The Federal Department of Infrastructure proposes amendments to current legislation to commence charging a levy on operators of canoes and kayaks, which in our view, is not about safety but cost recovery, and in an unfair way by taxing many small businesses larger amounts.
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Australian Maritime Safety Authority (AMSA) email 20 April 2018 :
“In the 2016 consultation—Cost recovery for services under the National System for Domestic Commercial Vessel Safety—it was proposed to exempt unpowered class 4 hire-and-drive vessels (such as kayaks, canoes, dragon boats and small sailing vessels) from the national system levy. Subsequent to those proposals, and based on further work, it is now proposed that these vessels be included in the levy scheme.”
A list of issues
Removal of exemption:
- No justification has been provided for the removal of the exemption
- No justification has been provided why some craft are exempt and other craft are not – for example why is a stand-up paddle board exempt but a single person kayak not
- No cost benefit analysis is provided for the change
- No assessment of the likely impact on business, active recreation, outdoor education experiences and the likely associated increased heath costs of reduced activity, caused by the change, has been provided.
- Represents a tax on small business
- The costs affect fleet owners disproportionately – for example
- in 2022-23 a residential camp offering canoeing as an activity with a fleet of 10 canoes (class 4) being paddled on a small dam on their own property (Area of operation E “smooth waters”) would need to pay $193 x 10 = $1,930pa.
- in 2022-23 a commercial vessel greater than 45m (class 4) with unlimited domestic operations (Area A including extended offshore operations) pays $385pa
- It is likely to make the activity unviable for all operators of canoeing and kayaking including but not limited to residential camps, training providers and outdoor adventure providers including outdoor education providers
- Will impact business sales where a try before you buy system is in place
- Why is the cost of rescue not borne by surfers, paddle boards and surf skis, but is borne by canoeists and kayakers?
Impact of the law
- the tax is likely to drive out of business small tour, third-party activity and education businesses
- concerns for the survey systems and requirements
- while type and location of operation effects the amount of tax paid, the costs still do not reflect accurately the level of risk the activity involves or the likelihood of requiring rescue meaning some operators are cross subsidising other more high risk operations
- low risk fleet operations serviced by State Government agencies (e.g. Police) cross subsidise higher risk maritime operations serviced by AMSA:
- as detailed in the example discussed above, a canoe fleet owner operating on “smooth waters” such as their own property small dam pays more than a large vessel operating in extended offshore operations/unlimited domestic operations
- the canoe fleet owner is highly unlikely to require rescue on the dam while the large vessel is far more likely to require significant search and rescue resources
- canoe and kayaking training will decrease as providers cannot afford the additional cost burden as they are providing effectively “hire and drive” services
- reduced number of canoeing and kayaking ‘training providers’ ironically is likely to see an increase in more inexperienced paddlers undertaking the activity as they lack an appropriate means of obtaining training, therefore increasing the likelihood of more rescues being required. The law paradoxically makes the system less safe unintentionally.
- the increased cost will cause a significant reduction in the availability of canoeing and kayaking as an activity for students as schools will be unable to afford the increase in costs, either due to the cost of the fleet for independant schools or the cost being passed on by their third-party activity providers
- the reduction in ‘supervised outdoor activity’ has significant impacts on active recreation and current state government attempts to encourage a more active lifestyle to reduce obesity and increase heathy lifestyles. Barriers to active recreation is likely to increase the cost burden on the Federal and State health budgets.
Intent of the law
- The funds raised by the law does not appear to offer any benefit or service improvements to kayak and canoe users
- The law has a range of fundamental grey areas that do not appear to be intended which are best address by retaining the exemption. This include but are not limited to:
- Are inflatable kayaks considered rafts or kayaks?
- Is a residential camp operation required to pay the levy on their canoe/kayak fleets
- Are providers of adventure activities including those that provide services to schools who also provide craft to use captured under the law
- Are training providers providing fee for service instruction such as Registered Training Organisations captured under the law?
- Why are independant schools to be charged a levy whilst government schools are exempt?
- The law is designed to cost recover for maritime rescues but operators on inland smooth waters are being taxed even though they are operating outside of Australian Maritime Safety Authority’s (AMSA’s) rescue jurisdiction
- for example the rescue agency is the Police for inland waters in Victoria (refer Emergency Management Manual Victoria – Control and Support Agencies for Response Page 7-3)
- The initial consultation misled the sector by stating an exception would be in place, thereby the sector did not fully engage in the process
- The Authority potentially mislead and provided false information to the sector by advising a specific exemption was in place and not identifying the potential for the exemption to be removed
- The lack of consultation with stakeholders on the removal of the exclusion
- The lack of time to provide sufficiently argued reasoning regarding the removal of the exemption
- The lack of advice to key stakeholders regarding the change.
Have your say
Consultation closes 30 April 2018.
Public consultation submission details are at: https://infrastructure.gov.au/maritime/consultation/index.aspx
UPDATE 26 April
*Unfortunately, we cannot provide any specific advice to you on the operation of the Marine Safety law – How it affects you is likely to depend on your individual specific circumstances.
The following may be of assistance in determining how the Marine Safety law may affect you:
Contact the regulator, AMSA about the workings of “Domestic commercial vessels” law:
WEB CONTACT FORM or call 02 6279 5000.
Check the following links: