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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PRIMARY INDUSTRIES (EXCISE) LEVIES BILL 2023
PRIMARY INDUSTRIES (CUSTOMS) CHARGES BILL 2023
PRIMARY INDUSTRIES (SERVICES) LEVIES BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
Senator the Hon. Murray Watt)
PRIMARY INDUSTRIES (EXCISE) LEVIES BILL 2023
PRIMARY INDUSTRIES (CUSTOMS) CHARGES BILL 2023
PRIMARY INDUSTRIES (SERVICES) LEVIES BILL 2023
GENERAL OUTLINE
The Primary Industries (Excise) Levies Bill 2023, the Primary Industries (Customs) Charges
Bill 2023 and the Primary Industries (Services) Levies Bill 2023 (the Imposition Bills) form
part of a package of Bills to modernise the agricultural levies legislative framework.
The Imposition Bills would enable excise levies, customs charges and services levies to be
imposed as part of the agricultural levy system.
The Imposition Bills, in combination with the following Bills, would provide the overarching
legislative framework for the national agricultural levy system:
• Primary Industries Levies and Charges Collection Bill 2023 (Collection Bill), and
• Primary Industries Levies and Charges Disbursement Bill 2023 (Disbursement Bill).
The agricultural levy system is a long-standing partnership between industry and the
Australian Government to facilitate industry investment in strategic activities. The system has
been in place since 1989. Excise levies and customs charges are collected from farmers,
producers, processors and exporters. The Department of Agriculture, Fisheries and Forestry
publishes levy guidelines on its website to support agricultural, fisheries and forestry
industries through the process of developing a proposal to establish or amend an agricultural
levy or charge. The agricultural levy system allows agricultural, fisheries and forestry
industries to collectively invest in research and development (R&D), marketing, biosecurity
activities, biosecurity responses and residue testing activities. These investments are made by
levy recipient bodies on behalf of relevant industries. Without this arrangement most
individual producers, processors or exporters could not invest effectively in these activities.
The Australian Government also matches industry investment in R&D up to legislated limits
by providing payments to the levy recipient bodies. These levy recipient bodies are
colloquially known as research and development corporations (RDCs). A target of investment
in R&D equivalent to 1% of an industry's gross value of production (GVP) was identified as
the desired level of investment when the legislative framework first was established in 1989.
This target is still supported by the GVP limit on matching funding today.
Over time, the agricultural levies legislation has become overly complex, duplicative, and
inconsistent. There are more than 50 pieces of legislation governing over 110 levies across
over 75 commodities and 18 levy recipient bodies. There are also some redundant and out of
date provisions.
A 2018 review of the agricultural levies legislation found the legislative framework serves the
objectives of the agricultural levy system and is necessary for a successful industry-
government arrangement. Despite this, the review found the current legislation is ineffective
in meeting industries' needs now and in the future.
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The package of Bills would modernise the agricultural levies legislative framework to provide
contemporary, flexible and efficient legislation that would better support industries' needs in
the future.
The three Imposition Bills would replace five levy and charge imposition Acts:
• Primary Industries (Excise) Levies Act 1999 (PIEL Act), and National Residue
Survey (Excise) Levy Act 1998 (Levy Acts);
• Primary Industries (Customs) Charges Act 1999 (PICC Act), and National Residue
Survey (Customs) Levy Act 1998 (Charge Acts);
• Horse Disease Response Levy Act 2011 (HDRL Act).
These Acts would be repealed by the Primary Industries (Consequential Amendments and
Transitional Provisions) Bill 2023.
The Imposition Bills would enable existing excise levies and customs charges in the
agricultural levy system to be re-established in regulations, as well as enabling levies to be
imposed on certain agricultural services. The Imposition Bills would:
• enable the regulations to impose excise levies and customs charges on produce of a
primary industry. These levies and charges represent the majority of existing levies
and charges in the agricultural levy system and include levies and charges on grains
and other crops, horticultural products, fibre products, red meat, poultry and eggs,
pigs, game animals, forestry products, turf and farmed prawns.
• enable the regulations to impose excise levies and customs charges in relation to
goods consumed by, or used in the maintenance or treatment of animals, plants, fungi
or algae. This would enable the horse disease response levy to be provided for in
regulations under the Primary Industries (Excise) Levies Bill 2023, rather than
remaining in stand-alone legislation.
• enable excise levies to be imposed in relation to goods that are for use in the
production or preparation of nursery products. This would enable the nursery products
levy to be re-established more simply in the regulations, while continuing to have a
similar operation in practice as it currently does.
• enable the regulations to impose levies on services that facilitate the production of
products that are produce of a primary industry. For example, the Primary Industries
(Services) Levies Bill 2023 could enable a levy to be imposed on bee pollination
services provided on a commercial basis to pollinate orchards and crops.
• provide a consistent framework for excise levies, customs charges and services levies
by including equivalent provisions in all three Bills relating to common matters such
as definitions, exemptions from levy or charge, rate of levy or charge, and a range of
other matters.
• provide for consultation with affected industries before regulations are made that
would change levy or charge rates or establish new levies or charges.
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• provide for an instrument to set out requirements for, or in relation to, the conduct of a
poll, enabling the re-establishment of requirements relating to polls in place for dairy
and wool industries.
CONSULTATION
The development of the new agricultural levies legislation has been informed by extensive
consultation with industry groups, levy payers, collection agents, and levy recipient bodies:
• 2017-18: The department reviewed the levies legislative framework and undertook
targeted consultation with approximately 70 stakeholder groups.
• 2019-20: The department released the 'Streamlining and modernising agricultural
levies legislation - early assessment regulation impact statement' for public
consultation.
• 2021-22: The department conducted further consultation with industry representatives
and bodies that receive levy funding (industry-owned and statutory RDCs, Animal
Health Australia (AHA) and Plant Health Australia (PHA)). This included targeted
consultation with primary industry representative bodies about industry-specific levies
and charges. The department spoke to approximately 70 industry representative bodies
in relation to the intended approach to transferring their existing excise levies and
customs charges into the draft legislation. The department also wrote to around 7,500
collection agents to provide information about the proposed approach to the new
legislative framework.
• 2023: Public consultation on the draft agricultural levies legislation.
Consultation on the new agricultural levies legislation also occurred with relevant
Commonwealth agencies during the development of the Bills, including the Attorney-
General's Department, the Australian Bureau of Statistics, the Australian Public Service
Commission, the Department of Finance, the Department of the Prime Minister and Cabinet,
the Federal Court and the Federal Circuit and Family Court of Australia, the Office of the
Australian Information Commissioner and the Department of the Treasury.
FINANCIAL IMPACT STATEMENT
The Imposition Bills are estimated to have no net financial impact on the Australian
Government Budget. The measures in the Bills allow for the continuation of the agricultural
levy system. The Imposition Bills do not change existing levy rates or impose new or
additional levies. Costs associated with the administration of levies are cost-recovered from
industry by the department.
In 2021-22, the department disbursed around $600 million raised from levies and charges
imposed on industry. Over the forward estimates to 2026-27, similar amounts of levy and
charge funds are expected to be disbursed each financial year, noting there is year-to-year
variation because production volumes or sales values of levied products vary with seasonal
and market conditions.
Matching funding payments made by the Australian Government to industry-owned and
statutory RDCs are provided for in the Disbursement Bill.
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IMPACT ANALYSIS
The Impact Analysis (OBPR22-03525) is attached to this explanatory memorandum
(Attachment A).
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Each Imposition Bill is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
The full statement of compatibility with human rights for each Imposition Bill is attached to
this explanatory memorandum (Attachment B).
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PRIMARY INDUSTRIES (EXCISE) LEVIES BILL 2023
NOTES ON CLAUSES
Part 1--Preliminary
Section 1 Short title
1. This section would provide for the short title of the proposed Act to be the Primary
Industries (Excise) Levies Act 2023 (the Act).
Section 2 Commencement
2. This section would provide for the commencement of each provision of the proposed Act,
as set out in the table in subsection 2(1).
3. Item 1 in the table would provide that the whole of the proposed Act will commence on 1
January 2025.
4. A note to subsection 2(1) would state that the table relates only to the provisions of the
proposed Act as originally enacted and it will not be amended to deal with any later
amendments of the proposed Act.
5. Subsection 2(2) would provide that any information in column 3 of the table is not part of
the proposed Act. Information may be inserted in column 3 of the table, or information in
it may be edited, in any published version of the proposed Act. This would allow
information to be inserted in column 3 to assist the reader after commencement.
Section 3 Simplified outline of this Act
6. This section would set out a simplified outline of the proposed Act. The simplified outline
would provide that the proposed Act authorises the regulations to impose levies in relation
to:
a. animal products, plant products, fungus products or algal products that are produce
of a primary industry, and
b. goods that are of a kind consumed by, or used in the maintenance or treatment of,
animals, plants, fungi or algae, and
c. goods that are for use in the production or preparation of nursery products.
7. In addition to imposing a particular levy, the regulations would also set out:
a. any exemptions from the levy; and
b. the rate of the levy; and
c. the person who is liable to pay the levy (the levy payer).
8. The simplified outline is included to assist the reader to understand the substantive
provisions of the proposed Act; however, it is not intended to be comprehensive. The
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reader should rely on the substantive provisions of the proposed Act to which the outline
relates.
Section 4 Definitions
9. This section would provide the definitions used in the proposed Act. Notes are provided
below for key definitions.
algae
10. This definition would provide that algae means macroalgae, microalgae or cyanobacteria,
and includes seaweeds. This definition would also include the singular of algae which is
"alga".
11. This term would be used in the definition of produce of a primary industry to clarify that
products that result from the cultivation of algae are produce of a primary industry.
algal product
12. This definition would provide that algal product means an alga, or any part of an alga or,
anything produced by an alga or, or anything wholly or principally produced from, or
wholly or principally derived from, an alga. See the definition of algae that defines "alga"
which is the singular of algae.
animal
13. This definition would provide that animal means any member, alive or dead, of the
animal kingdom (other than a human being).
14. This term would be used in the definition of produce of a primary industry to clarify that
products that result from an animal are produce of a primary industry.
animal product
15. This definition would provide that animal product means an animal, or any part of an
animal, or anything produced by an animal, or anything wholly or principally produced
from, or wholly or principally derived from, an animal.
aquaculture
16. This definition would provide that aquaculture means propagating, rearing, keeping or
breeding aquatic vertebrates or aquatic invertebrates.
17. This term would be used in the definition of produce of a primary industry to clarify that
products that result from aquaculture are produce of a primary industry.
fishing
18. This definition would provide that fishing means the catching, capturing or harvesting of
aquatic vertebrates or aquatic invertebrates. This term has been defined to specifically
include all aquatic animals obtained in one of the specified ways.
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19. This term would be used in the definition of produce of a primary industry to clarify that
products that result from fishing are produce of a primary industry.
forest operations
20. This definition would provide that forest operations means the growing, harvesting or
processing of wood.
21. This term would be used in the definition of produce of a primary industry to clarify that
products that result from forest operations are produce of a primary industry.
fungus
22. This definition would provide that fungus means any member, alive or dead, of the fungi
kingdom, and includes yeasts, mushrooms and truffles. This definition would also include
the singular of fungus which is "fungi".
23. This term would be used in the definition of produce of a primary industry to clarify that
products that result from the cultivation of fungi are produce of a primary industry.
fungus product
24. This definition would provide that fungus product means a fungus, or any part of a
fungus, anything produced by a fungus, or anything wholly or principally produced from,
or wholly or principally derived from, a fungus.
levy
25. This definition would provide that levy means a levy imposed by regulations made for the
purposes of Part 2, 3 or 4 of the proposed Act.
26. This definition would also apply, for example, in Part 5 (Rate of levy), Part 6 (Levy
payer) and Part 7 (Other matters) so that a reference to a "levy" includes a levy imposed
by regulations made for the purposes of Part 2, 3 or 4 of the proposed Act.
nursery products
27. This definition would provide that nursery products includes trees, shrubs, plants, seeds,
bulbs, corms, tubers, propagating material and plant tissue cultures, grown for ornamental
purposes or for producing fruits, vegetables, nuts or cut flowers and foliage.
28. It is intended that this definition is sufficiently broad to include the wide range of products
that are grown, or could be grown in future, as part of the Australian nursery propagation
sector. This would allow the definition to accommodate both current and future
developments in the nursery propagation sector.
plant
29. This definition would provide that plant means any member, alive or dead, of the plant
kingdom.
