentives to “shop around” between States and Territories for lower charges. However,
varying stamp duty rates and differing approaches to the treatment of exemptions from duty
continue to provide strong financial incentives for operators to register vehicles in
particular jurisdictions. Other perceived anomalies, such as the variations in the CTPI
coverage required for trailers, pose particular problems for operators of combinations of
vehicles registered in different jurisdictions. As a result, the road transport industry has
frequently asked the NRTC to address these issues.

In 1993 the NRTC published Stamp Duty and Compulsory Third Party Insurance
(NRTC, 1993) (the 1993 Report) to highlight differences in State and Territory practices
that needed to be addressed if greater national consistency in relation to stamp duty and
CTPI arrangements is to be achieved. The purpose of this report is to review changes in
practice since 1993 and promote discussion on the inconsistencies that remain.

The NRTC appreciates that in some cases, regional variations may be appropriate. For
example, differences in CTPI premiums may simply reflect differences in actuarial risk
between jurisdictions or regions. However, if jurisdictions wish to reduce “shopping
around” and provide an equitable system, the present range of differences should be
reduced.

This report outlines existing State and Territory stamp duty and CTPI practices and makes
an assessment of their importance in decisions about where to register a vehicle. The
emphasis is on heavy vehicles, ie those with a gross vehicle mass (GVM) greater than
4.5 tonnes, as this is where differences are most likely to affect a vehicle operator’s
registration decisions.

A copy of Stamp Duty and Compulsory Third Party Insurance (National Road Transport
Commission, January 1993) may be obtained by contacting the NRTC.

Responsible agencies may use the report to focus attention on the range of issues that need
to be addressed if a more consistent approach is to be achieved.

PLEASE NOTE:
Initial data collection and comparison for this report was conducted in early 1998. Further
data collection and other matters were checked and updated prior to publication of the
report.
                                      SUMMARY

Background
This report has been commissioned by the NRTC to review the changes in stamp duty and
compulsory third party insurance (CTPI) since publication of a report Stamp Duty and
Compulsory Third Party Insurance (NRTC, 1993) on the prevailing variations in stamp
duty and CTPI. The key objective of this Report is to highlight anomalies that would still
need to be addressed by the responsible agencies to achieve more consistent stamp duty
and CTPI arrangements.

Stamp duty and CTPI matters are not within the NRTC’s brief and the NRTC has no
responsibility in relation to their administration. However, the NRTC needs to be aware of
any inconsistencies to determine their impact on achieving nationally consistent road
transport law.

The imposition of stamp duty and CTPI is governed by various State and Territory laws.
While responsibility for stamp duty in each jurisdiction rests with either the Treasurer or
Finance Minister, the Commissioner (or Comptroller) of the respective State/Territory
revenue offices is responsible for its administration. The registration and CTPI regimes are
generally the responsibility of the Minister for Transport in each jurisdiction and
administered by the relevant transport/road authority.


Discussion
There are a number of differences identified between jurisdictions in relation to stamp duty
and CTPI which would impact on the objective of achieving greater consistency in relation
to the operation of heavy vehicles. For example:
 stamp duty rates in respect of motor vehicle registration vary between 2 and 4%;
 stamp duty exemptions vary across jurisdictions, eg. only one jurisdiction exempts buses
    carrying more than 12 passengers, while another provides an exemption for heavy
    trailers;
 maximum CTPI premiums vary by up to $3299 for large buses. The smallest variation
    in maximum CTPI premium between jurisdictions was $69 for trailers; and
 CTPI premiums are generally not payable for trailers in five jurisdictions. This causes
    concern about the implications of an exempt trailer being involved in a crash in a
    jurisdiction which requires separate trailer coverage.

Although a number of jurisdictions have been working toward a ‘rewrite’ project to
provide greater uniformity among the stamp duty laws since publication of the 1993 report,
only New South Wales and the ACT have has enacted new stamp duty legislation. It is
understood that Victoria, South Australia, and Tasmania and the Australian Capital
Territory all plan to enact new stamp duty legislation. However, as each jurisdiction will
continue to levy duty at the same rates as currently imposed and provide for the same
exemptions as currently exist, the ‘rewrite’ project will not greatly improve consistency
between these jurisdictions.
To achieve improved consistency the following issues require examination:
 differences in stamp duty rates;
 stamp duty exemptions, including exemptions relating to the transfer from the Federal
  Interstate Registration Scheme to State or Territory registration;
 differences in the determination of the taxable value for stamp duty purposes;
 differences in CTPI premiums;
 differences in CTPI requirements for trailers;
 CTPI coverage of unregistered vehicles; and
 reconciliation of vehicle categories and classifications for both stamp duty and CTPI
  purposes.
                                                 TABLE OF CONTENTS

1. INTRODUCTION .......................................................................................................... 1
2. STAMP DUTY ................................................................................................................ 3
   2.1   Introduction................................................................................................................. 3
   2.2   The ‘Rewrite’ Process................................................................................................. 3
   2.3   Application of Stamp Duty ......................................................................................... 3
   2.4   Rates ........................................................................................................................... 5
   2.5   Value for Stamp Duty Purposes ................................................................................. 6
          2.5.1      New Vehicles .........................................................................................................................6
          2.5.2      Secondhand Vehicles .............................................................................................................7
   2.6 Exemptions from Stamp Duty .................................................................................... 7
          2.6.1      General Exemptions ...............................................................................................................7
          2.6.2      The Federal Interstate Registration Scheme .........................................................................10
3. COMPULSORY THIRD PARTY INSURANCE ...................................................... 12
   3.1 Introduction............................................................................................................... 12
   3.2 Insurers ..................................................................................................................... 12
   3.3 Premium Levels ........................................................................................................ 12
          3.3.1      Location................................................................................................................................16
          3.3.2      Vehicle Use ..........................................................................................................................16
   3.4 Coverage ................................................................................................................... 16
          3.4.1      Registered Vehicles ..............................................................................................................16
          3.4.2      Unregistered Vehicles ..........................................................................................................17
          3.4.3      Motorised Vehicles ..............................................................................................................17
   3.5 Stamp Duty on CTPI Premiums ............................................................................... 18
   3.6 Registration Transfer ................................................................................................ 18
          3.6.1      Between Owners ...................................................................................................................18
          3.6.2      Between Jurisdictions ...........................................................................................................19
   3.7 Other Issues .............................................................................................................. 19
4. ASSESSMENT OF DIFFERENCES AND ISSUES .................................................. 21
   4.1 Introduction............................................................................................................... 21
   4.2 Stamp Duty Rate ....................................................................................................... 21
          4.2.1      New Vehicles .......................................................................................................................21
          4.2.2      Secondhand Vehicles ...........................................................................................................23
   4.3 Compulsory Third Party Insurance Premiums .......................................................... 23
   4.4 Stamp Duty Rates and CTPI Premiums.................................................................... 27
   4.5 Stamp Duty Exemptions ........................................................................................... 29
          4.5.1      South Australian Buses.........................................................................................................29
          4.5.2      FIRS ..................................................................................................................................... 29
          4.5.3      Trailers ................................................................................................................................. 30
          4.5.4      Special Equipment ................................................................................................................30
   4.6   Value for Stamp Duty Purposes ............................................................................... 30
   4.7   Vehicle Categories .................................................................................................... 32
   4.8   Coverage ................................................................................................................... 33
   4.9   Registration Transfer ................................................................................................ 33
   4.10           Tax Reform ...................................................................................................33
5. UNRESOLVED ISSUES...............................................................................................35
APPENDIX A: QUESTIONNAIRE
                                                 LIST OF TABLES

Table 1:        Application of Stamp Duty by Transaction Type and State or Territory................. 4

Table 2:        Rate of Stamp Duty by State or Territory ................................................................ 5

Table 3:        Vehicles Exempt from Stamp Duty ......................................................................... 8

Table 4:        Owners Exempt from Stamp Duty .......................................................................... 9

Table 5:        CTPI Premiums for Selected Vehicles ($pa) ......................................................... 13

Table 6:        Stamp Duty Payable at Various Rates by Vehicle Type1 ...................................... 22

Table 7:        Maximum CTPI Premiums by Vehicle Type and Jurisdiction ($pa) .................... 24

Table 8:        Differences in Maximum CTPI Premiums between Jurisdictions between 1993
                premiums and current premiums ........................................................................... 24

Table 9:        Differences between minimum and maximum CTPI Premiums within Selected
                States ($pa) ............................................................................................................ 25

Table 10: Increase in Maximum CTPI Premiums by Vehicle Type and Jurisdiction
          between 1993 and 1999 (in $pa and % change) 1 .................................................. 26

Table 11: Differences Relative to Queensland in Stamp Duty and CTPI Premiums
          Available1 .............................................................................................................. 28

Table 12: Taxable Value for Stamp Duty .............................................................................. 30
Review of Stamp Duty and Compulsory Third Party Insurance                              Page 1




1. INTRODUCTION
The National Road Transport Commission (NRTC) was established in 1991 to develop
practical reforms to deliver greater consistency in the regulation and administration of road
transport in Australia. Although they are not formally included within the NRTC’s charter,
differences in stamp duty and compulsory third party insurance arrangements between
jurisdictions can directly influence where vehicle operators register their vehicles, and
affect State and Territory registration revenues. The purpose of this Report is to:
 outline and assess existing practices in relation to these matters, identifying changes
    made since the NRTC’s first report on these issues, Stamp Duty and Compulsory Third
    Party Insurance (NRTC, 1993) (the 1993 report); and
 highlight anomalies that would still need to be addressed by the responsible agencies to
    achieve more consistent stamp duty and CTPI arrangements.

Differences in stamp duty and CTPI may dilute the benefits arising from the
implementation of the nationally uniform heavy vehicle charges and consistent registration
practices. For example, differing approaches to the treatment of exemptions from stamp
duty represents a major obstacle to the successful implementation of the proposed abolition
of long term unregistered vehicle permits (UVPs). The abolition of long term UVPs would
deliver considerable administrative savings to registration authorities and industry.

Exemptions may also directly affect an operator’s decision on where to register a vehicle.
For example, a stamp duty exemption for buses in one jurisdiction presently provides an
opportunity for operators in other jurisdictions to evade duty by initially registering there,
and immediately re-registering in their home jurisdiction. The requirement under the
national heavy vehicle registration scheme for vehicles to be registered in the jurisdiction
in which they are principally operated will reduce scope for this practice in the future, but
the financial incentives remain.

