Legislative Council Fifty-Fifth Parliament, First Session (55-1) 55 1 Parliament of South Australia Legislative Council published Bills Bills Rail Safety National Law (South Australia) (Fees) Amendment Bill Rail Safety National Law (South Australia) (Fees) Amendment Bill Rail Safety National Law (South Australia) (Fees) Amendment Bill Introduction and First Reading Introduction and First Reading Received from the House of Assembly and read a first time. Second Reading Second Reading The Hon. C.M. SCRIVEN Legislative Council Minister for Primary Industries and Regional Development Minister for Forest Industries The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (18:03): I move: That this bill be now read a second time. I seek leave to have the second reading explanation and explanation of clauses inserted in Hansard without my reading them. Leave granted. I rise to introduce the Rail Safety National Law (South Australia) (Fees) Amendment Bill 2023. This Bill amends the Rail Safety National Law which is contained in the Schedule to the Rail Safety National Law (South Australia) Act 2012. The amendments to the Rail Safety National Law will allow the Office of the National Rail Safety Regulator to be funded by way of a new cost recovery model. The new model will operate nationally, will minimise cross-subsidisation across the various rail sectors, will apply full cost recovery to commercial rail transport operators and will be based on risk and regulatory effort. South Australia is the lead legislator for the Rail Safety National Law. This means that if the Bill passes this Parliament and commences operation, it will apply in all States and Territories, except for Western Australia. The amendments will not apply in Western Australia until they are adopted there by way of mirror legislation, or until Western Australia moves to the application model that applies in the other States and Territories. As South Australia is the lead legislator for the National Law, the Office of Parliamentary Counsel drafted the Bill on behalf of the Australasian Parliamentary Counsel's Committee. The draft Bill was approved late last year by the responsible Minsters of the Infrastructure and Transport Ministers' Meeting through out-of-session voting. I note that Victoria abstained from voting as it was in caretaker at the time. In 2011, the Council of Australian Governments entered into intergovernmental agreements that, among other things, provided that the national regulators for rail safety, heavy vehicles and commercial vessel safety would move to full cost recovery from the industries being regulated. Currently, four Australian jurisdictions (not including South Australia) are not operating at full cost recovery in relation to rail safety. In the current financial year these jurisdictions were required to contribute a total of more than ten million dollars of funding towards the cost of regulating commercial operators. These jurisdictions will no longer be required to provide this funding once the new cost recovery model commences operation. The new model will see a significant change to the method used for calculating annual fees for rail transport operators to be paid to the ONRSR. Currently, an accredited operator is required to pay a fixed annual fee of fifteen thousand dollars as well as a variable annual fee that is based on track kilometres managed, track kilometres travelled or both. Under the new model, an accredited operator will pay an annual fee that is based on the operator's risk profile and the regulatory effort required from the ONRSR to oversee the operator. A tool has been developed to determine the risk profile of an operator. The main factors considered by the tool are inherent risk, management and control and safety performance. Once operators have been assigned a risk profile score, they will be ranked from highest to lowest. The new model will pull together the risk profile scores, and data on regulatory effort collected by the ONRSR, and group commercial operators into six cost recovery tiers. The tier amounts will be set out in the Rail Safety National Law National Regulations 2012 (National Regulations). The operators allocated to tier one will be those that have the highest risk profile and attract the most regulatory effort. The operators in tier one will pay the highest annual fee, while the operators in tier six will pay the lowest annual fee. Operators will have the ability to appeal if they believe they have been allocated to an inappropriate cost recovery tier. There are three types of railway operations that will not be included in the six-tier cost recovery model as they will be subject to other costing arrangements. The first type of railway operations that will be subject to other costing arrangements is railway operations carried out by the tourist and heritage sector. Currently, accredited tourist and heritage operators are charged a reduced annual fixed fee of two thousand dollars, as well as the variable annual fee. For most tourist and heritage operators, these fees are paid by governments as a community service obligation. However, these fees cover very little of the regulatory effort the sector attracts. At the May 2021 Infrastructure and Transport Ministers' Meeting, responsible Ministers agreed to fund a total of 4.9 million dollars per annum towards the cost of regulating the tourist and heritage sector. As a result of this decision, the Bill will remove the requirement for tourist and heritage operators to pay annual accreditation or registration fees. The second type of railway operations that will be subject to other costing arrangements is less complex railway operations. The National Regulations will be amended to enable an accredited person to apply to the ONRSR for a determination that their operations are less complex and therefore require less oversight. The eligibility criteria will be set out in the amended National Regulations. Under the amended National Regulations, these operators will be required to pay an annual accreditation fee of twenty thousand dollars, which is higher than the current average accreditation fee but is considerably lower than the fee they would be required to pay if they were included in one of the lower levels of the six-tier cost recovery model. The final type