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plant product
30. This definition would provide that plant product means a plant, or any part of a plant, or
anything produced by a plant, or anything wholly or principally produced from, or wholly
or principally derived from, a plant.
produce of a primary industry
31. This definition would provide that produce of a primary industry means products that
result from any of the following:
a. agriculture or the cultivation of land;
b. the maintenance of animals for commercial purposes;
c. soilless growing systems, including hydroponics, aeroponics and aquaponics;
d. controlled environment cropping, including vertical farming, indoor farming and
protected cropping;
e. forest operations;
f. fishing;
g. aquaculture;
h. hunting or trapping;
i. picking or harvesting from the wild;
j. horticulture;
k. viticulture;
l. the cultivation of fungi or algae; or
m. any other primary industry activity.
32. It is intended that this definition would be sufficiently broad to include the wide range of
products that result from primary industry activities and production by the agriculture,
fisheries and forestry sectors in Australia. Mining or mineral extractive industries are not
intended to be captured in this definition or this legislation.
33. The term has been defined to also ensure that innovative growing systems, such as soilless
growing systems and controlled environment cropping, that are increasing in use, are
explicitly covered. The term is also intended to be broad enough to include activities such
as harvesting wild bushfoods.
product
34. This definition would provide that product means an animal, plant, fungus or algal
product, whether or not any operations have been performed in relation to the product.
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Section 5 Crown to be bound
35. This section would provide that the proposed Act would bind the Crown in right of each
of the States, of the Australian Capital Territory and of the Northern Territory. However,
it would not bind the Crown in right of the Commonwealth.
Section 6 Application of this Act in external Territories
36. This section would provide that the proposed Act and the regulations made under the
proposed Act do not automatically extend to the external Territories.
37. Subsection 6(2) would provide that the regulations made under the proposed Act may
extend the Act, and any provisions of the regulations, to an external Territory that is
prescribed by the regulations. This would enable the regulations to extend the proposed
Act and any provisions of the regulations to external Territories on a case-by-case basis.
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Part 2--Levies in relation to products that are produce of a
primary industry
Overview
38. Part 2 would authorise the regulations made under the Act to impose levies in relation to
products that are produce of a primary industry. Product and produce of a primary
industry are, in turn, defined in section 4.
39. The part would also authorise the regulations made under the Act to impose two or more
levies, and to provide for exemptions from a levy under the part.
Section 7 Imposition of levies
40. This section would provide that the regulations made under the Act may impose a levy in
relation to one or more specified products that are produce of a primary industry in the
circumstances prescribed by the regulations.
41. Section 7 would allow for the continuation of levies imposed under the Levy Acts in
relation to products that are produce of a primary industry.
42. Section 7 would also enable new levies to be imposed in relation to other products that are
produce of a primary industry, noting that the products must be animal, fungus, plant, or
algal products. This section is intended to be broad enough to support any future excise
levies on produce of a primary industry that is produced by the Australian agriculture,
fisheries and forestry sectors.
43. A note to subsection 7(1) would explain that products may be specified by name, by
inclusion in a specified class, or in any other way.
44. The policy intention is for the scope of the imposition power in Part 2 of the proposed Act
to be similar to that of the PIEL Act, which at a high level, limits the imposition of levies
to animal and plant products that are produce of primary industry.
45. This is to ensure that levies imposed under the Levy Acts could be continued under the
proposed Act, while intentionally providing for levies to be imposed in relation to
products that are algal products that are produce of a primary industry.
46. The following key definitions (defined in section 4 of the Act) relate to understanding the
intended scope of the imposition power for levies imposed under Part 2 of the proposed
Act: produce of a primary industry, product, algae, algal product, animal, animal
product, plant, plant product, fungus and fungus product.
47. The definitions of animal, animal product, plant, and plant product are intended to be
sufficiently broad to enable levies to be imposed in relation to the wide range of animal
and plant products subject to levies under the Levy Acts. They are also intended to be
sufficiently broad to enable levies to be imposed in relation to any animal or plant
products that primary industry sectors may seek to have levied in the future.
48. Algae and algal products have intentionally been included as explicit terms to ensure that
levies could be imposed in relation to the wide range of algae and seaweeds that are, or
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could be, grown, harvested or produced in Australia in future. The definition of algae is
intended to capture seaweeds such as Asparagopsis and kelp, and microalgae such as
Spirulina. It is intended that the definitions of algae and algal product are sufficiently
broad to enable levies to be imposed in relation to any algae that primary industry sectors
may seek to have levied in future.
49. It is expected that the algae and seaweed industries would continue to develop in Australia
in the coming decades. Enabling levies to be imposed in relation to algal products that are
produce of a primary industry would provide those industries with the opportunity to
participate in the agricultural levy system in future.
50. Fungus and fungus products have intentionally been included as explicit terms to ensure
that levies could be imposed in relation to any fungus products that are, or could be,
grown, harvested or produced in Australia in future. To provide greater scientific
accuracy, fungus would be defined separately from plants, noting this was not the case
under the PIEL Act. This would allow for the continuation of levies on Agaricus
mushrooms, and for levies to be imposed in relation to any fungus product that primary
industry sectors may seek to have levied in the future. For example, yeast or truffles.
Minister to be satisfied of matters
51. Subsection 7(3) would provide that, before the Governor-General makes regulations for
the purposes of subsection 7(1), the Minister must be satisfied that the imposition of the
levy will result in expenditure on one or more of the following:
a. the marketing, advertising or promotion of products of one or more primary
industries (paragraph 7(3)(a));
b. research and development activities for the benefit of one or more primary
industries (paragraph 7(3)(b));
c. activities, including biosecurity activities, relating to the promotion or maintenance
of the health of plants, animals, fungi or algae (paragraph 7(3)(c));
d. matters relating to a biosecurity response (paragraph 7(3)(d));
e. activities relating to the National Residue Survey (paragraph 7(3)(e));
f. any other activity prescribed by the regulations in relation to one or more primary
industries and for the benefit of one or more primary industries (paragraph 7(3)(f)).
52. The intended purpose of subsection 7(3) would be to require that a levy under Part 2 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
53. Paragraphs 7(3)(a)-(e) would reflect the five broad purposes for which agricultural levies
were established under the Levy Acts.
54. Paragraph 7(3)(c) would allow for the continuation of levies colloquially referred to as
AHA or PHA levies. The regulations made under the proposed Act would refer to these as
the 'biosecurity activity' component of a levy.
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55. Paragraph 7(3)(d) would allow for the continuation of levies colloquially referred to as
EADR (emergency animal disease response) levies and EPPR (emergency plant pest
response) levies. These levies are imposed primarily to fund industry contributions to the
costs of a response to a pest or disease incursion under a biosecurity response deed such as
the Emergency Animal Disease Response Agreement and the Emergency Plant Pest
Response Deed, including repayment over time where the government has underwritten
the industry's contribution in the first instance (as permitted by the deed arrangements).
The regulations made under the proposed Act would refer to these as the 'biosecurity
response' component of a levy.
56. Paragraphs 7(3)(c) and 7(3)(d) are intended to cover the levy funded operations currently
undertaken by AHA and PHA. They are also intended to be broad enough to cover future
developments in animal and plant health, such as industry and government jointly
agreeing a new emergency response deed.
57. Paragraph 7(3)(f) is intended to provide some flexibility in case, in the future, industry
and government agree to extend the agricultural levy system to include expenditure for an
additional purpose. Such expenditure would need to be for the benefit of one or more
primary industries.
Duty of excise
58. Subsection 7(4) would clarify that section 7 authorises the imposition of a levy only so far
as the levy is a duty of excise within the meaning of section 55 of the Constitution.
59. Pursuant to section 55 of the Constitution, laws imposing duties of excise must only deal
with duties of excise. Therefore, section 7 would authorise the imposition of duties of
excise within the meaning of section 55 of the Constitution, and would not authorise, for
example, the imposition of duties of customs.
Section 8 Imposition of 2 or more levies
60. This section would clarify that Part 2 of the Act does not prevent the imposition of two or
more levies, whether the levies are imposed in relation to the same products or in relation
to different products. This would have the effect that the regulations may impose two or
more levies.
61. Under section 7 of the Act, it is possible for different levies, with different rates, different
levy payers and different purposes, to be imposed, including on the same product. It is
necessary to enable the imposition of two or more levies on the same products so that levy
can be payable by all industry members. This allows for growers and processors of the
same product (as one example) to each pay levy that will benefit their primary industry.
62. For example, two forestry levies are imposed under the PIEL Act: the forest growers levy
and the forest industries products levy. Both levies are imposed on logs, but one is paid by
the owner of the logs (the grower) and the other is paid by the processor (the sawmill
operator). This provision will enable these two distinct levies (among others) to be re-
established.
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Section 9 Exemptions from levy
63. This section would authorise the regulations made under the Act to provide for
exemptions from a levy imposed under Part 2. The effect of this section would be to allow
the regulations to provide for the circumstances under which levy would not be imposed
in relation to products that are produce of a primary industry. Enabling the regulations to
set out, as exemptions, the circumstances under which levy would not be imposed is
appropriate as it would provide the flexibility to continue designing levies that work for
each industry, including through the use of such exemptions. Exemptions are also used to
ensure levies are equitable and cost effective.
64. Exemptions are commonly sought by industry to exempt small producers from paying a
levy so that the levy is more efficient and cost effective to collect. These exemptions
might be based on the volume of production or the total amount of levy the producer
would be liable to pay.
65. Exemptions are also commonly used to ensure levy or charge is only paid once in relation
to a particular product. For example, if levy has already been imposed, there is often an
exemption from paying a charge on the same product.
66. Section 9 of the Act would allow for such arrangements to continue.
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Part 3--Levies in relation to goods consumed by, or used in the
maintenance or treatment of, animals, plants, fungi or
algae
Overview
67. Part 3 would authorise the regulations made under the Act to impose levies in relation to
goods consumed by, or used in the maintenance or treatment of, animals, plants, fungi or
algae.
68. The part would also authorise the regulations made under the Act to impose two or more
levies, and to provide for exemptions from a levy under the part.
Section 10 Imposition of levies
69. This section would provide that the regulations made under the Act may impose a levy in
relation to one or more specified goods that are of a kind consumed by, or used in the
maintenance or treatment of, animals, plants, fungi or algae, and in the circumstances
prescribed by the regulations.
70. A note to subsection 10(1) would explain that goods may be specified by name, by
inclusion in a specified class, or in any other way.
71. The primary policy intention for this section is to allow for the horse disease response
levy, currently imposed in stand-alone legislation, to be incorporated into regulations
made under the proposed Act.
72. The HDRL Act would be repealed by the proposed Primary Industries (Consequential
Amendments and Transitional Provisions) Act. This would streamline the legislation and
allow the horse disease response levy to be treated consistently with other biosecurity
response levies.
73. The horse disease response levy is imposed on manufactured horse feed and worming
treatments. These would not fall within the scope of levies imposed under Part 2 of this
proposed Act, as they are not products that are produce of a primary industry.
74. This section could also be used to enable the imposition of new levies that are similar to
the horse disease response levy. Most agricultural levies will continue to be imposed
directly in relation to products that are produce of a primary industry. However, there are
occasions where it may be more efficient or effective to impose a levy under this section
of the proposed Act.
Minister to be satisfied of matters
75. Subsection 10(2) would provide that, before the Governor-General makes regulations for
the purposes of subsection 10(1), the Minister must be satisfied that the imposition of the
levy will result in expenditure on activities, including biosecurity activities, relating to the
promotion or maintenance of the health of plants, animals, fungi or algae, and/or matters
relating to a biosecurity response.
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76. The intended purpose of subsection 10(2) would be to require that a levy under Part 3 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
77. Subsection 10(2) would reflect the existing animal and plant health, and biosecurity
response purposes for which agricultural levies were established under the Levy Acts and
the HDRL Act.
78. Similar to paragraph 7(3)(c), paragraph 10(2)(a) would also allow for the continuation of
levies colloquially referred to as AHA or PHA levies. The regulations made under the
proposed Act would refer to these as the 'biosecurity activity' component of a levy.
79. Similar to paragraph 7(3)(d), paragraph 10(2)(b) would also allow for the continuation of
levies colloquially referred to as EADR or EPPR levies. The regulations made under the
proposed Act would refer to these as the 'biosecurity response' component of a levy.
80. Paragraphs 10(2)(a) and 10(2)(b) are intended to cover the levy funded operations
currently undertaken by AHA and PHA. They are also intended to be broad enough to
cover future developments in animal and plant health, such as industry and government
jointly agreeing a new emergency response deed.
Duty of excise
81. Subsection 10(3) would clarify that section 10 authorises the imposition of a levy only so
far as the levy is a duty of excise within the meaning of section 55 of the Constitution.
This would be consistent with equivalent provisions under subsections 7(4) and 13(3) of
the proposed Act, allowing only for duties of excise to be imposed under Parts 2 and 4
respectively.