Accordingly, even though stamp duty and CTPI are not within the NRTC's brief, the NRTC
needs to be aware of the anomalies and their impact on national road transport reforms.
This report attempts to assist by identifying matters that may conflict with the objective of
nationally consistent road transport law and administration.

The report outlines existing stamp duty and CTPI practices and makes an assessment of
their importance in decisions about where to register a vehicle. The emphasis is on
vehicles greater than 4.5 tonnes gross vehicle mass (GVM), as this is the focus of the
NRTC's responsibility with respect to registration charges and practices.

Questionnaires were circulated in March 1998 (see Appendix A for an example) to relevant
regulatory offices to determine the current situation on stamp duty and CTPI for the
purposes of preparing the report. The information reported by the relevant revenue offices
and registration authorities was compiled and variations since the 1993 report were
identified. The relevant offices and authorities were then asked to update the relevant
information prior to the preparation of the final Report in October 1999.
Page 2                                        Review of Stamp Duty and Compulsory Third Party Insurance



This report is divided into the following four sections, consistent with the 1993 report:
 Stamp Duty - describing the existing position for stamp duty, outlining significant
  differences from the position in the 1993 report;
 Compulsory Third Party Insurance - describing the existing position for CTPI, outlining
  significant differences from the position in the 1993 report;
 Assessment of Differences and Issues - including an assessment of the importance of
  differences between States and Territories and any move toward uniformity which has
  been achieved as a result of those changes; and
 Unresolved Issues - listing a number of issues which continue to require further
  attention if nationally consistent arrangement are to be achieved.
Review of Stamp Duty and Compulsory Third Party Insurance                              Page 3




2. STAMP DUTY

2.1 Introduction
Stamp duty is traditionally a tax levied on instruments. An “instrument” in this context
generally denotes formal documentation which sets out the rights and liabilities of parties
which may impact on their pecuniary positions. The relevant instrument on which duty is
levied varies between jurisdictions and includes an application to register, an application to
transfer registration and, in some jurisdictions, the certificate of registration.

In the case of motor vehicles, the stamp duty is generally collected by the registration
authority or registered dealers on behalf of the relevant revenue authority. Typically, stamp
duty in relation to motor vehicles is imposed at the time of purchase of a new vehicle or
when ownership of a vehicle is transferred.


2.2 The ‘Rewrite’ Process
New South Wales, Victoria, South Australia, Tasmania and the Australian Capital
Territory have been collaborating in reviewing and rewriting their stamp duty legislation to
attempt to harmonise arrangements across those jurisdictions. Queensland, Western
Australia and the Northern Territory do not intend to introduce similar legislation at this
time.

Of the participating jurisdictions, New South Wales is and the Australian Capital Territory
are the only States which has have enacted ‘rewrite’ legislation (the Duties Act 1997
(NSW)), which took effect in July 1998 and the Duties Act 1999 (ACT) which took effect
on 1 March 1999). Victoria, South Australia and Tasmania have all stated that they remain
committed to implementing ‘rewrite’ legislation.

Although it was an objective of the ‘rewrite’ project to provide for greater consistency, this
objective will not be achieved in all respects. For example, there will be no consistency in
relation to the:
 rates of duty imposed by each jurisdiction, as each jurisdiction will continue to impose
   its existing rates; and
 exemptions from stamp duty, as each jurisdiction will continue to maintain its existing
   exemptions from duty.
It is also difficult to say whether there will be consistency among the jurisdictions in
relation to the:
 dutiable ‘instrument’. The application to register a motor vehicle will be the dutiable
   ‘instrument’ under the NSW Duties Act 1997 and the ACT Duties Act 1999;
 definition of motor vehicle;
 determination of the dutiable value; and
 treatment of trading stock and demonstrator vehicles.

2.3 Application of Stamp Duty
Registration transactions on which stamp duty is levied are shown in Table 1. New
registrations and registration transfers incur stamp duty in each State and Territory. In
Page 4                                                      Review of Stamp Duty and Compulsory Third Party Insurance



some jurisdictions, the duty is levied on the application to register or application to transfer
registration (ie Victoria, Queensland, South Australia, Western Australia and Tasmania).
Other jurisdictions levy duty on the certificate of registration (ie Western Australia and the
Northern Territory).

Duty is not payable on the transfer of registration from another jurisdiction if the owner
remains unchanged. However, in Queensland and Tasmania, duty will be payable in
respect of the registration of a vehicle previously registered in another jurisdiction if the
owner is unable to show that stamp duty has been paid in the other jurisdiction in respect of
the registration. Similarly, in New South Wales and the Australian Capital Territory, under
the ‘rewrite’ legislation, an application to register a motor vehicle previously registered in
another jurisdiction is liable to duty unless the owner can show that duty has been paid in
that other jurisdiction.

The main difference in the application of stamp duty from the position in the 1993 report is
the application of stamp duty in relation to Federal Interstate Registration Scheme (FIRS)
vehicles. This has been dealt with in more detail in the discussion on exemptions.

The application of stamp duty does not change significantly under the New South Wales or
the Australian Capital Territory ‘rewrite’ legislation; duty will continue to be payable when
the motor vehicle is registered. However, it will be charged on the application for
registration or application to transfer registration rather than the certificate of registration.

Table 1:         Application of Stamp Duty by Transaction Type and State or Territory
 Transaction Type                          NSW       VIC        QLD        WA        SA       TAS       NT       ACT
 New registration                                                                                           
                                                                                         1
 Re-registration (Renewal)                   X        X           X         X        X          X        X         X
 Transfer from Interstate                    X        X           X         X         X         X        X         X
 Transfer of Owner                                                                                          
 Transfer from Interstate and of Owner                                                                      
 Transfer from FIRS to State/Territory        2
                                                       3
                                                                   4
                                                                             5
                                                                                               X        X        6

Notes:     1     In practice no stamp duty payable on renewal of registration (despite inclusion in definition
                 in s42A of the Stamp Duties Act 1923).
           2     Vehicles registered under FIRS before 01/07/95 are exempt if the vehicle is registered in the
                 same name in NSW as the previous registration.
           3     Vehicles registered under FIRS before 01/07/96 are exempt if registered in same name as
                 FIRS registration has been since that date.
           4     Vehicles registered under FIRS prior to 01/07/95 are exempt provided vehicle is registered
                 in Queensland after coming off FIRS, the registration is the first registration of the vehicle
                 in Queensland and the person in whose name the vehicle is registered in Queensland is the
                 same person in whose name the vehicle was registered under the federal legislation.
           5     Vehicles registered under FIRS prior to 16/01/97 are exempt if registered in same name as
                 FIRS registration has been since that date.
           6     Vehicles registered under FIRS prior to 01/07/95 are exempt if registered in same persons
                 name as FIRS registration has been since that date.
Review of Stamp Duty and Compulsory Third Party Insurance                                              Page 5



2.4 Rates
Current rates of stamp duty in each State and Territory are shown in Table 2. The rates
shown are those that occur most commonly. Notes to Table 2 provide explanations of
exceptions and variations in relation to New South Wales, Victoria, Western Australia,
South Australia, Tasmania and the Australian Capital Territory. The rates are quoted in
percentage terms, although in most States/Territories, they are actually quoted as an
amount per $100, ie $3 per $100 or part of $100. (In Victoria, they are quoted per $200 or
part of $200).

Since the 1993 report, the duty rates in New South Wales (2.5%), the Northern Territory
(2%) and the Australian Capital Territory (2.5%) have increased to 3%. The purpose of the
increase in the rate of duty has been attributed to a recovery of losses to revenue from a
reduction in grants and other financial assistance by the Federal Government (see
paragraph [16.53] Wallace and Zipfinger Australian Stamp Duties looseleaf service).

Accordingly, there is a much greater degree of uniformity with only Queensland (2%), and
Victoria (2.5%) and Western Australia (2.5%) levying duty at a different rate. The Western
Australian rate of duty was reduced from 3% to 2.5% from 1 July 1999.

Victoria is the only State that charges a different rate (4%) for secondhand vehicles.


Table 2:            Rate of Stamp Duty by State or Territory
                       State/Territory                                     Stamp Duty Rate (%)
 New South Wales                                                        3.01(2.5% from 1 July 1999)
 Victoria                                                                             2.52
 Queensland                                                                            2.0
 Western Australia                                                                  3.02.53
 South Australia                                                                      3.04
 Tasmania                                                                             3.05
 Northern Territory                                                                    3.0
 Australian Capital Territory                                                         3.06

Notes:      1       pPassenger carvehicle > $45,000              $1,350 plus 5% in excess of $45,000
                    Note: a passenger vehicle will includes a small bus seating not more than 9 persons,
                    including the driver.

            2       sSecondhand vehicle (previously registered in Victoria or elsewhere)      4%(previously
                    registered)
                    pPassenger cars (not previously registered)
                    not exceeding $35,000                        2.5%
                    > $35,000-$45,000                            4%
                    > $45,000                                    5%
                    Note: A passenger car includes a motor vehicle constructed principally to carry passengers
                    but excludes a motor vehicle of this kind, if it is equipped to seat more than 8 adults
                    (including the driver).a passenger car is defined to mean a motor vehicle designed to carry
                    not more than 8 persons.
Page 6                                                Review of Stamp Duty and Compulsory Third Party Insurance



               Non-passenger car (not previously registered)                                 2.5%


         3     Passenger vehicle
               < $15,000                                       2.5%
               $15,000 - $40,000                               2.5%   plus   (Market      Value –       15,000)
                                                                                            10,000
               > $40,000                                       5%                                                 Formatted

         4     $1-1,000                                        1% (minimum $5)
               $1,001-2000                                     $10 plus 2% in excess of $1,000
               $2,001-3000                                     $30 plus 3% in excess of $2,000
               > $3,000                                        (a)    $60 plus 3% in excess of $3,000 for
                                                                      commercial vehicles.
                                                               (b)    $60 plus 4% in excess of $3,000 for
                                                                      all other vehicles
               > $200,001                                      (commercial vehicle) refer Revenue SA State
               Taxation Office

         5     Passenger vehicle
               < $600                                          $20
               $601-35,000                                     3%
               $35,001-40,000                                  $1,050 plus 11% in excess of $35,000
               > $40,000                                       4%
               Note: a passenger vehicle is defined to means a motor vehicle designed to carry not more
               than 8 persons.

         6     Called Registration TaxPassenger vehicle > $45,000 $1,350 plus 5% in excess of $45,000
               Note: a passenger vehicle includes a small bus seating not more than 9 persons, including
               the driver.

