that pays the levy. Cost recovery fees and levies fall within the government’s broader charging framework. In addition to cost recovery, other types of government charges include commercial charges, fines and penalties, and general taxation. The Australian Government determines which charging type to use based on the characteristics of the activity. Figure 1 outlines key government charges and their characteristics. Attachment A provides further details. Figure 1: Key government charges and their characteristics Type of Commercial Cost Cost recovery Fines Taxes charge charges recovery levies Monetary Non-cost fees penalties recovery levies Royalties Excises Customs duties Relationship Generally Reflect Reflect May or may Generally do between based on efficient unit efficient not relate to not relate to a market rates costs of a overall of a specific specific charges and specific the activity activity or its activity or its good or costs costs (i.e. raise R Ea ≈ service general revenue) R Ea ≈ Statutory Generally Required Taxation Act May be Excise, authority to not required required required customs or charge taxation Act required GFSb Non-taxation revenue Taxation reporting revenue classification Examples of Activities of Licences Monitoring Late Generally not GBEsc compliance payment related to a activities Registrations penalties specific Activities Approvals activity conducted in Prosecution Patents a Enforcement competitive fees or potentially competitive market (e.g. data provision) a R = revenue generated from the activity; E = expenses incurred in providing the activity. b Government Finance Statistics. c A government business enterprise (GBE) is a Commonwealth entity or Commonwealth company that is prescribed by the made under the Public Governance, Performance and Accountability
that pays the levy. Cost recovery fees and levies fall within the government’s broader charging framework. In addition to cost recovery, other types of government charges include commercial charges, fines and penalties, and general taxation. The Australian Government determines which charging type to use based on the characteristics of the activity. Figure 1 outlines key government charges and their characteristics. Attachment A provides further details. Figure 1: Key government charges and their characteristics Type of charge Commercial charges Cost recovery fees Cost recovery levies Fines Monetary penalties Royalties Taxes Non-cost recovery levies Excises Customs duties Relationship between charges and Generally based on market rates Reflect efficient unit costs of a specific good or service R ≈ Ea Reflect efficient overall of the activity R ≈ Ea May or may not relate to a specific activity or its costs Generally do not relate to a specific activity or its costs (i.e. raise general revenue) Statutory authority to charge Generally not required Required Taxation Act required May be required Excise, customs or taxation Act required GFSb reporting classification Non-taxation revenue Taxation revenue Examples of activities Activities of GBEsc Activities conducted in a competitive or potentially competitive market (e.g. data provision) Licences Registrations Approvals Patents Monitoring compliance Enforcement Late payment penalties Prosecution fees Generally not related to a specific activity a R = revenue generated from the activity; E = expenses incurred in providing the activity. b Government Finance Statistics. c A government business enterprise (GBE) is a Commonwealth entity or Commonwealth company that is prescribed by the made under the Public Governance, Performance and Accountability
australian-government-cost-recovery-guidelines.docx