Section 11 Imposition of 2 or more levies
82. This section would clarify that Part 3 of the Act does not prevent the imposition of two or
more levies, whether the levies are imposed in relation to the same goods or in relation to
different goods. This would have the effect that the regulations may impose two or more
levies.
83. This would be consistent with equivalent provisions under sections 8 and 14 of the
proposed Act, allowing for the imposition of two or more levies under Parts 2 and 4,
respectively.
Section 12 Exemptions from levy
84. This section would authorise the regulations made under the Act to provide for
exemptions from a levy imposed under Part 3. The effect of this section would be to allow
the regulations to provide for the circumstances under which levy would not be imposed
in relation to specified goods that are of a kind consumed by, or used in the maintenance
or treatment of, animals, plants, fungi or algae.
85. This would be consistent with equivalent provisions under sections 9 and 15 of the
proposed Act, providing for the circumstances under which levy would not be imposed
under Parts 2 and 4, respectively.
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Part 4--Levies in relation to goods connected with nursery
products
Overview
86. Part 4 would authorise the regulations made under the Act to impose levies in relation to
goods for use in the production and preparation of nursery products. Nursery products
would, in turn, be defined in section 4.
87. The part would also authorise the regulations made under the Act to impose two or more
levies, and to provide for exemptions from a levy under the part.
Section 13 Imposition of levies
88. This section would provide that the regulations made under the Act may impose a levy in
relation to one or more specified goods that are for use in the production or preparation of
nursery products for sale, or for use in the commercial production of other goods, and in
the circumstances prescribed by the regulations.
89. It is intended that subsection 13(1) would authorise the regulations made under the Act to
impose levies in relation to nursery products. This would allow for the nursery products
levy imposed under subclause 2(1) of Schedule 15 to the PIEL Act to be re-established in
regulations made under the proposed Act.
90. This section would enable the nursery products levy to be imposed directly on containers
used for the production or preparation of nursery products, streamlining the regulations
that would be made under the proposed Act to re-establish this levy. In turn, it would also
allow the corresponding Rule made under the Collection Bill to be simplified.
91. Section 13 is intended to make imposition of the nursery products levy easier to
understand and simpler to administer. Although the levy would have a different legislative
design, it is not intended to practically change the operation of the levy.
92. A note to subsection 13(1) would explain that goods may be specified by name, by
inclusion in a specified class, or in any other way.
Minister to be satisfied of matters
93. Subsection 13(2) would provide that, before the Governor-General makes regulations for
the purposes of subsection 13(1), the Minister must be satisfied that the imposition of the
levy will result in expenditure on one or more of the following:
a. the marketing, advertising or promotion of products of one or more primary
industries (paragraph 13(2)(a));
b. research and development activities for the benefit of one or more primary
industries (paragraph 13(2)(b));
c. activities, including biosecurity activities relating to the promotion or maintenance
of the health of plants (paragraph 13(2)(c));
d. matters relating to a biosecurity response (paragraph 13(2)(d));
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e. activities relating to the National Residue Survey (paragraph 13(2)(e));
f. any other activity prescribed by the regulations in relation to one or more primary
industries, and for the benefit of one or more primary industries
(paragraph 13(2)(f)).
94. The intended purpose of subsection 13(2) would be to require that a levy under Part 4 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
95. Paragraphs 13(2)(e) would reflect the five broad purposes for which levies imposed in
relation to nursery products could be established. This would be consistent with equivalent
provisions under section 7 of the proposed Act, for levies imposed under Part 2 in relation
to products that are produce of a primary industry.
96. Paragraph 13(2)(f) is intended to provide some flexibility in case, in the future, industry
and government agree to extend the agricultural levy system to include expenditure for an
additional purpose. This would allow for any additional purpose to also be applied to
levies imposed in relation to nursery products. Such expenditure would need to be for the
benefit of one or more primary industries.
Duty of excise
97. Subsection 13(3) would clarify that section 13 authorises the imposition of a levy only so
far as the levy is a duty of excise within the meaning of section 55 of the Constitution.
This would be consistent with equivalent provisions under subsections 7(4) and 10(3) of
the proposed Act, allowing only for duties of excise to be imposed under Parts 2 and 3
respectively.
Section 14 Imposition of 2 or more levies
98. This section would clarify that Part 4 of the Act does not prevent the imposition of two or
more levies, whether the levies are imposed in relation to the same goods or in relation to
different goods. This would have the effect that the regulations may impose two or more
levies.
99. This would be consistent with equivalent provisions under sections 8 and 11 of the
proposed Act, allowing for the imposition of two or more levies under Parts 2 and 3,
respectively.
Section 15 Exemptions from levy
100. This section would authorise the regulations made under the Act to provide for
exemptions from a levy imposed under Part 4. The effect of this section would be to
allow the regulations to provide for the circumstances under which levy would not be
imposed in relation to one or more specified goods that are for use in the production or
preparation of nursery products for sale, or for use in the commercial production of other
goods, and in the circumstances prescribed by the regulations.
101. This would be consistent with equivalent provisions under sections 9 and 12 of the
proposed Act, providing for the circumstances under which levy would not be imposed,
under Parts 2 and 3, respectively.
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Part 5--Rate of levy
Overview
102. Part 5 would provide for matters relating to the rate of levy, components of levy,
flexibility in relation to rates of levy and nil or zero rates.
Section 16 Rate of levy
103. This section would provide that the rate of a levy imposed under Part 2, 3 or 4 is worked
out in accordance with the regulations made under the Act. Section 16 operates in
conjunction with section 27, which provides for the making of regulations. The
regulations would prescribe the rate of a levy comprised of either a single levy
component or the sum of levy components.
104. This section does not provide a maximum levy rate. This approach is consistent with
recommendations made by the Productivity Commission in its report Rural Research
and Development Corporations (2011) that maximum levy rates should be abolished
from the agricultural levies legislation. Consultation with industry stakeholders has
shown they are largely supportive of removing maximum rates from the legislation.
Section 17 Components of levy
105. This section would provide that the rate of a levy imposed under Part 2, 3 or 4 may be
expressed to be equal to a single component prescribed by the regulations made under
the Act, or the sum of such components as are prescribed by the regulations.
106. The regulations made under the Act would clearly label each component with its
corresponding purpose. For example, 'research and development component',
'marketing component' and so on.
107. Under the Levy Acts different kinds of levy are imposed in relation to the same products
allowing for expenditure on one or more of the existing purposes of the levy system.
108. This provision would enable one levy to be imposed and for the rate of the levy to be
comprised of different components. This allows the flexibility for one levy to result in
expenditure across any or all of the purposes of the agricultural levy system. For
example, the buffalo slaughter levy will be imposed to fund expenditure on research and
development, and residue testing, whereas the custard apple levy will be imposed to
fund expenditure on research and development, and marketing.
109. Subsection 17(2) would clarify that subsection 17(1) does not limit the operation of
section 16, which provides that the rate of a levy imposed under Part 2, 3 or 4 is worked
out in accordance with the regulations made under the Act.
Section 18 Flexibility in relation to rates of levy
110. This section would provide that different rates of the same levy imposed under Part 2, 3
or 4 may be prescribed by the regulations made under the Act for different kinds of
products or goods.
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111. This would allow different levy rates to be set to meet the specific needs of individual
industries. For example, an industry with high research and development needs may
choose to set a higher rate for a research and development component than an industry
with low research and development needs.
112. This would also allow different levy rates to be set to meet the specific needs within
individual industries. For example, the pineapple levy has different rates for pineapples
sold for processing and pineapples sold for any other purpose. These rates reflect what
industry proposes to government as being suitable for its needs and helps ensure that
levies fairly apply to different types of transactions.
113. Subsection 18(2) would clarify that subsection 18(1) does not limit the operation of
section 16, which provides that the rate of a levy imposed under Part 2, 3 or 4 is worked
out in accordance with the regulations made under the Act.
114. Subsection 18(3) would clarify that subsection 18(1) does not limit the operation of
subsection 33(3A) of the Acts Interpretation Act 1901 (Acts Interpretation Act), which
relates to the scope of powers where an Act confers a power to make, among other
instruments, regulations, with respect to particular matters.
Section 19 Nil or zero rates
115. This section would provide that the rate of a levy imposed under Part 2, 3 or 4, or a
component of the rate of a levy, may be expressed to be nil, zero, $0 or 0 cents per unit
of measure, or 0% of the sale price of a product or goods.
116. This would allow for a levy to be imposed with a rate set to nil or zero if required. There
are several reasons why a levy rate might be set to nil; most commonly this occurs with
biosecurity response levies, but a nil rate can be set for any levy imposed under Part 2, 3
or 4.
117. Biosecurity response levies are often first imposed with a nil rate. This allows for a quick
activation of the levy, by setting a positive rate, in the event of a relevant biosecurity
response. This provides certainty for the industry and the Commonwealth that a payment
(including repayment) mechanism is in place if required.
118. Other reasons for setting a levy rate to nil can include the cost of collection exceeding
the revenue raised from the levy, or a change to the purposes for which the levy has been
imposed. For example, industries sometimes seek to have the balance of their levy
components adjusted in response to changing priorities, without increasing the total rate
of levy they are paying. One way of achieving this is for one component of the levy
(such as marketing) to be reduced to nil, while increasing another component (such as
research and development) by the same amount to serve the higher priority. Such
adjustments can either be temporary or permanent.
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Part 6--Levy payer
Overview
119. Part 6 would provide for the levy payer.
Section 20 Levy payer
120. This section would provide that a levy imposed under Part 2, 3 or 4 is payable by the
person worked out in accordance with the regulations made under the Act.
121. Naming the levy payer for each levy in the regulations provides the necessary flexibility
to prescribe this person on a case-by-case basis. For example, the levy payer could be
the owner of the good or product at a point in time, the grower or processor of the
product, or another relevant person in the industry. This flexibility is a crucial part of the
levy system.
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Part 7--Other matters
Overview
122. Part 7 would provide for other matters, including:
• that the Act would not impose levy on State property
• the exclusion of net GST from the price of product or goods or amount paid for
product or goods
• nominated industry representative bodies and nominated polling bodies
• the treatment of partnerships, trusts and unincorporated bodies or associations
• the making of regulations under the Act.
Section 21 Act does not impose levy on property of a State
123. This section would clarify that the Act does not authorise the imposition of a tax on
property of any kind belonging to a State.
124. Subsection 21(2) would provide that property of any kind belonging to a State has the
same meaning as in section 114 of the Constitution. Section 114 of the Constitution
provides that the Commonwealth may not impose any tax on property of any kind
belonging to a State.
125. Subsection 21(3) would provide an assumption for the purposes of section 21, namely,
that a reference in section 114 of the Constitution to a State includes a reference to the
Australian Capital Territory and the Northern Territory.
Section 22 Net GST not included in price of product or goods or amount paid for
product or goods
126. This section would provide a contrary intention to section 177-12 of the A New Tax
System (Goods and Services Tax) Act 1999 (GST Act). Subsection 177-12(1) of the
GST Act provides that, in any Act, unless the contrary intention appears, a reference to a
price relating to a supply, or a proposed supply, is taken to include the net GST (if any)
that is, or would be, payable by an entity making the supply.
127. The intention of this provision is to ensure levy is not paid on amounts of GST. For
example, if the sale price of a product was $4.40 including GST, the levy would be
calculated on a sale price of $4.00 as the GST exclusive value.
Section 23 Nominated industry representative bodies and nominated polling bodies
128. This section would provide that the Minister may, by legislative instrument, determine a
specified body to be a nominated industry representative body or a nominated polling
body, respectively, and specify one or more levies in relation to that body.
129. This section would streamline arrangements for declaring industry representative bodies
and make uniform the varied titles used for industry representative body functions.
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130. The 'nominated industry representative body' term is intended to consolidate multiple
existing roles under the PIEL Act, including 'a body declared in the Gazette', 'eligible
industry body' and 'designated industry body'. The concept of 'nominated industry
representative body' is not intended to cover other roles that industry bodies fulfil
outside of the agricultural levies legislation.
131. The policy intention is that industry representative bodies named under the PIEL Act
would be declared as nominated industry representative bodies under the proposed Act.
Where a body no longer exists or performs the role, or has changed its name, it is
intended that updates would be made to match current industry arrangements. However,
the declaration of any particular body would remain a matter for the Minister.
132. This section would also enable existing dairy and wool levy poll arrangements to be
maintained, as well as enabling other industries to establish a levy poll.
133. 'Nominated polling body' would be a new term to describe bodies that would conduct
polls with industry in relation to levy settings. Nominated polling bodies offer a distinct
consultation and voting mechanism for those industries that choose to use polls.