2.5 Value for Stamp Duty Purposes

2.5.1 New Vehicles
The applicable value for stamp duty purposes is generally as follows:
 Victoria and the Australian Capital Territory uses the greater of the "purchase price" or
  the market value;
 Queensland and South Australia use "list price" (recommended retail selling price) for
  new vehicles. If there is no "list price", the value will be the greater of the purchase
  consideration or market value in Queensland and the market value in South Australia.;
  In the Northern Territory it will be the market value; and
                                                                                                                  Formatted: Bullets and Numbering
 Northern Territory uses the sum of the amount for which the motor vehicle and any
  additional equipment in or added to the vehicle was sold (including any deposit, trade-in
  allowance and delivery charges) for arms length dealings and market value (including
  any additions to the vehicle) for any other dealings;
 New South Wales, Western Australia and Tasmania use "market value".; and
                                                                                                                  Formatted: Bullets and Numbering
 New South Wales and the Australian Capital Territory use the greater of the
  consideration or the market value of the vehicle at the time duty is payable.

Subject to the following comments, the value on which stamp duty is calculated for first
registration of vehicles is generally consistent with the values outlined in the 1993 report:
Review of Stamp Duty and Compulsory Third Party Insurance                             Page 7



 the Northern Territory now uses the purchase price if parties are at arms length, and
  market value in any other case;
 in New South Wales and the Australian Capital Territory, the greater of the market
  value or consideration paid will be is used under the ‘rewrite’ legislation; and
 in Western Australia, the legislation states that the appropriate value for stamp duty
  purposes will be the market value. However, the legislation also requires the applicant
  to provide details of the purchase price, and in practice, it is considered that where the
  purchase consideration is higher than the market value, the purchase consideration
  reflects the true market value.

2.5.2 Secondhand Vehicles
There has been no substantive changes to the way in which the value for secondhand
vehicles is determined since the 1993 report. Legislatively, the value for duty purposes is
the greater of the purchase price or market value in all States and Territories except New
South Wales, Western Australia Northern Territory and Tasmania. Northern Territory
makes no distinction between new and secondhand vehicles. In New South Wales and
Tasmania, this valuation appears to apply as a matter of practice. When determining the
market value in Victoria, Western Australia, South Australia, Western Australia and
Tasmania, reference to appropriate pricing guides (eg Glass’s Guide and the Red Book) is
made.


2.6 Exemptions from Stamp Duty

2.6.1 General Exemptions
There are a variety of exemptions from the payment of stamp duty reported in each of the
States and Territories. These have been put into two categories:
 vehicles exempt from stamp duty (see Table 3); and
 owners of vehicles exempt from stamp duty (see Table 4).

Different vehicle names and classifications used in each jurisdiction make comparison
difficult. There were also circumstances where a significant number of specific
organisations were reported as being exempt from duty, these were grouped in general
categories. It appears that not all exemptions were reported in all jurisdictions but those
referred to the consultant have been reported.

Given that those jurisdictions participating in the stamp duty ‘rewrite’ project have
indicated that they will adopt those exemptions which currently apply in the respective
jurisdictions, it is unlikely that the ‘rewrite’ process will result in any greater degree of
consistency than that which already exists.
Page 8                                                 Review of Stamp Duty and Compulsory Third Party Insurance



Table 3:         Vehicles Exempt from Stamp Duty
Vehicle Type                      NSW        VIC      QLD       WA         SA       TAS        NT       ACT
Fire                                           1
                                                        2
                                                                                                       2
Ambulance                           3        4       2                                              2
Bus > 12 passengers                                                         
Historic/Vintage                                                                                       
Trailer                                         5
                                                                             6


FIRS                                                                                    37         
Tractor base                                            8
                                                                              8
                                                                                       9


Recreation
Wheelchair                                                                                  
Farm vehicles                                  10
                                                                  10
                                                                            10
                                                                                               
Demonstration                                 11
                                                                           
Work Vehicle
Experimental/Research                                                                           
Specific Event                                                                                  
Specialised Equip                    12
                                                                  
Restricted Vehicle (Limited                                      13                 
use and location)
Notes:     1     Restricted exemption – CFA vehicles only.
           2     On the basis that they are Government vehicles.
           3     Ambulance, mine rescue vehicles.
           4     Restricted exemption – St John’s Ambulance vehicles only.
           5     Less than 4.5t tare.
           6     Less than 2.5t tare.
           37    No FIRS vehicles registered.
           48    Eg, tractors, end loaders, boring plants, mobile cranes built on tractor base.
           9     Farm tractors.
           5     Non-professional, recreational vehicles.
           10    Some primary production vehicles.
           11    Restricted exemption – available to LMCT (Licensed Motor Car Trader) retailers and
                 RUCD (Registered Used Car Dealer) retailers.
           12    Incapacitated persons vehicle
           13    Restricted exemption – depends on the design and construction of the vehicle.

                Federal Interstate Registration Scheme. This exemption is only available in limited
                 circumstances in some jurisdictions. See main text below and Table 1 for full explanation.
Review of Stamp Duty and Compulsory Third Party Insurance                                           Page 9



Table 4:            Owners Exempt from Stamp Duty
Owner Type                                      NSW         VIC   QLD     WA    SA      TAS   NT      ACT
Dealer/distributor                                                                               
Repossession                                         1
                                                                                                    
Finance Co. / Hire Purchase                                                          2
Redemption                                                        
Disabled (ex-service)                                                  3                         
Disabled (unable to use public                                          3
                                                                                             4
                                                                                                        
transport)
Veteran Affairs Pensioner                                                      5
Will/deceased                                                   6            6                    
Husband/wife transfer                                              7
                                                                                   8


Divorce                                              9
                                                                    9
                                                                                10          9        
Distribution in specie                                                                 
Joint  single name                                        
Trustee/minor                                               
No change beneficial ownership                                            11           
Gift/family                                                       12
                                                                                               
Name change                                                     13
                                                                                       13
                                                                                               
Charitable, religious and/or                                                                      
community14
Water authorities
Local Government                                                                    
State/Territory                                                                           
government/Ministerial
Commonwealth government                                                                              15
Local Boards/ Non-profit                           16
                                                                  17
                                                                                18
                                                                                                        19
Consular                                                                                            20
Schools/Universities                                                           21                     
Primary producer                                            22
                                                                  23


Nature Reserves                                                           
Equity                                            1
Corporate Reconstructions                                   
Conditional Registration                                                        
Regional Health Authority                                         24



Notes:      1       Under NSW ‘rewrite’ legislation.
            2       Return of Hire Purchase vehicle.
            3       Exemption only available on light vehicles.
            4       Available if totally and permanently incapacitated. The person need not necessarily be
Page 10                                               Review of Stamp Duty and Compulsory Third Party Insurance



               unable to use public transport.
          5    Only if receiving Totally and Permanently Incapacitated benefits at a rate not less than 75%
               of the rate for total incapacity.
          6    $4 fee in SA and $2 fee in QLD.
          7    Provided transfer is by way of gift
          8    Only if marriage or defacto relationship is irretrievably broken down.
          9    Marriage dissolution or annulment, direction under the Family Law Act 1975 (Cth), defacto
               partners.
          10   In some cases.
          11   $520 duty payable.
          12   Transfer wholly by way of gift between spouses, parents to and children (including
               step-children), but not siblings.
          13   Only for marriage, business names and companies with the same ACN.
          14   Varies across jurisdictions.
          11   Mildura Irrigation Trusts and Sunraysia Water Board, Dandenong Valley Authority,
               authorities under the River Improvement Act, West Moorabool Water Board.
          15   Exemption also available to State and Territory Governments and prescribed authorities,
               and a Commonwealth authority exempt from tax under Territory law.
          16   For example, Aboriginal Land Councils, Agricultural Bureau, Memorial halls, War
               memorials and other charitable exempt organisations.
          17   If administered by Crown eg, electricity, harbour, health.
          18   East Torrens County Board of Health
          19   Hospital school.
          20   Including diplomatic missions.
          21   Public schools only.
          22   As for “farm vehicles” in Table 3.
          23   > 4t load capacity.GVM of 6 tonne or more.
          24   Established under the Health Services Act 1991 (Qld)

The most common circumstances where an exemption will apply continue to include:
 acquisitions by a government body;
 vehicles to be used in primary production;
 vehicle to be used by a range of welfare and charity organisations;
 vehicles to be owned by specific recipients of welfare-type benefits;
 vehicles temporarily owned by motor dealers or distributors; and
 transfers of registration other than by sale (eg divorce settlement, joint names,
  beneficiaries).

2.6.2 The Federal Interstate Registration Scheme
In the 1993 report, the conversion of vehicles registered under FIRS to State or Territory
registration was reported as being exempt from stamp duty in most jurisdictions however,
Queensland and Victoria report that an exemption did not exist at that time. In Victoria
exceptions were made for special circumstances.

This automatic exemption led to the development of practices designed to avoid duty.
Typically, a vehicle would be initially registered under FIRS and immediately converted to
State or Territory registration, a transaction exempt from duty.

This loophole has been closed in New South Wales, Western Australia, South Australia
and the Australian Capital Territory. Consequently, in these jurisdictions, the exemption
noted in Table 3 now only applies to vehicles registered under FIRS, prior to specified cut-
off dates (as set out in Table 1) and where the registered name remains the same. The other
Review of Stamp Duty and Compulsory Third Party Insurance                            Page 11



jurisdictions (Tasmania and the Northern Territory) continue to provide the exemption
(where the registered name remains the same) although some indicated that the removal of
the exemption was being considered.

As noted above, duty will be payable in Queensland where there is a transfer of registration
from another jurisdiction, if duty has not been paid in the other jurisdiction. A limited
exemption to duty in these circumstances applies however, where the registration
transferred is a FIRS registration that existed before 1 July 1995, provided the registration
is the first registration of the vehicle in Queensland and the person in whose name the
vehicle was registered in Queensland is the same person in whose name the vehicle was
registered under the Federal Legislation.
Page 12                                       Review of Stamp Duty and Compulsory Third Party Insurance




3. COMPULSORY THIRD PARTY INSURANCE

3.1 Introduction
CTPI premiums are usually charged annually at the time of registration and renewal of
registration. The CTPI scheme is a compulsory scheme of insurance covering personal
injury to third parties caused by, through, or in connection with, accidents involving
vehicles. The purpose of the scheme is to ensure that victims are compensated even if the
driver is not financially able to pay damages.


