The Commonwealth government is the regulator and operator of the National Electricity Market ( NEM ), which
Question:
The Commonwealth government is the regulator and operator of the National Electricity Market (NEM), which transmits power to and from NSW, Victoria, Queensland, South Australia, and Tasmania. The Cth seeks to impose a tax on the use of electricity lines to bring renewable energy from the place of generation to users within the NEM, in order to fund energy storage facilities (such as batteries) required once Australia discontinues the use of coal and gas for power generation.
The Commonwealth Government implements the Energy Transition (Renewable Energy) Act 2022 (Cth), with the following relevant sections:
Section 2:
The object of this Act is to generate income for the construction and operation of energy storage in the National Electricity Market
Section 7:
Users of transmission lines from the renewable energy generation sources to the electricity substation are required to pay an annual tax of $5,000,000 per annum
Section 11:
Users of distribution lines from the electrical substation to end-consumers are required to pay a tax of 2c per kilowatt hour (Kwh) of electricity distributed.
Section 12:
All government-owned commercial entities can deduct the cost of the tax for corporate tax purposes.
RED Energy, a privately-owned energy generator and distributor, argues that the Energy Transition (Renewable Energy) Act 2022 (Cth) is invalid on the following grounds:
1. The Energy Transition (Renewable Energy) Act 2022 (Cth) is invalid since the Commonwealth does not have the power to legislate with respect to the generation of electricity as it is a state plenary power;
2. The tax referred to in ss 7 and 11 is not a tax, but rather a levy for the use of transmission lines, and therefore ss 7 and 11 are invalid;
3. The Energy Transition (Renewable Energy) Act 2022 (Cth) is invalid since the taxation pertains only to electricity generated in Qld, NSW, Victoria, South Australia, and Tasmania, and therefore breaches s 99 of the Australian Constitution;
4. The Energy Transition (Renewable Energy) Act 2022 (Cth) is invalid as it breaches s 55 of the Australian Constitution.
OpenIntro Statistics
ISBN: 9781943450077
4th Edition
Authors: David Diez, Mine Çetinkaya-Rundel, Christopher Barr