134. Nominated industry representative bodies and nominated polling bodies provide two
different mechanisms for industry consultation about setting or amending the rate of a
levy. The policy intention is that where a nominated industry representative body is
required to be consulted about the whole of the rate or a part of the rate of a particular
levy, a nominated polling body would not be required to be consulted. This is intended
to be achieved by there only ever being either a nominated industry representative body,
or a nominated polling body for any part of the rate (either the whole of the rate or a part
of the rate), never both. This would be managed administratively and would be a
continuation of current practice.
135. This section would enable all industry representative bodies and polling bodies named in
relation to excise levies to be nominated in a single legislative instrument. The use of a
legislative instrument would allow for updates to more easily be made as names change,
bodies merge or new bodies are established.
136. This section would also provide that, if the Minister determines a body to be a nominated
industry representative body or polling body, the body must be consulted, and may make
recommendations to the Minister about either the whole of the rate or the specified part
or parts of the rate, before regulations are made setting or amending the rate of a levy.
137. The requirement to consult with these bodies so declared before making regulations
setting or amending levy rates, regardless of the title given to those bodies in the
legislation, is a longstanding and foundational element of the agricultural levy system.
The requirements for consultation and industry recommendations are intended to prevent
the implementation of rates of levy above those recommended by industry.
138. This section would provide for consistent representative and consultation arrangements
across levied industries and clarify the roles and obligations for all participants. This
would also address industry feedback that they have previously found it hard to identify
their legislated role.
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Nominated industry representative bodies
139. Subsection 23(1) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated industry representative body and specify
one or more levies in relation to that specified body.
140. Subsection 23(2) would provide that, if the Minister does so, before regulations are made
setting or amending a rate of levy the following consultation must occur:
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 23(3)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 23(2)(a)); or
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 23(3)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 23(2)(b)).
141. Subsection 23(3) would provide that the Minister may, in the instrument made under
subsection 23(1):
a. specify the whole of the rate of a levy in relation to a body for the purposes of
paragraph 23(2)(a) (paragraph 23(3)(a)); or
b. specify a part or parts of the rate of a levy in relation to a body for the purposes of
paragraph 23(2)(b) (paragraph 23(3)(b)).
142. Subsection 23(4) would provide that before making a recommendation about the whole
of the rate or a specified part or parts of the rate, a nominated industry representative
body must consult with the bodies (if any) specified in relation to the body under
subsection 23(5).
143. Subsection 23(5) would allow the Minister to specify in the legislative instrument under
subsection 23(1) bodies in relation to a nominated industry representative body for the
purposes of subsection 23(4).
Nominated polling bodies
144. Subsection 23(6) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated polling body and specify one or more
levies in relation to that specified body.
145. Subsection 23(7) would provide that, if the Minister does so, before regulations are made
setting or amending a rate of levy the following consultation must occur:
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 23(8)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 23(7)(a)); or
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 23(8)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 23(7)(b)).
146. Subsection 23(8) would provide that the Minister may in the instrument under subsection
23(6):
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a. specify the whole of the rate of a levy in relation to a body for the purposes of
paragraph 23(7)(a) (paragraph 23(8)(a)); or
b. specify a part or parts of the rate of a levy in relation to a body for the purposes of
paragraph 23(7)(b) (paragraph 23(8)(b)).
147. Subsection 23(9) would provide that before making a recommendation about the whole
of the rate or a specified part or parts of the rate, a nominated polling body must ensure a
poll is conducted in accordance with the requirements for, or in relation to, the conduct
of a poll that are specified under subsection 23(10). The subsection would further require
that any recommendation made by the nominated polling body must be in accordance
with the results of the poll.
148. Subsection 23(10) would allow the Minister to specify in the legislative instrument under
subsection 23(6) requirements that are for or in relation to the conduct of a poll for the
purposes of subsection 23(9).
Section 24 Treatment of partnerships
149. This section would provide for the Act and the regulations to apply to a partnership as if
it were a person, but with the changes set out in the section. This is to ensure that these
types of legal entities are captured as levy payers within the agricultural levy system.
This would reflect the reality that many agricultural businesses are partnerships. Where
the Act and regulations refer to 'a person' this would include a partnership, subject to the
remaining provisions of the section.
150. Subsection 24(2) would provide that an obligation that would otherwise be imposed on
the partnership is imposed on each partner, but may be discharged by any of the
partners. For example, where the regulations name a person liable to pay levy, this
makes the partnership liable to pay levy, but any member of the partnership may pay
levy to discharge the liability for the partnership as a whole.
151. Subsection 24(3) would provide that if the Act or regulations would permit something to
be done by the partnership, the thing may be done by one or more members of the
partnership on behalf of the partnership.
152. Subsection 24(4) would provide that a change in the composition of a partnership would
not affect the continuity of the partnership for the purposes of the Act and the
regulations made under the Act. Therefore, a partnership may continue to be liable to
pay levy even if the members of the partnership change during the relevant period.
Section 25 Treatment of trusts
153. This section would provide for the Act and the regulations to apply to a trust as if it were
a person, but with the changes set out in the section. This is to ensure that these types of
legal entities are captured as levy payers within the agricultural levy system. This would
reflect the reality that many agricultural businesses are trusts. Where the Act and
regulations refer to 'a person' this would include a trust, subject to the remaining
provisions of the section.
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Trusts with a single trustee
154. Subsection 25(2) would provide that if the trust has a single trustee:
a. an obligation that would otherwise be imposed on the trust is imposed on the
trustee instead; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by the trustee.
Trusts with multiple trustees
155. Subsection 25(3) would provide that if the trust has two or more trustees:
a. an obligation that would otherwise be imposed on the trust by the Act or
regulations would be imposed on each trustee instead, but may be discharged by
any of the trustees; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by one or more trustees on behalf of the trust.
156. For example, where the regulations name a person liable to pay levy, this makes the trust
liable to pay levy, but any trustee may pay levy to discharge the liability for the trust as a
whole.
Section 26 Treatment of unincorporated bodies or associations
157. This section would provide for the Act and the regulations to apply to an unincorporated
body or association as if it were a person, but with the changes set out in the section.
This is to ensure that these types of legal entities are captured as levy payers within the
agricultural levy system. Where the Act and regulations refer to 'a person' this would
include an unincorporated body or association, subject to the remaining provisions of the
section.
158. Subsection 26(2) would provide that an obligation that would be imposed on the
unincorporated body or association is imposed on each member of the unincorporated
body's or association's management committee, but may be discharged by any of the
committee members. For example, where the regulations name a person liable to pay
levy, this makes the unincorporated body or association liable to pay levy, but any
member of the management committee may pay levy to discharge the liability for the
body or association as a whole.
159. Subsection 26(3) would provide that if the Act or regulations would permit something to
be done by the unincorporated body or association, the thing may be done by one or
more members of the unincorporated body's or association's management committee on
behalf of the body or association.
Section 27 Making of regulations
160. This section would enable the Governor-General to make regulations under the Act. The
regulations may prescribe matters required or permitted by the Act to be prescribed by
the regulations. The regulations may also prescribe matters necessary or convenient to
be prescribed for carrying out or giving effect to the Act.
26
161. The Act would establish a framework that enables levies to be imposed in relation to
different products and goods. As the settings for each levy are different, it is necessary
and appropriate for that detail to be included in the regulations rather than the Act. For
example, levy settings for cotton, such as how it is imposed, the rate of the levy and any
exemptions, are different from the levy settings for melons, which are also different
from the levy settings for wool and so on.
162. By enabling all levy imposition settings to be located together in the regulations, rather
than split between the Act and the regulations, the proposed Act would increase
accessibility, flexibility and fairness for industry in understanding and seeking to adjust
their levy settings.
163. There would be several provisions of the Act that enable matters to be prescribed by the
regulations and which would trigger the regulation making power set out in section 27.
164. As the regulations would be legislative instruments, the Legislation Act 2003
(Legislation Act) would apply to the regulations and govern such matters as
registration, Parliamentary oversight (disallowance) and sunsetting.
Consultation--setting or amending the rate of a levy
165. Subsection 27(2) would provide for consultation which must occur before regulations are
made setting or amending the rate of a levy. The consultation requirements account for
three different scenarios:
a. if one or more nominated industry representative bodies must be consulted in
accordance with section 23;
b. if a nominated polling body must be consulted in accordance with section 23; or
c. if neither a nominated industry representative body nor a nominated polling body
must be consulted, in which case, appropriate consultation must be undertaken with
bodies and persons involved in the industry in relation to the levy.
166. Paragraphs 27(2)(a) and (b) would provide that if one or more nominated industry
representative bodies or a nominated polling body must be consulted, the Minister must
be satisfied of two things. Firstly, that the consultation has occurred. Secondly, that if
such a nominated industry representative body or a nominated polling body makes a
recommendation to the Minister about the rate, the rate in the proposed regulations does
not exceed the rate so recommended by the nominated body.
167. Paragraph 27(2)(c) would provide that if neither a nominated industry representative
body nor a nominated polling body must be consulted about the proposed regulations,
the Minister must be satisfied of two things. Firstly, that appropriate consultation has
been undertaken with bodies and persons involved in the industry in relation to the levy.
Secondly, that any recommendations made by those bodies or persons about the rate
have been considered.
168. A note to subsection 27(2) would refer the reader to section 17 (consultation) of the
Legislation Act for consultation requirements generally. Section 17 of the Legislation
Act provides that before a legislative instrument is made, the rule-maker must be
satisfied that there has been undertaken any consultation that is considered by the rule-
maker to be appropriate, and reasonably practicable to undertake.
27
169. The requirements for consultation and industry recommendations are intended to prevent
the setting or amending of rates of levy above those recommended by industry where
there is a nominated industry representative body or a nominated polling body specified
in relation to the levy.
170. The consultation arrangements set out in this section and section 23 would make levy
consultation roles clearer, more consistent and easier to find and understand. It is
intended that these provisions would operate as follows:
a. If there was a single industry representative body nominated in relation to a levy
rate, and that body made a recommendation about the setting or amending of the
rate, then the rate could not be set higher than that recommendation.
b. If there were multiple industry representative bodies nominated in relation to a levy
rate, and each of those bodies made recommendations about the setting or
amending of the rate, then the rate could not be set higher than those
recommendations (the lowest recommendation being the effective
recommendation). For example, if one body recommended a 2% increase to the
levy and another body recommended only a 1% increase to the levy, then the rate
could not be increased by more than 1%.
c. There is no requirement to give a recommendation. The failure of one or more
nominated industry representative bodies to make a recommendation about the
setting or amending of the rate would not invalidate the recommendations of any
other nominated industry representative bodies.
d. The Minister would not be bound to make a regulation setting or amending the rate
of a levy in any case, including if nominated industry representative bodies have
not made uniform recommendations or have failed to make recommendations.
171. Two industries with excise levies imposed under the PIEL Act and Regulations have
levy polls: dairy and wool. This section and section 23 would allow for the dairy poll
and wool poll to be maintained. They would also operate to enable a levy poll to be
established in relation to other levies. These provisions would not mandate the
establishment of levy polls.
172. Where a nominated polling body is named in relation to a levy, before regulations could
be made setting or amending the rate of the levy:
a. the nominated polling body must ensure a poll is conducted in accordance with the
requirements specified under subsection 23(10), that are for, or in relation to, the
conduct of the poll;
b. the nominated polling body must be consulted and may make recommendations to
the Minister about the rate. The recommendation must be in accordance with the
results of the poll; and
c. if the nominated polling body makes a recommendation about the rate, the rate
must not be set higher than the rate so recommended.
173. In addition to new industries, a small number of established industries may have neither
a nominated industry representative body nor a nominated polling body. In the cases
28
where there is neither, before making regulations setting or amending the rate of the
levy:
a. appropriate consultation would need to be undertaken about the proposed change
with bodies and persons involved in the industry in relation to the levy (such as
proposed levy payers, collection agents, industry groups or other relevant persons
or bodies); and
b. any recommendations made by those bodies or persons about the rate would have
to be considered.
174. Consultation with industry about levy rates is an important feature of the agricultural
levy system and would remain so under the modernised legislative framework.
Consistent with current practice, it is expected that a levy rate would only rarely, if ever,
be set or amended without clear evidence that this was supported by the majority of levy
payers. That evidence is typically provided to government through a levy proposal
prepared in accordance with the government's Levy Guidelines: How to establish or
amend agricultural levies. Updated guidelines would be released prior to
commencement of the proposed Act, and published on the department's website.
175. Subsection 27(3) would provide that the regulations would be valid and enforceable if
the consultation as described in subsection 27(2) does not occur for whatever reason.