3.2 Insurers
There is a single insurer for CTPI purposes in all jurisdictions except New South Wales
and Queensland.

In Victoria, South Australia, Western Australia, Tasmania and the Northern Territory, the
sole insurer is either a government instrumentality, government business enterprise or
government owned. In the Australian Capital Territory the sole insurer is a private
company, NRMA Insurance Ltd. In South Australia claims management has been
outsourced to a private company.

In all jurisdictions (other than South Australia), premium rates require approval by a
government authority. For example, in New South Wales, the insurers must file the
proposed premiums with the Motor Accident Authority (MAA). The MAA has authority to
reject the premium in limited circumstances.

In South Australia, the premiums are determined by the CTP Premium Committee, which
is an independent body with equal representation from the insurance industry and persons
representing owners.


3.3 Premium Levels
CTPI premiums are generally calculated by independent actuarial computations based on
past period claims and the assessment of other relevant data. As noted by one of the
government departments providing information and data for this Report, there is a
significant amount of variation in the design and parameters of CTPI schemes which in
turn affects the calculation of premiums required to fund each scheme. The more
important factors were reported to include:
 whether the scheme is a no-fault scheme;
 the extent to which benefits are determined on a statutory basis or common law basis;
    and
 claim thresholds and the availability of damages for pain and suffering.

Once calculated, CTPI premiums are then set by the relevant insurer (whether government
instrumentality or private). Each jurisdiction has a slightly different procedure for
government authorisation. In Victoria the CTPI premiums are indexed by CPI.

The variation in the levels of premiums is much greater than in 1993. Table 5 shows the
current premiums for the major classes of heavy vehicles. The minimum and maximum
premiums are shown where there is some variation in premium level.
Review of Stamp Duty and Compulsory Third Party Insurance                                                                         Page 13




Table 5:            CTPI Premiums for Selected Vehicles ($pa)
                                                            NSW     VIC       QLD        WA        SA         TAS        NT3       ACT
                   Effective From:                                  1/7/99    1/7/99     1/7/99              1/12/98             1999/2000
Minimum Premium for Trucks
                                              Truck                                       194                            23513
                                       Small truck          5172    1451      28613               18013      239 13+23            514.502
                                                                          4         14                  14
                                       Large truck          1113    304       858                 318         28614              1275.50
                                        Farm truck          219      824       128                 97                            319.5024
Maximum Premium for Trucks
                                              Truck                                       194                            23514
                                       Small truck          6972    2781      28613               29813       23913               514.502
                                       Large truck          1506    4044      85814               48514       28614              1275.50
                                                                          4
                                        Farm truck          296     124        128                141                            319.5024
Minimum Premiums for Prime Movers
                                     Prime mover                     673                  194                            23513
                              Small prime mover             11132             28613               31813      239 13+23            514.502
                              Large prime mover             1113              85814               68014       28614              1275.50
                              Farm prime mover              219      82        80                  97                             319.50
Maximum Premiums for Prime Movers
                                     Prime mover                    1120                  194                            23514
                              Small prime mover             15072             28613               48513      23913                514.502
                                                                                                        14
                              Large prime mover             1507              85814               680         28614              1275.50
Page 14                                                                                                                    Review of Stamp Duty and Compulsory Third Party Insurance




                                                         NSW              VIC            QLD              WA               SA                TAS            NT3              ACT
               Effective From:                                           1/7/99          1/7/99          1/7/99                         1/12/98                           1999/2000
                        Farm prime mover                  296             124             128                             141                                               319.50
Minimum Premiums for Buses
                                         Bus                                                                                                               23519
                                  Small bus              43715           2115             2867            2229           25910           28615a            23518           532.5015
                                  Large bus             278216           2786            10608            144            25911            46816            23519           1692.50
                                                                                                                               12                               18+20
                                 School bus                                               286             144            308                              235
Maximum Premiums for Buses
                                         Bus                                                                                                               66020
                                                               15               5               7               9              10                 15a
                                  Small bus              592              916             286             222            513             286               23520           532.5015
                                  Large bus             376716           14026           16408           1174            84611            46816            66020           1692.50
                                                                                                                                12                               20
                                 School bus                                               286             144            1244                              660
                                                                               22                                                                 17
Trailer                                                   na              na               na              5               na                67              303              na21
Notes:    1    Less than or equal to 2t carrying capacity.
          2    Less than or equal to 2t tare.
          3    FIRS vehicles are subject to higher premiums due to potentially higher liability if a crash occurs in another jurisdiction.
          4    Greater than 2t carrying capacity.
          5    Less than or equal to 9 seats (including driver).
          6    More than 31 seats (including driver). Rate varies by number of seats between 10 and 31.
          7    Less than or equal to 7 passengers.
          8    $310 plus $30 per passenger in excess of 7 or $290 + $54 per passenger in excess of 7
          9    7 or less persons.
          10   Up to 12 seated persons.
          11   Between 13-35 seated persons.
Review of Stamp Duty and Compulsory Third Party Insurance                                                                                  Page 15




            12      More than 35 seated persons.
            13      Less than or equal to 4.5t GVM.
            14      Greater than 4.5t GVM.
            15      Less than or equal to 16 persons including the driver (for hire or reward).
            15a     No less than 9, and no more than 16 passengers (for hire or reward).
            16      More than 16 passengers.
            17      Unladen mass exceeds half a tonne.
            18      Less than or equal to 30 persons (including driver).
            19      Used for private purposes.
            20      Used for fare-paying passengers.
            21      Legislative amendment currently being prepared to ensure trailers are covered by insurance policy of towing vehicle.
            22      FIRS trailers pay $20.
            23      A 20% pensioner discount is available – a premium of $191.00 applies.
            24      Greater than 2t tare. $213.50 for less than 2t tare.
Page 16                                         Review of Stamp Duty and Compulsory Third Party Insurance




3.3.1 Location
In the following States, premiums vary with the location of registration as follows:
 in New South Wales, there are four geographical areas, being Sydney metropolitan,
   Newcastle, Wollongong and elsewhere with premiums descending in that order;
 in Victoria, there are three geographical regions (metropolitan Melbourne, outer
   metropolitan Melbourne, and other areas) with risk and premiums descending in that
   order;
 in South Australia, vehicles garaged, kept or operated within metropolitan postcodes
   generally pay higher premiums than those outside this area;
 in Queensland, certain buses used within 350 kms of a nominated base are subject to a
   different premium than those used outside the area. This is a change from the position
   in the 1993 report; and
 in Western Australia, there are two geographical areas for large buses (metropolitan
   within 40 kms of Perth GPO and country).

In Tasmania, the Northern Territory and the Australian Capital Territory, the premium does
not vary by location.

3.3.2 Vehicle Use
In several jurisdictions, premium levels will also vary according to the use to which the
vehicle is put. In Victoria, Tasmania and the Northern Territory, where a vehicle is used
for private purposes, the premium is lower than if the vehicle is used for a commercial
purpose. In Queensland, premiums for buses used for charitable, non-commercial or
recreational activities are generally lower than those for vehicles used for commercial
purposes. In South Australia, vehicles used to transport passengers free of charge
(generally charities, retirement villages) attract lower premiums.          Similarly, in
Western Australia, premiums differ depending on how vehicles are categorised by body
type and/or use.

In New South Wales, the maximum/minimum premiums are not affected by vehicle use
but some insurers will take use into account in determining a premium.

In the Australian Capital Territory, there were no differences reported in the premium level
in respect of vehicles used for different purposes.


3.4 Coverage
Insurance coverage varies between jurisdictions.       The variations fall into three broad
categories which are discussed below.
                                                                                                            Formatted: Bullets and Numbering
1.1.13.4.1 Registered Vehicles
Four States reported exemptions from CTPI for registered vehicles:
 in New South Wales - trailers. The trailer is covered by the towing vehicle’s insurance;
 in Victoria - trailers;
 in Queensland - trailers and wheelchairs. Trailers registered under the Interstate Road
  Transport Act 1985 are not exempt;
Review of Stamp Duty and Compulsory Third Party Insurance                            Page 17



 in Tasmania - trailers with an unladen mass not exceeding 500 kg; and
 in the Australian Capital Territory, no premium is charged for trailers, however, it is
  proposed that the legislation be changed to bring the Australian Capital Territory in line
  with New South Wales in this regard.

There were no exemptions from CTPI reported in respect of registered vehicles in the other
States or Territories.

3.4.2 Unregistered Vehicles
Subject to the following exceptions, unregistered vehicles are generally not permitted to
use the road system without CTPI:
 in New South Wales, a number of vehicles were indicated, including invalid motorised
   wheelchairs, farm vehicles with only minor road use, motor vehicles affixed with trade
   plates, bush fire brigade motor vehicles which travel on a public road for the purpose of
   conveying people or equipment to a fire or fire break;
 in Victoria, exempt trailers are permitted to use public roads and all unregistered
   vehicles may travel to a registration office by the most direct route for the purpose of
   becoming registered;
 in Tasmania, a trailer being used for agricultural purposes and towed by a self propelled
   agricultural machine;
                                                                                                Formatted: Bullets and Numbering
 in Western Australia, unregistered agricultural implements may be towed by a registered
   vehicle;
 in the Northern Territory, all vehicles are permitted to travel to a motor registry without
   registration and insurance (which is regarded as part of the process of being
   "registered"); and
 in Queensland, exempt trailers, wheelchairs and fire engines are permitted to use public
   roads.

The following unregistered vehicles were reported as being required to hold CTPI:
 in New South Wales, Western Australia, Queensland and Victoria, those with an
  unregistered vehicle permit. In Victoria, vehicles that operate on an unregistered vehicle
  permit do so with a pro-rata CTPI. In Queensland, unregistered vehicles travelling to a
  motor registry for the purpose of becoming registered;
 in Tasmania - off-road and recreational vehicles;
 in the Northern Territory - temporary licensed vehicles (unregistered vehicle permits),
  pastoral vehicle permits, Commonwealth vehicles and dealers plates; and
 in the Australian Capital Territory - any unregistered vehicle to be driven on a public
  road.