of railway operations that will be subject to other costing arrangements is railway operations undertaken by the rail infrastructure managers of private sidings. A private siding is a low-speed section of track distinct from a running line, used for stabling, storing, loading or unloading of carriages, for example. As such, they also require less regulatory oversight. Under the National Law, these operators are only required to be registered, not accredited. Under the amended Regulations, the annual fee for registration will be five thousand five hundred dollars, which is a much lower fee than those that will be payable under the six-tier model. In addition, the Bill will amend the definition of the term private siding to enable the rail infrastructure managers of some freight terminals to be registered instead of accredited. This will benefit these operators, as they will be subject to the lower annual registration fee. Application fees for all new operations will be adjusted and will also sit outside the tier structure. The Bill will insert three new sections into the National Law to enable annual increases in fee amounts to occur through an indexation methodology that is based on movements in the consumer price index and will be set out in the amended National Regulations. The Bill will require the annual adjusted fees to be published in the South Australian Government Gazette, on the ONRSR's website and in any other manner determined by the National Rail Safety Regulator. These amendments to the National Law will, over time, create benefits by reducing the need to amend the National Regulations to make annual fee adjustments. The ONRSR has consulted widely with industry on the new cost recovery model and the associated changes I have just outlined, and there is an expectation among industry across Australia that the changes will operate from 1 July 2023. Consequently, I seek the support of Members to progress the Bill through the House as expeditiously as possible. I also seek leave to have the Explanation of Clauses inserted into Hansard without my reading it. I commend the Bill to the House. Explanation of Clauses Explanation of Clauses Part 1—Preliminary 1—Short title 2—Commencement 3—Amendment provision These clauses are formal. Part 2—Amendment of Rail Safety National Law 4—Amendment of section 4—Interpretation This clause amends the definition of private siding to remove the reference to a freight terminal from the list of things that are excluded from being private sidings. This allows freight terminals to be private sidings. 5—Amendment of section 42—National Rail Safety Register This clause amends the list of matters that are required to be included on the National Rail Safety Register to include a list of those rail transport operators that are determined by the Regulator to be tourist and heritage railway operators. This amendment is consequential on proposed sections 76(1a) and 95(1a) of the Law (which provide that such operators are to be exempt from the payment of annual accreditation and registration fees). 6—Amendment of section 68—Application for variation of accreditation This amendment removes the requirement for an application for a variation of accreditation to be accompanied by an application fee. 7—Amendment of section 76—Annual fees This provision amends section 76 to provide that annual accreditation fees will not be payable by accredited persons determined by the Regulator to be tourist and heritage railway operators, as recorded on the National Rail Safety Register, or by any other accredited persons or class of accredited persons prescribed by the national regulations. 8—Insertion of section 76A This clause inserts proposed new section 76A. 76A—Increase in fee amounts This clause provides that the national regulations may prescribe a method by which fees payable under Part 3 Division 4 (Accreditation) of the Law may be increased each year. Any such fee increased pursuant to the prescribed method must be published by the Regulator, before 1 July of the financial year in respect of which the fee is to apply, in the South Australian Government Gazette and on the website of the Office of the National Rail Safety Regulator. 9—Amendment of section 87—Application for variation of registration This amendment removes the requirement for an application for a variation of registration in respect of a private siding to be accompanied by an application fee. 10—Amendment of section 95—Annual fees This provision amends section 95 to provide that annual registration fees will not be payable by registered persons determined by the Regulator to be tourist and heritage railway operators, as recorded on the National Rail Safety Register, or any other registered persons or class of registered persons prescribed by the national regulations. 11—Insertion of section 95A This clause inserts proposed new section 95A. 95A—Increase in fee amounts This clause provides that the national regulations may prescribe a method by which fees payable under Part 3 Division 5 (Registration of rail infrastructure managers of private sidings) of the Law may be increased each year. Any such fee increased pursuant to the prescribed method must be published by the Regulator, before 1 July of the financial year in respect of which the fee is to apply, in the South Australian Government Gazette and on the website of the Office of the National Rail Safety Regulator. 12—Amendment of heading to Part 6 Division 2 Subdivision 6 This clause amends the heading to Part 6 Division 2 Subdivision 6 and is consequential on the insertion of proposed section 214AA. 13—Insertion of section 214AA This clause inserts proposed new section 214AA. 214AA—Increase in fee amounts This clause provides that the national regulations may prescribe a method by which fees payable under Part 6 Division 2 (Exemptions granted by Regulator) of the Law may be increased each year. Any such fee increased pursuant to the prescribed method must be published by the Regulator, before 1 July of the financial year in respect of which the fee is to apply, in the South Australian Government Gazette and on the website of the Office of the National Rail Safety Regulator. Debate adjourned on motion of Hon. L.A. Henderson. At 18:03 the council adjourned until Tuesday 16 May 2023 at 14:15.