This provision would operate as a safeguard in case of procedural errors.
Other instruments
176. Subsection 27(4) would provide that the regulations made under the Act may make
provision in relation to a matter by conferring on the Minister or the Secretary a power
to make a legislative instrument.
177. It is considered appropriate to enable the regulations to confer a power to make
legislative instruments on the Minister or the Secretary to allow for flexibility, and to
facilitate ease of implementing arrangements tailored to suit industry needs.
Incorporation of other instruments
178. Subsection 27(5) would provide that, despite subsection 14(2) of the Legislation Act, the
regulations may make provision in relation to a matter by applying, adopting or
incorporating, with or without modification, any matter contained in an instrument or
other writing as in force or existing from time to time.
179. Subsection 14(2) of the Legislation Act provides that, unless the contrary intention
appears, a legislative instrument may not make provision in relation to a matter by
applying, adopting or incorporating any matter contained in an instrument or other
writing as in force or existing from time to time.
180. Subsection 27(5) would therefore provide a contrary intention to subsection 14(2) of the
Legislation Act. That is, the incorporation of certain documents by reference would not
be limited to the instrument or other writing as at the date of incorporation.
181. It is considered appropriate to enable the incorporation of documents as they exist from
time to time because the documents that would be referred to would, in general, be
technical reference materials or production standards that are updated as required.
29
182. It is intended that where the regulations would incorporate such documents, they would
either be freely and publicly available, or they would be documents required in the
ordinary course of doing business in the particular industry. For example, the tea tree oil
levy is imposed with reference to the ISO standard for tea tree oil production. In
Australia, industry practice requires tea tree oil to conform to this standard, so access to
the standard is already an industry requirement.
183. In order to comply with paragraph 15J(2)(c) of the Legislation Act, the explanatory
statements for the regulations would contain a description of the relevant incorporated
material and indicate how it may be obtained.
No limit on subsection (1)
184. Subsection 27(6) would clarify that subsections 27(4) and (5) do not limit
subsection 27(1), which enables the Governor-General to make regulations under the
Act.
30
PRIMARY INDUSTRIES (CUSTOMS) CHARGES BILL 2023
NOTES ON CLAUSES
Part 1--Preliminary
Section 1 Short title
1. This section would provide for the short title of the proposed Act to be the Primary
Industries (Customs) Charges Act 2023 (the Act).
Section 2 Commencement
2. This section would provide for the commencement of each provision of the proposed Act,
as set out in the table in subsection 2(1).
3. Item 1 in the table would provide that the whole of the proposed Act will commence on
1 January 2025.
4. A note to subsection 2(1) would state that the table relates only to the proposed Act as
originally enacted and it will not be amended to deal with any later amendments of the
proposed Act.
5. Subsection 2(2) would provide that any information in column 3 of the table is not part of
the proposed Act. Information may be inserted in column 3 of the table, or information in
it may be edited, in any published version of the proposed Act. This would allow
information to be inserted in column 3 to assist the reader after commencement.
Section 3 Simplified outline of this Act
6. This section would set out a simplified outline of the proposed Act. The simplified outline
would provide that the proposed Act authorises the regulations to impose charges in
relation to:
a. animal products, plant products, fungus products or algal products that are produce
of a primary industry, and
b. goods that are of a kind consumed by, or used in the maintenance or treatment of,
animals, plants, fungi or algae.
7. In addition to imposing a particular charge, the regulations would also set out:
a. any exemptions from the charge, and
b. the rate of the charge, and
c. the person who is liable to pay the charge (the charge payer).
8. The simplified outline is included to assist the reader to understand the substantive
provisions of the proposed Act; however, it is not intended to be comprehensive. The
reader should rely on the substantive provisions of the proposed Act to which the outline
relates.
31
Section 4 Definitions
9. This section would provide the definitions used in the proposed Act.
10. Many of the key definitions used in the proposed Act are replicated in equivalent
provisions of the proposed Primary Industries (Excise) Levies Act and the proposed
Primary Industries (Services) Levies Act.
11. For information on the following terms, refer to the explanation provided for section 4
(definitions) of the proposed Primary Industries (Excise) Levies Act: algae, algal product,
animal, animal product, aquaculture, fishing, forest operations, fungus, fungus
product, plant, plant product, produce of a primary industry, and product.
12. An explanation is provided below for key definitions used only in the proposed Act.
charge
13. This definition would provide that charge means a charge imposed by regulations made
for the purposes of Part 2 or 3 of the proposed Act.
14. The definition would also apply, for example, in Part 4 (Rate of charge), Part 5 (Charge
payer) and Part 6 (Other matters) so that a reference to a "charge" includes a charge
imposed by regulations made for the purposes of Part 2 or 3 of the proposed Act.
Section 5 Crown to be bound
15. This section would provide that the proposed Act would bind the Crown in right of each
of the States, of the Australian Capital Territory and of the Northern Territory. However,
it would not bind the Crown in right of the Commonwealth.
Section 6 Application of this Act in external Territories
16. This section would provide that the proposed Act and the regulations made under the
proposed Act do not automatically extend to the external Territories.
17. Subsection 6(2) would provide that the regulations made under the proposed Act may
extend the proposed Act, and any provisions of the regulations, to an external Territory
that is prescribed by the regulations. This would enable the regulations to extend the
proposed Act and any provisions of the regulations to external Territories on a case-by-
case basis.
18. Subsection 6(3) provides that each charge does not apply to products or goods exported to
an external Territory. This is to provide that charges do not apply to the export of products
or goods from the mainland to any of the external Territories.
32
Part 2--Charges in relation to products that are produce of a
primary industry
Overview
19. Part 2 would authorise the regulations made under the Act to impose charges in relation to
products that are produce of a primary industry. Product and produce of a primary
industry are, in turn, defined in section 4.
20. The part would also authorise the regulations made under the Act to impose two or more
charges, and to provide for exemptions from a charge under the part.
Section 7 Imposition of charges
21. This section would provide that the regulations made under the Act may impose a charge
in relation to one or more specified products that are produce of a primary industry in the
circumstances prescribed by the regulations.
22. Section 7 would allow for the continuation of charges imposed under the Charge Acts in
relation to products that are produce of a primary industry.
23. Section 7 would also enable new charges to be imposed in relation to other products that
are produce of a primary industry, noting that the products must be animal, fungus, plant,
or algal products. This section is intended to be broad enough to support any future import
or export charges on produce of primary industry that is produced by the Australian
agriculture, fisheries and forestry sectors.
24. A note to subsection 7(1) would explain that products may be specified by name, by
inclusion in a specified class, or in any other way.
25. The policy intention is for the scope of the imposition power in Part 2 of the proposed Act
to be similar to that of the PICC Act, which at a high level, limits the imposition of
charges to animal and plant products that are produce of primary industry.
26. This is to ensure that charges imposed under the Charge Acts could be continued under
the proposed Act, while intentionally providing for charges to be imposed in relation to
products that are algal products that are produce of a primary industry.
27. The following key definitions (defined in section 4 of the Act) relate to understanding the
intended scope of the imposition power for charges imposed under Part 2 of the proposed
Act: produce of a primary industry, product, algae, algal product, animal, animal
product, plant, plant product, fungus and fungus product.
28. The definitions of animal, animal product, plant, and plant product are intended to be
sufficiently broad to enable charges to be imposed in relation to the wide range of animal
and plant products subject to charges under the Charge Acts. They are also intended to be
sufficiently broad to enable charges to be imposed in relation to any animal or plant
products that primary industry sectors may seek to have charged in the future.
29. Algae and algal products have intentionally been included as explicit terms to ensure that
charges could be imposed in relation to the wide range of algae and seaweeds that are, or
33
could be, grown, harvested or produced in Australia in future. The definition of algae is
intended to capture seaweeds such as Asparagopsis and kelp, and microalgae such as
Spirulina. It is intended that the definitions of algae and algal product are sufficiently
broad to enable levies to be imposed in relation to any algae that primary industry sectors
may seek to have levied in future.
30. It is expected that the algae and seaweed industries would continue to develop in Australia
in the coming decades. Enabling charges to be imposed in relation to algal products that
are produce of a primary industry would provide those industries with the opportunity to
participate in the agricultural levy system in future.
31. Fungus and fungus products have intentionally been included as explicit terms to ensure
that charges could be imposed in relation to any fungus products that are, or could be,
grown, harvested or produced in Australia in future. To provide greater scientific
accuracy, fungus would be defined separately from plants, noting this was not the case
under the PICC Act. This would allow for the continuation of charges on Agaricus
mushrooms, and for levies to be imposed in relation to any fungus product that primary
industry sectors may seek to have charged in the future. For example, yeast or truffles.
Minister to be satisfied of matters
32. Subsection 7(3) would provide that, before the Governor-General makes regulations for
the purposes of subsection 7(1), the Minister must be satisfied that the imposition of the
charge will result in expenditure on one or more of the following:
a. the marketing, advertising or promotion of products of one or more primary
industries (paragraph 7(3)(a));
b. research and development activities for the benefit of one or more primary
industries (paragraph 7(3)(b));
c. activities, including biosecurity activities relating to the promotion or maintenance
of the health of plants, animals, fungi or algae (paragraph 7(3)(c));
d. matters relating to a biosecurity response (paragraph 7(3)(d));
e. activities relating to the National Residue Survey (paragraph 7(3)(e));
f. any other activity prescribed by the regulations in relation to one or more primary
industries and for the benefit of one or more primary industries (paragraph 7(3)(f)).
33. The intended purpose of subsection 7(3) would be to require that a charge under Part 2 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
34. Paragraphs 7(3)(a)-(e) would reflect the five broad purposes for which agricultural
charges were established under the Charge Acts.
35. Paragraph 7(3)(c) would allow for the continuation of charges colloquially referred to as
AHA or PHA charges. The regulations made under the proposed Act would refer to these
as the 'biosecurity activity' component of a charge.
34
36. Paragraph 7(3)(d) would allow for the continuation of charges colloquially referred to as
EADR charges and EPPR charges. These charges are imposed primarily to fund industry
contributions to the costs of a response to a pest or disease incursion under a biosecurity
response deed such as the Emergency Animal Disease Response Agreement and the
Emergency Plant Pest Response Deed, including repayment over time where the
government has underwritten the industry's contribution in the first instance (as permitted
by the deed arrangements). The regulations made under the proposed Act would refer to
these as the 'biosecurity response' component of a charge.
37. Paragraphs 7(3)(c) and 7(3)(d) are intended to cover the charge funded operations
currently undertaken by AHA and PHA. They are also intended to be broad enough to
cover future developments in animal and plant health, such as industry and government
jointly agreeing a new emergency response deed.
38. Paragraph 7(3)(f) is intended to provide some flexibility in case, in the future, industry
and government agree to extend the agricultural levy system to include expenditure for an
additional purpose. Such expenditure would need to be for the benefit of one or more
primary industries.
Duty of customs
39. Subsection 7(4) would clarify that section 7 authorises the imposition of a charge only so
far as the charge is a duty of customs within the meaning of section 55 of the Constitution.
40. Pursuant to section 55 of the Constitution, laws imposing duties of customs must only
deal with duties of customs. Therefore, section 7 would authorise the imposition of duties
of customs within the meaning of section 55 of the Constitution, and would not authorise,
for example, the imposition of duties of excise.
Section 8 Imposition of 2 or more charges
41. This section would clarify that Part 2 of the Act does not prevent the imposition of two or
more charges, whether the charges are imposed in relation to the same products or in
relation to different products. This would have the effect that the regulations could impose
two or more charges.
42. Under section 7 of the Act, it is possible for different charges, with different rates,
different charge payers and different purposes, to be imposed, including on the same
product. It is necessary to enable the imposition of two of more charges on the same
products so that charge can be payable by all industry members. This allows for exporters
and importers of the same product (as one example) to each pay charge that will benefit
their primary industry.
43. For example, two forestry charges are imposed under the PICC Act: the forest industries
(export) charge and the forest industries (import) charge. Both charges are imposed on
logs, but one is paid by the exporter and the other is paid by the importer. This provision
would enable these two distinct charges (among others) to be re-established.
Section 9 Exemptions from charge
44. This section would authorise the regulations made under the Act to provide for
exemptions from a charge imposed under Part 2. The effect of this section would be to
35
allow the regulations to provide for the circumstances under which charge would not be
imposed in relation to products that are produce of a primary industry. Enabling the
regulations to set out, as exemptions, the circumstances under which charge would not be
imposed is appropriate as it would provide the flexibility to continue designing charges
that work for each industry, including through the use of such exemptions. Exemptions
are also used to ensure charges are equitable and cost effective.