3.4.3 Motorised Vehicles
Motorised vehicles that can use the road system without CTPI are generally included in
categories above. Additional motorised vehicles which are not required to hold CTPI were
reported as follows:
 in New South Wales - vehicles used on a railway or tramway (other than a light trail);
Page 18                                          Review of Stamp Duty and Compulsory Third Party Insurance



 in Victoria - ride-on lawn mowers, golf buggies, motorised wheelchairs that do not
  exceed speeds of 10km/h;
 in Queensland - agricultural machinery, road making machinery, fire engines and
  power-assisted pedal cycles;
 in Tasmania - ride-on lawn mowers with 6 kilowatts or less engine capacity and power-
  assisted bicycles propelled by a detachable engine not exceeding 200 watts;
 in South Australia, self propelled wheelchairs and lawn mowers may be driven upon a
  road without registration or insurance, subject to certain conditions; and
 in the Australian Capital Territory - motor vehicles and trailers owned by the Territory
  or Territory authority or by the Commonwealth or a Commonwealth authority.

While there are variations in the responses from those reported in the 1993 report, these
variations did not generally affect commercial goods carrying or passenger vehicles.

Where a vehicle is exempt from CTPI, either because it is unregistered or exempt, the
owner/operator generally bears the risk in the event of an accident. Accordingly, common
law rules will generally apply and in some jurisdictions, a nominal defendant arrangement
will apply. In Queensland, if vehicles are unregistered or exempt from CTPI (eg. fire
engines), owners are encouraged to obtain public liability insurance from private insurers.
Similarly, in Victoria, South Australia and Tasmania, owners are encouraged to obtain
public liability insurance from private insurers. In some circumstances, due to the nature of
the vehicle (eg. motorised wheelchair), household insurance may cover any accidents
involving the vehicle.


3.5 Stamp Duty on CTPI Premiums
Stamp duty is payable on CTPI premiums in five of the States, being Victoria, Queensland,
Western Australia, South Australia and Tasmania.

An amount per premium is payable in Queensland (10 cents) and Western Australia
(25 cents).

Stamp duty is considerably more in Victoria (10% of premium), South Australia ($1560
per annual premium) and Tasmania ($6 per annual premium). There were limited
exemptions reported. For instance, in South Australia where the vehicle is conditionally
registered (ie, farm tractors), no duty is levied on the CTPI.

The only change since the 1993 report is that stamp duty is now payable on a CTPI
premium in Victoria, and while stamp duty is not payable on premiums in the Australian
Capital Territory, a Road Safety Contribution, levied at a flat rate of $1.50 per vehicle, has
been included in premiums since 1 July 1998.


3.6 Registration Transfer

3.6.1 Between Owners
A new CTPI policy is not required to be taken out in any jurisdiction when registration is
transferred between owners within the jurisdiction, ie the policy remains with the vehicle.
However, a change of policy category may be required. This has not changed since the
1993 report.
Review of Stamp Duty and Compulsory Third Party Insurance                           Page 19



Previously, the following time limits were reported on transfer of registration between
owners (on purchase or disposal):
 7 days in Victoria;
 14 days in Queensland, Tasmania, South Australia, Northern Territory and the
   Australian Capital Territory; and
 28 days in Western Australia.

All States and Territories have now adopted the 14 day period specified in the Road
Transport Reform (Heavy Vehicles Registration) Regulations.

3.6.2 Between Jurisdictions
As was the position in the 1993 report, when the registration is transferred to another
jurisdiction, a CTPI policy within the new jurisdiction is required.

The time limits for such a transfer are as follows:
 in New South Wales a vehicle should immediately obtain a CTPI policy and registration
  if it is brought in for permanent use. If it is brought into New South Wales for
  temporary use, it need not do this for three months;
 in Victoria, Tasmania, the Northern Territory and the Australian Capital Territory a
  three month time limit on transfer applies;
 in Queensland the transfer is required as soon as the vehicle owner takes up permanent
  residence;
 in Western Australia the CTPI policy must be immediately transferred if the owner is
  taking up permanent residence; and
 in South Australia the transfer is required as soon as practical; and
                                                                                               Formatted: Bullets and Numbering
 . in Victoria there is no time limit.

Vehicles may be exempt from the requirement to obtain a new CTPI policy on the basis of
a limited stay in the State or Territory. Tasmania and the Australian Capital Territory have
moved to a three month time limit for transfers since the 1993 report. Therefore, 50% of
jurisdictions now have a three month time limit for transfers to other jurisdictions.


3.7 Other Issues
There are also differences in the CTPI requirements for overseas visiting vehicles across
the jurisdictions. In New South Wales, an unregistered vehicle permit must be obtained
where the vehicle is registered in the overseas country. Accordingly, a pro rata CTPI will
be payable in respect of the period the overseas visiting vehicle is in New South Wales. In
Victoria, South Australia, Western Australia and the Australian Capital Territory, CTPI
premiums are payable on a pro rata basis. Each of the jurisdictions allows pro rata cover
up to 12 months, at which time the vehicle is to be registered in the jurisdiction.

In Queensland, an overseas vehicle permit together with a certificate of insurance must be
obtained. While the overseas vehicle permit is a temporary measure, which can apply for
up to 12 months, the usual practice is to provide one for a maximum of three months. In
Tasmania, if the overseas vehicle is in the State for less than three months, no CTPI
coverage is required. Any accident involving a Tasmanian vehicle during this period will
Page 20                                         Review of Stamp Duty and Compulsory Third Party Insurance



be covered by the other vehicle’s insurance. The overseas vehicle must be registered and
CTPI taken out after three months.

No further issues, other than variations in rates, exemptions and dutiable values which have
been dealt with above, were reported by any jurisdiction.
Review of Stamp Duty and Compulsory Third Party Insurance                               Page 21




4. ASSESSMENT OF DIFFERENCES AND ISSUES

4.1 Introduction
There are clear differences between States and Territories in the levels of stamp duty and
CTPI premiums and their application. There have also been some changes since the 1993
report which may impact on decisions about the location of registration.


4.2 Stamp Duty Rate

4.2.1 New Vehicles
The rate of stamp duty varies by one percentage point between jurisdictions (2% to 3%) for
new vehicles. There are now only two only three States, Victoria (2.5%), and Queensland
(2%) and Western Australia (2.5%) which levy the lower rates. All other States and
Territories now levy duty at a uniform rate of 3%. However, New South Wales will reduce
its rate from 3% to 2.5% from 1 July 1999.

This is a significant change from the 1993 report, where New South Wales, the Northern
Territory and the Australian Capital Territory also levied stamp duty at lower rates.

Accordingly, while the number of jurisdictions in which stamp duty savings can be
achieved have diminished (so that the option of "shopping around" is restricted) there is
still an incentive to initially register a vehicle in Queensland, Western Australia or Victoria,
rather than any of the other States and Territories, and subsequently transfer the registration
to another State/Territory. This incentive increases with the value of the vehicle purchased.
To illustrate the effect of the stamp duty differentials, Table 6 sets out a sample of the
differences in stamp duty payable based on representative vehicle values. As the values are
used to demonstrate the range of stamp duty differential, a low and high value for each
category of vehicle has been used. These values have been based on information provided
by various dealers, who advised that in each category there is generally a wide price range.
Page 22                                                   Review of Stamp Duty and Compulsory Third Party Insurance



Table 6:            Stamp Duty Payable at Various Rates by Vehicle Type1
              VEHICLE                   VEHICLE                        STAMP DUTY ($)
                                                                2
                TYPE                     VALUE             2%            2.5%3             3%4             4%5

    Rigid Truck
                      Low Value            70,000         1,400           1,750           2,100           2,800
            (2 axle approx. 12 t)
                     High Value           205,000         4,100           5,125           6,150           8,200
                   (4 axle > 20t)
    Prime Mover
          2 Axle           Low            100,000         2,000           2,500           3,000           4,000
                           High           180,000         3,600           4,500           5,400           7,200
          3 Axle           Low            160,000         3,200           4,000           4,800           6,400
                           High           280,000         5,600           7,000           8,400         11,200
    Semi Trailer
                           Low             30,000           600             750             900           1,200
                                 6
                          High            130,000         2,600           3,250           3,900           5,200
    Bus
                           Low            150,000         3,000           3,750           4,500           6,000
                           High           450,000         9,000         11,250          13,500          18,000

1         Flat rates in Table 2 are used to calculate duty payable. Amounts may vary due to stepped rates in
          some jurisdictions.
2         Applies in QLD only.
3         Applies in VIC and WA. Will apply in NSW from 1 July 1999.
4         Applies in NSW, SA, TAS, NT and ACT.
5         Applies in VIC for secondhand vehicles only.
6         High cost refrigerated trailer.

Accordingly, if a vehicle was registered in Queensland rather than New South Wales, a
benefit of:
 $700 would be available on a $70,000 vehicle (eg low value truck);
 $1,800 would be available on a $180,000 vehicle (eg high value 2-axle prime mover);
  and
 $4,500 would be available on a $450,000 vehicle (eg high value bus).

The difference in stamp duty would also be affected in New South Wales, Victoria and
Tasmania, which each impose higher rates of duty (New South Wales and Victoria 5%;
Tasmania 4%) on high value passenger vehicles which are designed to carry not more than
8 persons (9 for New South Wales). Imposition of duty at these higher rates would result
in a 3% differential of stamp duty on some higher value small buses.

Generally, a choice of jurisdiction would only be available to those businesses which have
offices in a number of States/Territories, including the lower levying States of Queensland,
Western Australia and Victoria. However, as indicated in the 1993 report, it is also the
Review of Stamp Duty and Compulsory Third Party Insurance                            Page 23



vehicles used by these types of businesses which could be expected to be of a higher value
and therefore gain most from the differences in rates.

4.2.2 Secondhand Vehicles
A difference in stamp duty rates also occurs between jurisdictions in relation to secondhand
vehicles. The rate of duty is the same as for new vehicles in all States and Territories
except Victoria. In Victoria, duty is levied at the rate of 4%. This rate results in a
differential of 2% between Victoria and Queensland in respect of secondhand vehicles.

Table 6 also illustrates the stamp duty differential due to the 4% rate. For the purposes of
the Table, the 4% rate has been applied to the new vehicle values and not a value adjusted
to reflect the secondhand value.

Accordingly, twice the duty would be payable if the secondhand vehicle was purchased and
remained registered in Victoria rather than Queensland. For secondhand vehicles sold at
the higher values, this differential could be quite significant (for example, if a vehicle is
sold secondhand for $160,000, the difference would be $3,200).

Consequently, an incentive exists to transfer registration of any secondhand vehicles from
the Victorian registration system on purchase. During discussions with one Victorian
dealer, the dealer indicated that the 4% rate in Victoria was a factor taken into account by
purchasers when determining the State/Territory of registration, where another
State/Territory was available to the purchaser.