45. Exemptions are commonly sought by industry to exempt small producers from paying a
charge so that the charge is more efficient and cost effective to collect. These exemptions
might be based on the volume of export or the total amount of charge the exporter would
be liable to pay.
46. Exemptions are also commonly used to ensure levy or charge is only paid once in relation
to a particular product. For example, if levy has already been imposed, there is often an
exemption from paying a charge on the same product.
47. Section 9 of the Act would allow for such arrangements to continue.
48. Part 3--Charges in relation to goods consumed by, or used in the maintenance or
treatment of, animals, plants, fungi or algae.
Overview
49. Part 3 would authorise the regulations made under the Act to impose charges in relation to
goods consumed by, or used in the maintenance or treatment of, animals, plants, fungi or
algae.
50. The part would also authorise the regulations made under the Act to impose two or more
charges, and to provide for exemptions from a charge under the part.
Section 10 Imposition of charges
51. This section would provide that the regulations made under the Act may impose a charge
in relation to one or more specified goods that are of a kind consumed by, or used in the
maintenance or treatment of, animals, plants, fungi or algae, and in the circumstances
prescribed by the regulations.
52. A note to subsection 10(1) would explain that goods may be specified by name, by
inclusion in a specified class, or in any other way.
53. The proposed Primary Industries (Excise) Levies Act contains an equivalent provision,
primarily intended to allow for the horse disease response levy, currently imposed in
stand-alone legislation, to be incorporated into regulations made under that Act.
54. In incorporating the horse disease response levy into the new legislative framework, it was
considered appropriate to also enable charges of a similar kind to be imposed under this
Act, so as not to limit those arrangements to excise levies.
55. This section would enable those charges to be imposed as a biosecurity response charge in
regulations made under the proposed Act. Most agricultural charges will continue to be
imposed directly in relation to products that are produce of a primary industry. However,
36
there are occasions where it may be more efficient or effective to impose a charge under
this section of the proposed Act.
Minister to be satisfied of matters
56. Subsection 10(2) would provide that, before the Governor-General makes regulations for
the purposes of subsection 10(1), the Minister must be satisfied that the imposition of the
charge will result in expenditure on activities, including biosecurity activities, relating to
the promotion or maintenance of the health of plants, animals, fungi or algae, and/or
matters relating to a biosecurity response.
57. The intended purpose of subsection 10(2) would be to require that a charge under Part 3 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
58. Subsection 10(2) would reflect the existing animal and plant health, and biosecurity
response purposes for which agricultural charges were established under the Charge Acts.
59. Similar to paragraph 7(3)(c), paragraph 10(2)(a) would also allow for the continuation of
charges colloquially referred to as AHA or PHA charges. The regulations made under the
proposed Act would refer to these as the 'biosecurity activity' component of a charge.
60. Similar to paragraph 7(3)(d), paragraph 10(2)(b) would also allow for the continuation of
charges colloquially referred to as EADR or EPPR charges. The regulations made under
the proposed Act would refer to these as the 'biosecurity response' component of a
charge.
61. Paragraphs 10(2)(a) and 10(2)(b) are intended to cover the charge funded operations
currently undertaken by AHA and PHA. They are also intended to be broad enough to
cover future developments in animal and plant health, such as industry and government
jointly agreeing a new emergency response deed.
Duty of customs
62. Subsection 10(3) would clarify that section 10 authorises the imposition of a charge only
so far as the charge is a duty of customs within the meaning of section 55 of the
Constitution. This would be consistent with equivalent provisions under subsection 7(4) of
the proposed Act, allowing only for duties of customs to be imposed under Part 2.
Section 11 Imposition of 2 or more charges
63. This section would clarify that Part 3 of the Act does not prevent the imposition of two or
more charges, whether the charges are imposed in relation to the same goods or in relation
to different goods. This would have the effect that the regulations may impose two or
more charges.
64. This would be consistent with equivalent provisions under section 8 of the proposed Act,
allowing for the imposition of 2 or more charges under Part 2.
37
Section 12 Exemptions from charge
65. This section would authorise the regulations made under the Act to provide for
exemptions from a charge imposed under Part 3. The effect of this section would be to
allow the regulations to provide for circumstances under which charge would not be
imposed in relation to specified goods that are of a kind consumed by, or used in the
maintenance or treatment of, animals, plants, fungi or algae.
66. This would be consistent with equivalent provisions under section 9 of the proposed Act,
providing for the circumstances under which charge would not be imposed under Part 2.
38
Part 4--Rate of charge
Overview
67. Part 4 would provide for matters relating to the rate of charge, components of charge,
flexibility in relation to rates of charge, and nil or zero rates.
Section 13 Rate of charge
68. This section would provide that the rate of a charge imposed under Part 2 or 3 is worked
out in accordance with the regulations made under the Act. Section 13 operates in
conjunction with section 24, which provides for the making of regulations. The
regulations would prescribe the rate of a charge comprised of either a single charge
component or the sum of charge components.
69. This section does not provide a maximum charge rate. This approach is consistent with
recommendations made by the Productivity Commission in its report Rural Research and
Development Corporations (2011) that maximum levy rates should be abolished from the
agricultural levies legislation. Consultation with industry stakeholders has shown they are
largely supportive of removing maximum rates from the legislation.
Section 14 Components of charge
70. This section would provide that the rate of a charge imposed under Part 2 or 3 may be
expressed to be equal to a single component prescribed by the regulations made under the
Act, or the sum of such components as are prescribed by the regulations.
71. The regulations made under the Act would clearly label each component with its
corresponding purpose. For example, 'research and development component', 'marketing
component' and so on.
72. Under the Charge Acts different kinds of charge are imposed in relation to the same
products allowing for expenditure on one or more of the existing purposes of the levy
system.
73. This provision would enable one charge to be imposed and for the rate of the charge to be
comprised of different components. This allows the flexibility for one charge to result in
expenditure across any or all of the purposes of the agricultural levy system. For example,
the buffalo export charge will be imposed to fund expenditure on research and
development, whereas the custard apple export charge will be imposed to fund
expenditure on research and development, and marketing.
74. Subsection 14(2) would clarify that subsection 14(1) does not limit the operation of
section 13, which provides that the rate of a charge imposed under Part 2 or 3 is worked
out in accordance with the regulations made under the Act.
Section 15 Flexibility in relation to rates of charge
75. This section would provide that different rates of the same charge imposed under Part 2 or
3 may be prescribed by the regulations made under the Act for different kinds of products
or goods.
39
76. This would allow different charge rates to be set to meet the specific needs of individual
industries. For example, an industry with high research and development needs may
choose to set a higher rate for a research and development component than an industry
with low research and development needs.
77. This would also allow different charge rates to be set to meet the specific needs within
individual industries. For example, the passionfruit export charge has different rates for
passionfruit exported for processing and passionfruit exported for any other purpose.
These rates reflect what industry proposes to government as being suitable for its needs
and helps ensure that charges fairly apply to different types of transactions.
78. Subsection 15(2) would clarify that subsection 15(1) does not limit the operation of
section 13, which provides that the rate of a charge imposed under Part 2 or 3 is worked
out in accordance with the regulations made under the Act.
79. Subsection 15(3) would clarify that subsection 15(1) does not limit the operation of
subsection 33(3A) of the Acts Interpretation Act, which relates to the scope of powers
where an Act confers a power to make, among other instruments, regulations, with respect
to particular matters.
Section 16 Nil or zero rates
80. This section would provide that the rate of a charge imposed under Part 2 or 3, or a
component of the rate of a charge, may be expressed to be nil, zero, or $0 or 0 cents per
unit of measure or 0% of the sale price of a product or goods.
81. This would allow for a charge to be imposed with a rate set to nil or zero if required.
There are several reasons why a charge rate might be set to nil, most commonly this
occurs with biosecurity response charges, but a nil rate can be set for any charge imposed
under Part 2 or 3.
82. Biosecurity response charges are often first imposed with a nil rate. This allows for a
quick activation of the charge, by setting a positive rate, in the event of a relevant
biosecurity response. This provides certainty for the industry and the Commonwealth that
a payment (including repayment) mechanism is in place if required.
83. Other reasons for setting a charge rate to nil can include the cost of collection exceeding
the revenue raised from the charge, or a change to the purposes for which the charge has
been imposed. For example, industries sometimes seek to have the balance of their charge
components adjusted in response to changing priorities, without increasing the total
amount of charge they are paying. One way of achieving this is for one component of the
charge (such as marketing) to be reduced to nil, while increasing another component (such
as research and development) by the same amount to serve the higher priority. Such
adjustments can be temporary or permanent.
40
Part 5--Charge payer
Overview
84. Part 5 would provide for the charge payer.
Section 17 Charge payer
85. This section would provide that a charge imposed under Part 2 or 3 is payable by the
person worked out in accordance with the regulations made under the Act.
86. Naming the charge payer for each charge in the regulations provides the necessary
flexibility to prescribe this person on a case-by-case basis. For example, the charge payer
could be the owner of the good or product immediately before export, the person who
imports or exports the good or product, or another relevant person in the industry. This
flexibility is a crucial part of the levy system.
41
Part 6--Other matters
Overview
87. Part 6 would provide for other matters, including:
• that the Act would not impose charge on State property
• the exclusion of net GST from the price of products or goods or amount paid for
products or goods
• nominated industry representative bodies and nominated polling bodies
• the treatment of partnerships, trusts and unincorporated bodies or associations
• the making of regulations under the Act.
Section 18 Act does not impose charge on property of a State
88. This section would clarify that the Act does not authorise the imposition of a tax on
property of any kind belonging to a State.
89. Subsection 18(2) would provide that property of any kind belonging to a State has the
same meaning as in section 114 of the Constitution. Section 114 of the Constitution
provides that the Commonwealth may not impose any tax on property of any kind
belonging to a State.
90. Subsection 18(3) would provide an assumption for the purposes of section 18, namely,
that a reference in section 114 of the Constitution to a State includes a reference to the
Australian Capital Territory and the Northern Territory.
Section 19 Net GST not included in price of product or goods or amount paid for
product or goods
91. This section would provide a contrary intention to section 177-12 of the GST Act.
Subsection 177-12(1) of the GST Act provides that, in any Act, unless the contrary
intention appears, a reference to a price relating to a supply, or a proposed supply, is taken
to include the net GST (if any) that is, or would be, payable by an entity making the
supply.
92. The intention of this provision is to ensure charge is not paid on amounts of GST. For
example, if the sale price of a product was $4.40 including GST, the levy would be
calculated on a sale price of $4.00 as the GST exclusive value.
Section 20 Nominated industry representative bodies and nominated polling bodies
93. This section would provide that the Minister may, by legislative instrument, determine
that a specified body is a nominated industry representative body or a nominated polling
body, respectively, and specify one or more charges in relation to that body.
94. This section would streamline arrangements for declaring industry representative bodies
and make uniform the varied titles used for industry representative body functions.
42
95. The 'nominated industry representative body' term is intended to consolidate multiple
existing roles under the PICC Act, including 'a body declared in the Gazette', 'eligible
industry body' and 'designated industry body'. The concept of 'nominated industry
representative body' is not intended to cover any other roles that industry bodies fulfil
outside of the agricultural levies legislation.
96. The policy intention is that industry representative bodies named under the PICC Act
would be declared as nominated industry representative bodies under the proposed Act.
Where a body no longer exists or performs the role, or has changed its name, it is intended
that updates would be made to match current industry arrangements. However, the
declaration of any particular body would remain a matter for the Minister.
97. This section would enable 'levy' poll arrangements to be established in relation to
charges. This would be consistent with equivalent provisions in section 23 of the proposed
Primary Industries (Excise) Levies Act, which were included to enable existing dairy and
wool levy poll arrangements to be maintained, as well as enabling other industries to
establish a levy poll.
98. 'Nominated polling body' would be a new term to describe bodies that would conduct
polls with industry in relation to charge settings. Nominated polling bodies offer a distinct
consultation and voting mechanism for those industries that choose to use polls.
99. Nominated industry representative bodies and nominated polling bodies provide two
different mechanisms for industry consultation about setting or amending the rate of a
charge. The policy intention is that where a nominated industry representative body is
required to be consulted about the whole of the rate or a part of the rate of a particular
charge, a nominated polling body would not be required to be consulted. This is intended
to be achieved by there only ever being either a nominated industry representative body,
or a nominated polling body for any part of the rate (either the whole of the rate or a part
of the rate), never both. This would be managed administratively and would be a
continuation of current practice.
100. This section would enable all industry representative bodies and polling bodies named in
relation to customs charges to be nominated in a single legislative instrument. The use of
a legislative instrument would allow for updates to more easily be made as names
change, bodies merge or new bodies are established.