4.3 Compulsory Third Party Insurance Premiums
Table 7 shows the maximum CTPI premiums by State or Territory for heavy vehicles. The
differences between CTPI premiums continues to be an area in which there is significant
diversity among the jurisdictions.

The four broad vehicle categories used in the assessment of insurance premiums on heavy
vehicles are rigid truck, prime mover, trailers and buses. As illustrated in Table 5, in some
jurisdictions, there is no variation in premiums for vehicle size (eg Western Australia and
the Northern Territory). In other States, there is a significant variation in the premium
based on vehicle size. For example, in New South Wales a variation of $1,287 exists
between the lowest and highest premium for rigid trucks. Note however, that in New
South Wales there is no longer any variation in premium between small and large prime
movers, but the variation remains between those that are classified as farm prime movers
and those that are not. In most jurisdictions (except Victoria and South Australia), there is
generally no difference in premiums between rigid trucks and prime movers. In all States
and Territories, small buses generally have lower premiums than large buses.
Page 24                                         Review of Stamp Duty and Compulsory Third Party Insurance



Table 7:          Maximum CTPI Premiums by Vehicle Type and Jurisdiction ($pa)
Vehicle Type          NSW      VIC     QLD          WA        SA         TAS           NT          ACT
Rigid Truck            1506     404      858        194        485          286         235      1275.50
Prime Mover            1507    1120      858        194        680          286         235      1275.50
Trailer                   0       0        0           5           0          69          30                0
Bus
          small         592     916      286        222        513          286         235        532.50
          large        3767    1402     1640        1174      1244          468         660      1692.50

The variations in maximum premiums between the jurisdictions is shown in Table 8.


Table 8:          Differences in Maximum CTPI Premiums between Jurisdictions
                  between 1993 premiums and current premiums
                                           1993                              Current
 Rigid Trucks                                374                                   1312
 Prime Movers                              1000                                    1313
 Trailers                                      47                                    69
 Small Buses                                 780                                    694
 Large Buses                               1271                                    3299

As with the position in the 1993 report, the largest differentials are for large buses and
prime movers, both of which are commonly used on interstate work. However, there is
now also a significant difference between rigid trucks.

These differences could provide an incentive to register in jurisdictions with lower
premiums. Western Australia continues to be a low premium jurisdiction, particularly in
relation to large trucks and prime movers. However, as suggested in the 1993 report, the
remoteness of Western Australia is likely to reduce the ability or incentive to register in
that State to take advantage of the lower premiums.

Tasmania and the Northern Territory have moved closer to the other States and Territories
in terms of the premium levels but continue to remain at the lower end of the premium
scales.

For large rigid trucks, the premiums in New South Wales ($1,506) and the Australian
Capital Territory ($1,275.50) are significantly more than Queensland ($858), the next
nearest State.

For large prime movers, the premiums in New South Wales ($1,507), Victoria ($1,120)
and the Australian Capital Territory ($1,275.50) are significantly more than Queensland
($858), the next nearest State.

For large buses, the premium in New South Wales ($3,767) is significantly more than the
premiums in the Australian Capital Territory ($1,692.50), Queensland ($1,640) and
Review of Stamp Duty and Compulsory Third Party Insurance                                      Page 25



Victoria ($1,402). Tasmania ($468) has the lowest premiums for large buses. However,
due to the relative remoteness of Tasmania, the opportunity to register in Tasmania to take
advantage of the lower premiums is likely to be limited.

There are significant differences between minimum and maximum premium levels in New
South Wales, Victoria and South Australia (see Table 9). The differences have, in most
cases, increased since the 1993 report. Therefore, there is now a greater incentive to take
advantage of such variations within States and Territories.


Table 9:            Differences between minimum and maximum CTPI Premiums within
                    Selected States ($pa)
                                                   NSW                    VIC                 SA
                                            1993            1998   1993         1998   1993        1998
 Trucks
                          Small               75            180     103         133     71         118
                          Large               73            393     135         100     94         167
 Prime Movers
                          Small               75            394     452         447     71         167
                          Large               73            394     452         447     94           0
 Buses
                          Small               32            155     711         705    651         254
                          Large             774             985    1132         1124   651         587

Finally, the significant increase in CTPI premiums in some jurisdictions also highlights that
rather than moving toward consistency, there is a move away from it. Table 10 shows the
increase in maximum CTPI premiums in dollar and percentage terms. The table has been
ordered to show the States/Territories in order moving from the highest increase to lowest
increases. The Australian Capital Territory and New South Wales had the highest increase.
Each of these jurisdictions also increased the stamp duty rate during the period.
Page 26                                                                                                               Review of Stamp Duty and Compulsory Third Party Insurance




Table 10:        Increase in Maximum CTPI Premiums by Vehicle Type and Jurisdiction between 1993 and 1999 (in $pa and % change) 1
    VEHICLE                 ACT                 NSW              TAS 2               SA                 QLD                 WA                  NT                     VIC
     TYPE

                        $              %    $         %      $       %         $          %         $         %        $         %          $         %           $          %

Rigid Truck         925.50         264     1022    211     134       88       215          80     353         70      63         48         50        27           -4        -1

Prime Mover         925.50         264     1023    211     134       88       410         152     353         70      63         48         50        27        989       755

Trailer                     -          -     -        -      24      56        -14        -100      -         -        -1      -16              6     25           -         -

Bus
    Small           392.50         280      377    175     134       88        na3        na3     105         58      23         12         50        27           -9        -1

    Large           1132.5         202     2262    150     222       90         51          6     634         63     327         39       140         27         -12         -1
                         0

1     This Table is compared to the maximum premiums in Table 3.1 of the 1993 report.

2     The 1993 CTPI premiums used to calculate these figures were not those in the 1993 Report, rather the CTPI premiums used were those reported by the Motor Accidents
      Insurance Board of Tasmania, and are as follows:
         Rigid Truck           $152
         Prime Mover           $152
         Trailer                $43
         Small Bus             $152
         Large Bus             $246
                                                                                                                                                                                  Formatted: Bullets and Numbering
23 In the 1993 Report separate premiums were not quoted for small and large buses in South Australia.
Review of Stamp Duty and Compulsory Third Party Insurance                          Page 27




4.4 Stamp Duty Rates and CTPI Premiums
The combined effect of rates of stamp duty and CTPI premiums may reduce or eliminate
some differences. However, as many States and Territories now impose stamp duty at the
same rate and stamp duty is only payable once on the initial acquisition, the amount of the
CTPI premium is more likely to affect any registration decision.

Table 11 shows differences in stamp duty and CTPI by vehicle type using Queensland as a
base. Queensland was chosen because it has the lowest stamp duty rate and CTPI
premiums were in the medium range. Premiums for the States and Territories have been
ordered to show the greatest to lowest differences. A comparison with Victorian
secondhand duty has also been included.
Page 28                                                                                                                         Review of Stamp Duty and Compulsory Third Party Insurance



Table 11:          Differences Relative to Queensland in Stamp Duty and CTPI Premiums Available1

VEHICLE TYPE                                   NSW            ACT             SA           TAS            NT            WA                    VICTORIA
                                                                                                                                        New       Secondhand
RIGID TRUCK
     Low Value (2 axle approx. 12t)             1348         1170.50          327            128             77          -314            -104                   946
          High Value (4 axle > 20t)             2698         2467.50         1677          1478           1427            361             921                 3646
PRIME MOVER
                   2 axle         Low           1649         1417.50          822            428           377           -164             762                 2262
                                  High          2249         2217.50         1622          1228           1177            236           1162                  3862
                   3 axle         Low           2249         2017.50         1422          1028            977            136           1062                  3462
                                  High          3449         3217.50         2622          2228           2177            736           1662                  5862
                       2
SEMI TRAILERS
                                  Low             900            900         9003            969           930            755            7504                 12004
                                  High          3900            3900         3900          3969           3930           3255           3250                  5200
BUS
                           Small/Low5           3848         1688.50         1669          1442           1391           6287           1322                  3572
                           Large/High           6627         4552.50        -9396          3328           3520           1784           2012                  8762
1         A negative indicates the amount payable is lower than in QLD.
2         Trailers are exempt from stamp duty in QLD.
3         Assume  2.5t so not exempt from stamp duty.
4         Assume > 4.5t so not exempt from stamp duty.
45        Assuming bus holds 8 passengers (not including the driver). QLD CTPI calculated as $290 + (APSC-7) x 54 (where APSC is 8) = $344. Therefore above calculations based on max       Formatted: Bullets and Numbering
          CTPI of $344 and not $286.
5         Stamp duty calculated at $1350 + 5% excess over $45,000 because passenger car.
6         No stamp duty payable on buses with  12 passengers.
7         Large bus as  7 passengers for CTPI.
Review of Stamp Duty and Compulsory Third Party Insurance                             Page 29



The comparisons indicate that the reduced stamp duty rate in Queensland, together with
moderate CTPI premiums, creates a significant difference so that in all circumstances,
except for a large South Australian bus (seating more than 12 persons), savings could be
made by registration of the vehicle in Queensland. The exemption from stamp duty in
Queensland in relation to trailers accentuates the differences in respect of trailers.

The jurisdictions now appear to fall into three distinct groups:
 New South Wales and Australian Capital Territory, with high stamp duty and high
  CTPI;
 South Australia, Tasmania, Northern Territory and Western Australia, which have high
  stamp duty and medium to low premiums; and
 Victoria and Queensland which have low stamp duty and moderate premiums.


4.5 Stamp Duty Exemptions
Significant differences in exemptions for stamp duty continue to exist between the
jurisdictions. However, as was the position in the 1993 report, as many of these
exemptions do not apply to commercial vehicles, they are unlikely to have any substantial
impact on the location of registration of freight and passenger carrying vehicles.

There are four main exemptions which will affect heavy vehicles:

4.5.1 South Australian Buses
A major exception to this continues to be the exemption of buses which seat more than 12
passengers in South Australia. As duty is levied at the rate of 3% in South Australia, this
can cause substantial savings in respect of the higher valued large buses (as illustrated in
Table 11).

4.5.2 FIRS
The transfer of registration from FIRS to a particular State or Territory is no longer exempt
in New South Wales, Western Australia, South Australia and the Australian Capital
Territory. In each of those jurisdictions, and in Queensland and Victoria, there are limited
exemptions for vehicles registered under FIRS prior to specified cut-off dates (as set out in
Table 1), provided the registered name remains the same.

The rate at which duty will generally be levied is 3%. In Victoria, because the vehicle will
have been previously registered, the applicable rate is 4%. In Queensland, the applicable
rate will be 2%. The exemption still remains in Tasmania and the Northern Territory.

This inconsistency will lead to benefits if the FIRS registration is moved to a
State/Territory which still provides an exemption from stamp duty. For example, if a FIRS
registered vehicle was registered in the Northern Territory, rather than Victoria, a saving of
4% would apply.
Page 30                                                 Review of Stamp Duty and Compulsory Third Party Insurance



4.5.3 Trailers
Trailers also continue to be exempt from duty in Queensland. This exemption will
accentuate the stamp duty differential to other jurisdictions in respect of trailers (as
illustrated in Table 11). In South Australia and in Victoria the exemption applies where the
trailer is less than 2.5 tonnes tare and 4.5 tonnes GVM, respectively.

4.5.4 Special Equipment
In Western Australia, there is also an exemption available in respect of eligible vehicles
(including among others, mobile cranes and tractor plant) to which specialised plant and
equipment is affixed. In certain circumstances, the market value of the eligible vehicle will
be determined as if the specialised equipment was not attached to the vehicle.


4.6 Value for Stamp Duty Purposes
The value for stamp duty purposes varies due to a number of differences. A summary of
the applicable value for stamp duty purposes is provided in Table 12.

Table 12:        Taxable Value for Stamp Duty
                                      NSW       VIC      QLD         WA        SA       TAS      NT        ACT
Market Value                             -        -            6
                                                                                  6
                                                                                                  -          -
List Price1
                                         -        -                   -                -         -          -
Greater purchase price/market                                       -                 -          2a
                                                                                                             
value2
Notional sales tax (add back)3          X4                 X                 X        -         -          -
Additions/Optional                       -                                      8
                                                                                        -   5
                                                                                                            
Equipment
Delivery Charges                         -                 -                  -       -        -         
Fleet Discounts (add back)               -        X         -         X    7
                                                                                       -         -         
Other Discounts (add back)               -        X         -         X7               7-        -          -
Finance charges, registration            -        X         -         X         -        -         -         X
fees, insurance premiums, etc.
Notes:    1      List price used where not previously registered and list price available.
          2      Greater of purchase price and market value used where previously registered or no list price
                 available.
          2a     Purchase price if at arm’s length, market value in any other case.
          3      Notional sales tax added back where sales tax not paid because an exemption applied.
          4      Effective 24/06/1997 in anticipation of NSW ‘rewrite’.
          5      While not specifically stated to include optional equipment, as a matter of practice market
                 value appears to take into account any optional equipment on vehicle at the time of
                 purchase.
          6      Market value applies in any other case.
          7      Only if discount freely available to all purchasers.
          8      Only power steering and a particular type of transmission are included for stamp duty
                 purposes. Body work or accessories fitted to the vehicle by the dealer/retailer are excluded
                 when determining market value.
Review of Stamp Duty and Compulsory Third Party Insurance                            Page 31



All State/Territories (except New South Wales and South Australia to a lesser extent and
Tasmania) include any optional equipment or accessories purchased with the vehicle in
determining the taxable value. Although the responses did not indicate that accessories and
optional equipment were included in calculating the market value in New South Wales and
Tasmania, it appears that, as a matter of practice, this is the position.

In Queensland, the market value of a new truck is taken as the Brisbane list price of a cab
and chassis plus optional equipment, including the price of the tray and body. In
South Australia, the dutiable value of a new heavy vehicle (>3t GVM) is the purchase price
paid for the cab chassis section and any factory options fitted to the vehicle on delivery by
the manufacturer or importer to the retailer. Body work and accessories fitted to the
vehicle by the dealer/retailer are excluded.

In the 1993 report fixed equipment was specifically excluded in the Northern Territory.
This position has since changed so the Northern Territory now conforms with the practice
in other jurisdictions.

A substantial difference could occur as a result of the exclusion of sales tax from the value
for stamp duty purposes. In Victoria, ,Western Australia and Tasmaniaand the , sales tax is
included in the appropriate value, even if the purchaser of the vehicle is entitled to an
exemption. There is no requirement to add back any sales tax in New South Wales,
Queensland or South Australia if an exemption applies. In the Northern Territory there is
no requirement to add back sales tax in the case of a sale and purchase between parties who
are at arm’s length. As sales tax is not generally payable on secondhand vehicles, the
impact of sales tax should only affect the purchase of new vehicles. The general rate of
22% will apply to commercial vehicles.

The impact of this difference will be diminished if the vehicle subject to the sales tax
exemption is also entitled to an exemption from stamp duty (for example, vehicles for
primary production/agricultural use, motor vehicles for disabled veterans, ambulances).
However, without a detailed examination of the various exemptions relative to both sales
tax and stamp duty, the extent of the impact is difficult to determine.

Further, it is not clear whether the requirement to include any sales tax not paid by the
purchaser only relates to exemptions which apply to the particular purchaser, or includes all
exemptions. For example, the purchase of a passenger bus used mainly in transporting
passengers for reward, and providing seating for 12 or more adults, is exempt from sales
tax but subject to stamp duty in all States and Territories except South Australia.
Similarly, an exemption from sales tax exists for the tanks on a bulk milk tanker which
would generally be included in the value for stamp duty purposes. Because all purchasers
are exempt from sales tax, it would seem inappropriate to include sales tax in calculating a
market value. However, if sales tax on such a vehicle was to be included, this would
significantly increase the value on which duty is payable in Victoria, Western Australia and
Tasmania. With the abolition of sales tax from 1 July 2000 however, this issue is not
expected to be significant for very much longer.
Page 32                                         Review of Stamp Duty and Compulsory Third Party Insurance



4.7 Vehicle Categories
The inconsistency in the vehicle classification systems used for CTPI (as shown in Table 5)
has not changed since the 1993 report. All definitions for buses continue to be based on
seating capacity (some including and some excluding the driver) with considerable
differences in the capacities used.

The definitions for truck size continue to include references to tare, carrying capacity and
gross vehicle mass.

There have been a number of changes to the definitions of vehicles for CTPI purposes,
including:
 in Queensland, the distinction between small and large trucks has moved from 2 tonnes
   carrying capacity to 4.5 tonnes GVM;
 in New South Wales there are three GVM classes namely, 4.5 tonne GVM or less; more
   than 4.5 tonne GVM but no more than 13.9 tonne GVM and more than 13.9 tonne GVM
   (effective 5 October 1999);
 in Tasmania, a small truck is now one that is less than or equal to 4.5 tonnes GVM,
   which is less than 5 tonnes GVM reported in the 1993 report;
 in South Australia, only vehicles carrying eight or more passengers (excluding the
   driver) were categorised as buses. Premiums are now determined on three levels of
   buses being, up to 12 seated persons, 13-35 seated persons and more than 35 seated
   persons (public municipal omnibuses are categorised separately); and
 in the Australian Capital Territory, buses with less than or equal to six seats (including
   the driver) were treated as small buses in the 1993 report. A small bus is now one
   carrying less than or equal to 16 persons, including the driver (for hire or reward).

As a result of these changes there is now generally three broad categories for determining
the distinction between small and large trucks and prime movers being:
 2 tonnes carrying capacity, which applies in Victoria;
 2 tonnes tare, which applies in the Australian Capital Territory; and
 4.5 tonnes GVM, which applies in Queensland, New South Wales, Tasmania, South
   Australia and the Northern Territory (although there is no difference in premium in the
   Northern Territory). There is a slight variation to this in South Australia where
   4.5 tonnes GVM applies to distinguish light and medium goods carrying vehicles and
   35 tonnes GVM to distinguish medium and heavy goods carrying vehicles. Similarly in
   New South Wales, a further distinction is drawn between medium and large trucks.

Accordingly, only Queensland, New South Wales, Tasmania, South Australia and the
Northern Territory have adopted a classification in line with the Road Transport Reform
(Heavy Vehicles Registration) Act, 1997 of 4.5 tonnes GVM.

In relation to the distinction between small and large buses, only New South Wales and the
Australian Capital Territory are consistent, with a 16 passenger/person distinction. All
other States and Territories have slight variations in their classifications.

In Queensland a "bus" by definition must carry more than eight seated adult persons
(including the driver). The CTPI premium is calculated at $310 plus $30 or $290 + $54 per
Review of Stamp Duty and Compulsory Third Party Insurance                             Page 33



adult passenger seating in excess of seven. However, the premium for a small bus was
reported as $286.

Accordingly, there has been no significant progress toward uniformity in the CTPI vehicle
classifications.


4.8 Coverage
Differences in coverage by vehicle type and registration requirements occur. The major
difference affecting freight and passenger carrying vehicles is that no CTPI is required for
trailers in New South Wales, Victoria and Queensland. This position has not changed
since the 1993 report.

The exemption of trailers registered in New South Wales, Victoria, Queensland and
Tasmania (with unladen mass not exceeding 500 kg) raises issues in relation to insurance
coverage where the trailer is towed by a vehicle registered in South Australia, Western
Australia or the Northern Territory. As CTPI cover is required for trailers in South
Australia, Western Australia and the Northern Territory, the owner/operator of a vehicle
registered in those jurisdictions towing a trailer registered in another jurisdiction will not
necessarily be covered by the towing vehicle’s insurance. Where injury is caused by the
uninsured trailer it is not clear from whom (owner/operator/nominal defendant) that person
may recover.

For example, in South Australia a trailer must be registered. Attached to that registration is
a CTPI policy, however no premium is payable. The insurance covering the towing vehicle
does not, except in limited circumstances in relation to farm machinery and farm
implements, extend to the trailer. Therefore, if a Queensland registered trailer is towed by
a South Australian registered vehicle, the trailer is not covered by the insurance of the
towing vehicle.

Differences still exist between States and Territories with respect to the requirement of
unregistered vehicles to hold CTPI and those unregistered vehicles which may use public
roads without holding CTPI. However, generally the types of vehicles affected by these
differences would not include commercial goods carrying or passenger vehicles and are
unlikely to affect any location of registration decision.


4.9 Registration Transfer
Differences no longer exist in respect of the time in which a transfer of registration to a
new owner or State/Territory must be undertaken. Under the proposal for a national
registration scheme approved by State and Territory Transport Ministers, all jurisdictions
have adopted a 14 day time limit.