101. This section would also provide that, if the Minister determines a body to be a
nominated industry representative body or polling body, the body must be consulted, and
may make recommendations to the Minister about either the whole of the rate or the
specified part or parts of the rate, before regulations are made setting or amending the
rate of a charge.
102. The requirement to consult with these bodies so declared before making regulations
setting or amending charge rates, regardless of the title given to those bodies in the
legislation, is a longstanding and foundational element of the agricultural levy system.
103. The requirements for consultation and industry recommendations are intended to prevent
the implementation of rates of charge above those recommended by industry.
43
104. This section would provide for consistent representative and consultation arrangements
across charged industries and clarify the roles and obligations for all participants. This
would also address industry feedback that they have previously found it hard to identify
their legislated role.
Nominated industry representative bodies
105. Subsection 20(1) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated industry representative body and specify
one or more charges in relation to that specified body.
106. Subsection 20(2) would provide that, if the Minister does so, before regulations are
made setting or amending of a rate of charge the following consultation must occur:
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 20(3)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 20(2)(a)); or
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 20(3)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 20(2)(b)).
107. Subsection 20(3) would provide that the Minister may, in the instrument made under
subsection 20(1):
a. specify the whole of the rate of a charge in relation to a body for the purposes of
paragraph 20(2)(a) (paragraph 20(3)(a)); or
b. specify a part or parts of a rate of a charge in relation to a body for the purposes of
paragraph 20(2)(b) (paragraph 20(3)(b)).
108. Subsection 20(4) would provide that before making a recommendation about the whole
of the rate or a specified part or parts of the rate, a nominated industry representative
body must consult with the bodies (if any) specified in relation to the body under
subsection 20(5).
109. Subsection 20(5) would allow the Minister to specify in the legislative instrument under
subsection (20(1) bodies in relation to a nominated industry representative body for the
purposes of subsection 20(4).
Nominated polling bodies
110. Subsection 20(6) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated polling body and specify one or more
charges in relation to that specified body.
111. Subsection 20(7) would provide that, if the Minister does so, before regulations are
made setting or amending a rate of charge the following consultation must occur:
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 20(8)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 20(7)(a)); or
44
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 20(8)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 20(7)(b)).
112. Subsection 20(8) would provide that the Minister may in the instrument under
subsection 20(6):
a. specify the whole of the rate of a charge in relation to a body for the purposes of
paragraph 20(7)(a) (paragraph 20(8)(a)); or
b. specify a part or parts of a rate of a charge in relation to a body for the purposes of
paragraph 20(7)(b) (paragraph 20(8)(b)).
113. Subsection 20(9) would provide that before making a recommendation about the whole
of the rate or a specified part or parts of the rate, a nominated polling body must ensure a
poll is conducted in accordance with the requirements for, or in relation to, the conduct
of a poll that are specified under subsection 20(10). The subsection would further require
that any recommendation made by the nominated polling body must be in accordance
with the results of the poll.
114. Subsection 20(10) would allow the Minister to specify in the legislative instrument
under subsection 20(6) requirements that are for, or in relation to, the conduct of a poll
for the purposes of subsection 20(9).
Section 21 Treatment of partnerships
115. This section would provide for the Act and the regulations to apply to a partnership as if
it were a person, but with the changes set out in the section. This is to ensure that these
types of legal entities are captured as charge payers within the agricultural levy system.
This would reflect the reality that many agricultural businesses are partnerships. Where
the Act and regulations refer to 'a person' this would include a partnership, subject to the
remaining provisions of the section.
116. Subsection 21(2) would provide that an obligation that would otherwise be imposed on
the partnership is imposed on each partner, but may be discharged by any of the
partners. For example, where the regulations name a person liable to pay charge, this
makes the partnership liable to pay charge, but any member of the partnership may pay
charge to discharge the liability for the partnership as a whole.
117. Subsection 21(3) would provide that if the Act or regulations would permit something to
be done by the partnership, the thing may be done by one or more members of the
partnership on behalf of the partnership.
118. Subsection 21(4) would provide that a change in the composition of a partnership would
not affect the continuity of the partnership for the purposes of the Act and the
regulations made under the Act. Therefore, a partnership may continue to be liable to
pay charge even if the members of the partnership change during the relevant period.
Section 22 Treatment of trusts
119. This section would provide for the Act and the regulations to apply to a trust as if it were
a person, but with the changes set out in the section. This is to ensure that these types of
legal entities are captured as charge payers within the agricultural levy system. This
45
would reflect the reality that many agricultural businesses are trusts. Where the Act and
regulations refer to 'a person' this would include a trust, subject to the remaining
provisions of the section.
Trusts with a single trustee
120. Subsection 22(2) would provide that if the trust has a single trustee:
a. an obligation that would otherwise be imposed on the trust is imposed on the
trustee instead; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by the trustee.
Trusts with multiple trustees
121. Subsection 22(3) would provide that if the trust has two or more trustees:
a. an obligation that would otherwise be imposed on the trust by the Act or
regulations would be imposed on each trustee instead, but may be discharged by
any of the trustees; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by one or more trustees on behalf of the trust.
122. For example, where the regulations name a person liable to pay charge, this makes the
trust liable to pay charge, but any trustee may pay charge to discharge the liability for
the trust as a whole.
Section 23 Treatment of unincorporated bodies or associations
123. This section would provide for the Act and the regulations to apply to an unincorporated
body or association as if it were a person, but with the changes set out in the section.
This is to ensure that these types of legal entities are captured as charge payers within
the agricultural levy system. Where the Act and regulations refer to 'a person' this
would include an unincorporated body or association, subject to the remaining
provisions of the section.
124. Subsection 23(2) would provide that an obligation that would be imposed on the
unincorporated body or association is imposed on each member of the unincorporated
body's or association's management committee, but may be discharged by any of the
committee members. For example, where the regulations name a person liable to pay
charge, this makes the unincorporated body or association liable to pay charge, but any
member of the management committee may pay charge to discharge the liability for the
unincorporated body or association as a whole.
125. Subsection 23(3) would provide that if the Act or regulations would permit something to
be done by the unincorporated body or association, the thing may be done by one or
more members of the unincorporated body's or association's management committee on
behalf of the body or association.
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Section 24 Making of regulations
126. This section would enable the Governor-General to make regulations under the Act. The
regulations may prescribe matters required or permitted by the Act to be prescribed by
the regulations. The regulations may also prescribe matters necessary or convenient to
be prescribed for carrying out or giving effect to the Act.
127. The Act would establish a framework that enables charges to be imposed in relation to
different products and goods. As the settings for each charge are different, it is necessary
and appropriate for that detail to be included in the regulations rather than the Act. For
example, charge settings for the export of honey, such as how it is imposed, the rate of
the charge and any exemptions, are different from the charge settings for melons, which
are also different from the charge settings for wool and so on.
128. By enabling all charge imposition settings to be located together in the regulations,
rather than split between the Act and the regulations, the proposed Act would increase
accessibility, flexibility and fairness for industry in understanding and seeking to adjust
their charge settings.
129. There would be several provisions of the Act that enable matters to be prescribed by the
regulations and which would trigger the regulation making power which would be set
out in section 24.
130. As the regulations would be legislative instruments, the Legislation Act would apply to
the regulations and govern such matters as registration, Parliamentary oversight
(disallowance) and sunsetting.
Consultation--setting or amending the rate of a charge
131. Subsection 24(2) would provide for consultation, which must occur before regulations
are made setting or amending the rate of a charge. The consultation requirements
account for three different scenarios:
a. if one or more nominated industry representative bodies must be consulted in
accordance with section 20;
b. if a nominated polling body must be consulted in accordance with section 20; or
c. if neither a nominated industry representative body nor a nominated polling body
must be consulted, in which case, appropriate consultation must be undertaken with
bodies and persons involved in the industry in relation to the charge.
132. Paragraphs 24(2)(a) and (b) would provide that if one or more nominated industry
representative bodies or a nominated polling body must be consulted, the Minister must
be satisfied of two things. Firstly, that the consultation has occurred. Secondly, that if
such a nominated industry representative body or nominated polling body makes a
recommendation to the Minister about the rate, the rate in the proposed regulations does
not exceed the rate so recommended by the nominated body.
133. Paragraph 24(2)(c) would provide that if neither a nominated industry representative
body nor a nominated polling body must be consulted about the proposed regulations,
the Minister must be satisfied of two things. Firstly, that appropriate consultation has
been undertaken with bodies and persons involved in the industry in relation to the
47
charge. Secondly, that any recommendations made by those bodies or persons about the
rate have been considered.
134. A note to subsection 24(2) would refer the reader to section 17 (consultation) of the
Legislation Act for consultation requirements generally. Section 17 of the Legislation
Act provides that before a legislative instrument is made, the rule-maker must be
satisfied that there has been undertaken any consultation that is considered by the rule-
maker to be appropriate, and reasonably practicable to undertake.
135. The requirements for consultation and industry recommendations are intended to prevent
the setting or amending of rates of charge above those recommended by industry where
there is a nominated industry representative body or a nominated polling body specified
in relation to the charge.
136. The consultation arrangements set out in this section and section 20 would make charge
consultation roles clearer, more consistent and easier to find and understand. It is
intended that these provisions would operate as follows:
a. If there was a single industry representative body nominated in relation to a charge
rate, and that body made a recommendation about the setting or amending of the
rate, then the rate could not be set higher than that recommendation.
b. If there were multiple industry representative bodies nominated in relation to a
charge rate, and each of those bodies made recommendations about the setting or
amending of the rate, then the rate could not be set higher than those
recommendations (the lowest recommendation being the effective
recommendation). For example, if one body recommended a 2% increase to the
charge and another body recommended only a 1% increase to the charge, then the
rate could not be increased by more than 1%.
c. There is no requirement to give a recommendation. The failure of one or more
nominated industry representative bodies to make a recommendation about the
setting or amending of the rate, would not invalidate the recommendations of any
other nominated industry representative bodies.
d. The Minister would not be bound to make a regulation setting or amending the rate
of a charge in any case, including if nominated industry representative bodies have
not made uniform recommendations or have failed to make recommendations.
137. This section and section 20 would operate to enable a 'levy' poll to be established in
relation to charges. This would be consistent with equivalent provisions in section 23
and 27 of the proposed Primary Industries (Excise) Levies Act, which were included to
enable existing dairy and wool levy poll arrangements to be maintained, as well as
enabling other industries to establish a levy poll. These provisions would not mandate
the establishment of polls for a customs charge.
138. Where a nominated polling body is named in relation to a charge, before regulations
could be made setting or amending the rate of the charge:
a. the nominated polling body must ensure a poll is conducted in accordance with the
requirements specified under subsection 20(10), that are for, or in relation to, the
conduct of the poll;
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b. the nominated polling body must be consulted and may make recommendations to
the Minister about the rate. The recommendation must be in accordance with the
results of the poll; and
c. if the nominated polling body makes a recommendation about the rate, the rate
must not be set higher than the rate so recommended.
139. In addition to new industries, a small number of established industries may have neither
a nominated industry representative body nor a nominated polling body. In the cases
where there is neither, before making regulations setting or amending the rate of the
charge:
a. appropriate consultation would need to be undertaken about the proposed change
with bodies and persons involved in the industry in relation to the charge (such as
proposed charge payers, collection agents, industry groups or other relevant persons
or bodies); and
b. any recommendations made by those bodies or persons about the rate would have
to be considered.
140. Consultation with industry about charge rates is an important feature of the agricultural
levy system and would remain so under the modernised legislative framework.
Consistent with current practice, it is expected that a charge rate would only rarely, if
ever, be set or amended without clear evidence that this was supported by the majority of
charge payers. That evidence is typically provided to government through a levy
proposal prepared in accordance with the government's Levy Guidelines: How to
establish or amend agricultural levies. Updated guidelines would be released prior to
commencement of the proposed Act, and published on the department's website.
141. Subsection 24(3) would provide that the regulations would be valid and enforceable if
the consultation as described in subsection 24(2) does not occur for whatever reason.
This provision would operate as a safeguard in case of procedural errors.
Other instruments
142. Subsection 24(4) would provide that the regulations made under the Act may make
provision in relation to a matter by conferring on the Minister or the Secretary a power
to make a legislative instrument.
143. It is considered appropriate to enable the regulations to confer a power to make
legislative instruments on the Minister or the Secretary to allow for flexibility, and to
facilitate ease of implementing arrangements tailored to suit industry needs.
Incorporation of other instruments
144. Subsection 24(5) would provide that, despite subsection 14(2) of the Legislation Act, the
regulations may make provision in relation to a matter by applying, adopting or
incorporating, with or without modification, any matter contained in an instrument or
other writing as in force or existing from time to time.