4.10 Tax Reform
When the draft Report was initially commissioned, the introduction of a goods and services
tax (GST) was not contemplated. Accordingly, the impact of the GST on stamp duty on
motor vehicle registrations and compulsory third party insurance has not been taken into
account throughout the Report. In summary however, the indirect tax reforms will have the
following effects:
Page 34                                         Review of Stamp Duty and Compulsory Third Party Insurance



 wholesale sales tax will be abolished after 30 June 2000;
 the 10% GST will be imposed from 1 July 2000;
 stamp duty on motor vehicle registrations and CTPI premiums will remain;
 it is anticipated that stamp duty will be calculated on GST-inclusive value but it is not
  certain whether all States and Territories will adopt this approach. If adopted, stamp
  duty differentials may be less pronounced depending on the previous treatment of
  wholesale sales tax;
 technically GST could also be payable on stamp duty. However, it is expected that
  regulations will be released to exclude stamp duty from the GST regime; and
 as a result of the abolition of the wholesale sales tax, it is expected that the price of
  motor vehicles will decrease and that CTPI premiums will increase (although not
  necessarily by a full 10%). Because most purchasers of heavy vehicles will be
  registered for GST purposes, they will be entitled to an input tax credit for purchases of
  motor vehicles and CTPI premiums paid on or after 1 July 2000, which will further
  reduce the “real” cost. However, the input tax credit for new motor vehicles, including
  trailers for prime movers, will not be available if acquired during the year 1 July 2000 –
  30 June 2001 and will be limited to 50% in the following year.

Essentially, the introduction of the GST will impact on the purchase price of heavy
vehicles and CTPI premiums, but the extent of the change cannot be accurately predicted at
this point in time.
Review of Stamp Duty and Compulsory Third Party Insurance                            Page 35




5. UNRESOLVED ISSUES
As highlighted in this report, many of the unresolved issues highlighted in the 1993 report
still remain. A number of these issues are substantive and would require significant work
to achieve a nationally consistent system.

The unresolved issues fit broadly into two categories, those that are likely to affect a
registration location decision and those that are not. Those issues likely to affect a
registration location decision include:
 differences in stamp duty rates - all jurisdictions, except Queensland, Western Australia
   and Victoria, have now moved to a stamp duty rate of 3%. However, while some
   consistency has been achieved, there is still a differential of 1% between Queensland
   and the 3% jurisdictions., and the rate in New South Wales is to be reduced to 2.5%
   from 1 July 1999;
 stamp duty exemptions - South Australia still continues to allow an exemption for buses
   able to carry more than 12 passengers and for trailers with a less than 2.5 tonnes tare.
   Queensland continues to provide an exemption from stamp duty for trailers and in
   Victoria, an exemption applies in respect of trailers weighing less than 4.5 tonnes GVM;
 FIRS exemptions - an exemption from stamp duty continues to exist in some
   jurisdictions, but not in others, where a FIRS registration is transferred to a particular
   State or Territory;
 differences in CTPI premiums - there are increasing differences between the amount of
   CTPI premiums, particularly in relation to rigid trucks, prime movers and large buses,
   due to differences in the design and parameters of CTPI schemes; and
 differences in registration and CTPI requirements for trailers.

Those issues which still could be addressed for consistency but are unlikely to affect a
registration location decision include:
 differences in the determination of the taxable value for stamp duty purposes, including
   the inclusion of optional equipment, sales tax where not paid and the treatment of fleet
   and other discounts;
 reconciliation of vehicle categories and classifications for both stamp duty and CTPI
   purposes;
 other exemptions from the payment of stamp duty; and
 CTPI coverage of unregistered vehicles.
 APPENDIX A:
QUESTIONNAIRE
Appendix A: Questionnaire                                                              Page A1



               STAMP DUTY AND COMPULSORY THIRD PARTY INSURANCE

                                     QUESTIONNAIRE

                            AUSTRALIAN CAPITAL TERRITORY


PART I: CONTACT DETAILS

1.     Please provide the name and contact details of a nominated person in your department who
       can assist with any queries arising from this Questionnaire:

       Name:

       Position:

       Address:




       Telephone:           (   )

       Fax:                 (   )
Page A2                                                                          Appendix A: Questionnaire



PART II: STAMP DUTY

The following questions relate to the stamp duty payable on motor vehicle registrations and CTPI
premiums. Please provide detailed responses where requested and correct any details or omissions
where necessary. If the space provided is not sufficient for this purpose, please attach additional
pages.



2.        The current rate of stamp duty is $3 for every $100 or part thereof.

          (a)     Is this correct?                                                             Yes / No

          (b)     If No, please provide details of the current stamp duty rates being imposed.




3.        Stamp duty will be imposed in the following situations:

          •       On lodgement of new registration

          •       On transfer of registration between owners (whether interstate or not)

          (a)     Is this correct?                                                             Yes / No

          (b)     If No, please provide details.




          (c)     Is stamp duty imposed on transfers of registration from the Federal Interstate
                  Registration Scheme (FIRS) to the Australian Capital Territory?    Yes / No



          (d)     If yes, please provide details of the stamp duty rates being imposed and the
                  conditions of its imposition.
Appendix A: Questionnaire                                                                      Page A3



4.     The value of the motor vehicle upon which stamp duty is to be levied is determined on the
       following basis:

       •         New vehicles

                 Vehicle Registration Tax is payable on the higher of the market value of the vehicle
                 and the purchase price of the vehicle. The applicant for registration provides a
                 statement in writing containing to the best of his/her knowledge the market value of
                 the vehicle, and the purchase price of the vehicle. If any difference exists between
                 the two sums, the reason for this must also be provided.

       •         Transfer vehicles/Sale by licensed dealers

                 Stamp duty is payable on the higher of the market value and the purchase price of
                 the vehicle. The market value includes the actual price of the motor vehicle, the
                 cost of optional extras and accessories, sales tax, delivery fees, over and under
                 allowances on trade-in; but not registration, insurance or finance charges.

       (a)       Is this correct?                                                            Yes / No

       (b)       If No, please provide details.




       (c)       Are there any internal guidelines or practices adopted by your office in determining
                 the appropriate basis for stamp duty?
                                                                                           Yes / No

       (d)       If yes, would you please provide us with details of these guidelines or practices.
Page A4                                                                         Appendix A: Questionnaire



5.        Attachment A indicates the exemptions and exclusions from stamp duty which related to
          vehicle types and owners in 1993. Please indicate whether these exemptions/exclusions are
          still applicable and list any further exemptions/exclusions which may exist.



6.        (a)     Is stamp duty payable on the CTPI premiums?                                 Yes / No

          (b)     If yes, at what rate




          (c)     Are there any exemptions from this stamp duty?                              Yes / No

          (d)     If yes, please list them.




7.        Are you aware of any other differences in the administration of stamp duty on motor vehicle
          registrations in the Australian Capital Territory as compared to other States or Territories?
                                                                                              Yes / No

          If yes, please provide details.
Appendix A: Questionnaire                                                             Page A5



PART III: COMPULSORY THIRD PARTY INSURANCE

8.     (a)       Is there a single insurer in your
                 State or Territory?                                                Yes / No

       (b)       If No, is the insurer government owned?                            Yes / No

9.     (a)       Is the premium set by the insurer?                                 Yes / No

       (b)       Does the premium require approval of a
                 government authority?                                              Yes / No

10.    (a)       Attachment B indicates the insurance premiums which were relevant in the 1993
                 Report.

                 Please insert the current premium in the columns as appropriate.

       (b)       Do the premiums differ by area of address? Yes / No

                 If yes, please provide details




       (c)       Do the premiums differ by vehicle use?     Yes / No

                 If yes, please provide details




11.    Are any registered vehicles exempt from CTPI?        Yes / No

       If yes, please list below or attach a schedule.
Page A6                                                           Appendix A: Questionnaire



12.       Are there any unregistered vehicles which are
          required to hold CTPI?                                                Yes / No

          If yes, please list below or attach a schedule.




13.       Are there any circumstances in which an unregistered
          vehicle can use a public road without being
          covered by CTPI?                                                      Yes / No

          If yes, please explain the circumstances.




14.       Are any motorised vehicles not required to hold CTPI?                 Yes / No

          If yes, please list them.
Appendix A: Questionnaire                                                                    Page A7



15.    (a)       Previously no State or Territory required a new CTPI policy to be taken out when
                 the registration is transferred between owners within a jurisdiction.

                 Has this position changed?                                               Yes / No

       (b)       What is the time limit on transfer of registration and CTPI?




16.    (a)       Previously all States and Territories required a new CTPI policy to be taken out
                 when the registration is transferred to another jurisdiction.

                 Has this position changed?                                               Yes / No

       (b)       What is the time limit on transfer of registration and CTPI?




17.    Are there any differences in practice or administration in this State/Territory not covered by
       the above questions?
                                                                                            Yes / No

       If yes, please provide details.




Thank you for participating.
Page A8                                                                  Appendix A: Questionnaire



                                      ATTACHMENT A

                                 Australian Capital Territory




INSTRUCTIONS:          Please        •    tick 1998 if still exempt.
                                     •    cross 1998 if no longer exempt.
                                     •    add any further exemptions applicable in 1998 in the
                                          space provided.

OWNERS EXEMPT FROM STAMP DUTY

                                       1993                                                1998
Dealer/Distributor
Repossession
Disabled (unable to use public transport)
Will/Deceased
Divorce
Charitable/Religious
Local Board (Hospital, School).




VEHICLES EXEMPT FROM STAMP DUTY:

                                      1993                                                 1998
FIRS
Appendix A: Questionnaire                                                                                                        Page A9


                                                                      ATTACHMENT B
                                                                   Australian Capital Territory

                                                                               1993                                 1998
                                                                   MIN                      MAX        MIN                 MAX

Premium for Trucks
Truck                                                              -                         -
Small Truck                                                        1681                      1681       1681 1681
Large Truck                                                         350                       350
Farm Truck                                                          105                       105

Premiums for Prime Movers
Prime Mover                                                        -                         -
Small Prime Mover                                                  1681                      1681       1681 1681
Large Prime Mover                                                   350                       350
Farm Prime Mover                                                    105                       105

Premiums for Buses
Bus                                                                -                         -
Small Bus                                                          1402                      1402       1681 1681
Large Bus                                                           560                       560
School Bus                                                         -                         -

Trailer                                                             -                             03

Notes:       1.        Less than or equal to 2t tare.
             2.        Less than or equal to 6 seats (including driver).
             3.        Trailers are insured in ACT, but pay no premium.

				
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