145. Subsection 14(2) of the Legislation Act provides that, unless the contrary intention
appears, a legislative instrument may not make provision in relation to a matter by
49
applying, adopting, or incorporating any matter contained in an instrument or other
writing as in force or existing from time to time.
146. Subsection 24(5) would therefore provide a contrary intention to subsection 14(2) of the
Legislation Act. That is, the incorporation of certain documents by reference would not
be limited to the instrument or other writing as at the date of incorporation.
147. It is considered appropriate to enable the incorporation of documents as they exist from
time to time because the documents that would be referred to would, in general, be
technical reference materials or production standards that are updated as required.
148. It is intended that where the regulations would incorporate such documents, they would
either be freely and publicly available, or they would be documents required in the
ordinary course of doing business in the particular industry. For example, the tea tree oil
charge is imposed with reference to the ISO standard for tea tree oil production. In
Australia, industry practice requires tea tree oil to conform to this standard, so access to
the standard is already an industry requirement.
149. In order to comply with paragraph 15J(2)(c) of the Legislation Act, the explanatory
statements for the regulations would contain a description of the relevant incorporated
material and indicate how it may be obtained.
No limit on subsection (1)
150. Subsection 24(6) would clarify that subsections 24(4) and (5) do not limit
subsection 24(1), which enables the Governor-General to make regulations under the
Act.
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PRIMARY INDUSTRIES (SERVICES) LEVIES BILL 2023
NOTES ON CLAUSES
Part 1--Preliminary
Section 1 Short title
1. This section would provide for the short title of the proposed Act to be the Primary
Industries (Services) Levies Act 2023 (the Act).
Section 2 Commencement
2. This section would provide for the commencement of each provision of the proposed Act,
as set out in the table in subsection 2(1).
3. Item 1 in the table would provide that the whole of the proposed Act will commence on
1 January 2025.
4. A note to subsection 2(1) would state that the table relates only to the provisions of the
proposed Act as originally enacted and it will not be amended to deal with any later
amendments of the proposed Act.
5. Subsection 2(2) would provide that any information in column 3 of the table is not part of
the proposed Act. Information may be inserted in column 3 of the table, or information in
it may be edited, in any published version of the proposed Act. This would allow
information to be inserted in column 3 to assist the reader after commencement.
Section 3 Simplified outline of this Act
6. This section would set out a simplified outline of the proposed Act. The simplified outline
would provide that the proposed Act authorises the regulation to impose a levy on the
provision of a specified service that facilitates the production of a specified product that is
produce of a primary industry. In particular, the service must involve the use or
application of a product that is produce of a primary industry, and must be provided on a
commercial basis.
7. In addition to imposing a particular levy, the regulations would also set out:
a. any exemptions from the levy; and
b. the rate of the levy; and
c. the person who is liable to pay the levy (the levy payer).
8. The simplified outline is included to assist the reader to understand the substantive
provisions of the proposed Act; however, it is not intended to be comprehensive. The
reader should rely on the substantive provisions of the proposed Act to which the outline
relates.
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Section 4 Definitions
9. This section would provide the definitions used in the proposed Act.
10. Many of the key definitions used in the proposed Act are replicated in equivalent
provisions of the proposed Primary Industries (Excise) Levies Act and the proposed
Primary Industries (Customs) Charges Act.
11. For information on the following terms, refer to the explanation provided for section 4
(definitions) of the proposed Primary Industries (Excise) Levies Act: algae, algal product,
animal, animal product, aquaculture, fishing, forest operations, fungus, fungus
product, plant, plant product, produce of a primary industry, and product.
12. An explanation is provided below for key definitions used only in the proposed Act.
levy
13. This definition would provide that levy means a levy imposed by regulations made for the
purposes of Part 2 of the proposed Act.
14. This definition would also apply, for example, in Part 3 (Rate of levy), Part 4 (Levy
payer) and part 5 (Other matters) so that a reference to "levy" includes a levy imposed by
regulations made for the purposes of Part 2 of the proposed Act.
Section 5 Crown to be bound
15. This section would provide that the proposed Act would bind the Crown in right of each
of the States, of the Australian Capital Territory and of the Northern Territory. However,
it would not bind the Crown in right of the Commonwealth.
Section 6 Application of this Act in external Territories
16. This section would provide that the proposed Act and the regulations made under the
proposed Act do not automatically extend to the external Territories.
17. Subsection 6(2) would provide that the regulations made under the proposed Act may
extend the proposed Act, and any provisions of the regulations, to an external Territory
that is prescribed by the regulations. This would enable the regulations to extend the
proposed Act and any provisions of the regulations to external Territories on a case-by-
case basis.
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Part 2--Levy on the provision of services that facilitate
production of products that are produce of a primary
industry
Overview
18. Part 2 would authorise the regulations made under the Act to impose levies on the
provision of services that facilitate production of products that are produce of a primary
industry. Product and produce of a primary industry are, in turn, defined in section 4.
19. The part would also authorise the regulations made under the Act to impose two or more
levies, and to provide for exemptions from a levy under the part.
Section 7 Imposition of levy
20. This section would provide that the regulations made under the Act may impose a levy on
the provision of a specified service that facilitates the production of a specified product
that is produce of a primary industry.
21. A note to subsection 7(1) would explain that a service may be specified by name, by
inclusion in a specified class, or in any other way.
22. Subsection 7(2) would provide that any regulations made for the purposes of subsection
7(1) must require the service to be one that involves the use or application of a specified
product that is produce of a primary industry, and that is provided on a commercial basis.
23. The policy intention is for the scope of imposition power in Part 2 of the proposed Act to
be similar to that of the PIEL and PICC Acts, which at a high level, limit the imposition of
levies and charges to animal and plant products that are produce of primary industry.
24. This is to ensure that services levies could only be imposed on services of a kind that were
relevant to the agricultural levy system, and not say, accounting, agronomy or other kinds
of services that might be provided to primary producers. This is why the imposition power
in Part 2 of the proposed Act is based around a service that facilitates the production of a
product that is produce of a primary industry. This also links the scope of the proposed
Act to that of Parts 2 of the proposed Primary Industries (Excise) Levies Act and the
proposed Primary Industries (Customs) Charges Act, which deal with the imposition of
levies and charges on products that are produce of a primary industry.
25. As with those two proposed Acts, the following key definitions (defined in section 4 of
the Act) relate to understanding the intended scope of the imposition power for levies
imposed under Part 2 of the proposed Act: produce of a primary industry, product, algae,
algal product, animal, animal product, plant, plant product, fungus and fungus
product.
26. For further discussion of these terms, refer to the explanation provided for section 7 of the
proposed Primary Industries (Excise) Levies Act.
27. The other policy intention is to provide a framework whereby a levy could be imposed on
bee pollination services, fulfilling a long-standing request from the bee industry. This
would enable the bee industry to raise levy funds from a significant part of its industry,
53
that would not fall within the scope of the proposed Primary Industries (Excise) Levies
Act or the proposed Primary Industries (Customs) Charges Act because they only allow
for the imposition of duties of excise and duties of customs respectively. Such a levy
would be designed through consultation with industry, but as an example, under the
proposed Act a levy could be imposed on a bee pollination service provided by a
beekeeper on a commercial basis. This service could involve bees, being produce of a
primary industry, being used in an orchard to pollinate a fruit, thereby facilitating the
production of that fruit, itself being produce of a primary industry.
Minister to be satisfied of matters
28. Subsection 7(3) would provide that, before the Governor-General makes regulations for
the purposes of subsection 7(1), the Minister must be satisfied that the imposition of the
levy will result in expenditure on one or more of the following:
a. the marketing, advertising or promotion of products of one or more primary
industries (paragraph 7(3)(a));
b. research and development activities for the benefit of one or more primary
industries (paragraph 7(3)(b));
c. activities, including biosecurity activities, relating to the promotion or maintenance
of the health of plants, animals, fungi or algae (paragraph 7(3)(c));
d. matters relating to a biosecurity response (paragraph 7(3)(d));
e. activities relating to the National Residue Survey (paragraph 7(3)(e));
f. any other activity prescribed by the regulations in relation to one or more primary
industries, and for the benefit of one or more primary industries (paragraph 7(3)(f)).
29. The intended purpose of subsection 7(3) would be to require that a levy under Part 2 is
only imposed if the Minister is satisfied it will result in expenditure aligned with the
purposes of the levy system.
30. Paragraphs 7(3)(a)-(e) would reflect the five broad purposes for which agricultural levies
and charges were established under the Levy and Charge Acts, and which, for
consistency, are also necessary to enable for services levies.
31. Paragraph 7(3)(c) would allow for the continuation of levies colloquially referred to as
AHA) and PHA levies. The regulations made under the proposed Act would refer to these
as the 'biosecurity activity' component of a levy.
32. Paragraph 7(3)(d) would allow for the continuation of levies colloquially referred to as
EADR levies and EPPR levies. These levies are imposed primarily to fund industry
contributions to the costs of a response to a pest or disease incursion under a biosecurity
response deed such as the Emergency Animal Disease Response Agreement and the
Emergency Plant Pest Response Deed, including repayment over time where the
government has underwritten the industry's contribution in the first instance (as permitted
by the deed arrangements). The regulations made under the proposed Act would refer to
these as the 'biosecurity response' component of a levy.
54
33. Paragraphs 7(3)(c) and 7(3)(d) are intended to cover the levy funded operations currently
undertaken by AHA and PHA. They are also intended to be broad enough to cover future
developments in animal and plant health, such as industry and government jointly
agreeing a new emergency response deed.
34. Paragraph 7(3)(f) is intended to provide some flexibility in case, in the future, industry
and government agree to extend the agricultural levy system to include expenditure for an
additional purpose. Such expenditure would need to be for the benefit of one or more
primary industries.
Duty neither a duty of customs nor a duty of excise
35. Subsection 7(4) would clarify that section 7 authorises the imposition of a levy only so far
as the levy is neither a duty of customs nor a duty of excise within the meaning of section
55 of the Constitution.
36. Pursuant to section 55 of the Constitution, laws imposing duties of customs must only
deal with duties of customs, and laws imposing duties of excise must only deal with duties
of excise. Therefore, section 7 would authorise the imposition of taxes within the meaning
of section 55 of the Constitution, and would not authorise, for example, the imposition of
duties of customs or of excise.
Section 8 Imposition of 2 or more levies
37. This section would clarify that Part 2 of the Act does not prevent the imposition of two or
more levies, whether the levies are imposed in relation to the same service or in relation to
different services. This would have the effect that the regulations may impose two or more
levies.
38. Under section 7 of the Act, it is possible for different levies, with different rates, different
levy payers and different purposes, to be imposed, including on the same service. It is
necessary to enable the imposition of two or more levies on the same service so that levy
can be payable by all industry members. This would be consistent with equivalent
provisions in the proposed Primary Industries (Excise) Levies Act and the proposed
Primary Industries (Customs) Charges Act.
Section 9 Exemptions from levy
39. This section would authorise the regulations made under the Act to provide for
exemptions from a levy imposed under Part 2. The effect of this section would be to allow
the regulations to provide for the circumstances under which levy would not be imposed
on a service that facilitates the production of a specified product that is produce of a
primary industry.
40. Enabling the regulations to set out, as exemptions, the circumstances under which levy
would not be imposed is appropriate as it would provide the flexibility to design levies
that work for each industry, including through the use of exemptions. Exemptions are also
used to ensure levies are equitable and cost effective.
41. This would also be consistent with equivalent provisions in the proposed Primary
Industries (Excise) Levies Act and the proposed Primary Industries (Customs) Charges
Act.
55
42. Section 9 of the Act would allow for similar arrangements to be made for levies imposed
on services.
56
Part 3--Rate of levy
Overview
43. Part 3 would provide for matters relating to the rate of levy, components of levy,
flexibility in relation to rates of levy and nil or zero rates.
Section 10 Rate of levy
44. This section would provide that the rate of a levy imposed under Part 2 is worked out in
accordance with the regulations made under the Act. Section 10 operates in conjunction
with section 21, which provides for the making of regulations. The regulations would
prescribe the rate of a levy comprised of either a single levy component or the sum of levy
components.
45. This section does not provide a maximum levy rate. This approach is consistent with
recommendations made by the Productivity Commission in its report Rural Research and
Development Corporations (2011) that maximum levy rates should be abolished from the
agricultural levies legislation. Consultation with industry stakeholders has shown they are
largely supportive of removing maximum rates from the legislation.
Section 11 Components of levy
46. This section would provide that the rate of a levy imposed under Part 2 may be expressed
to be equal to a single component prescribed by the regulations made under the Act, or the
sum of such components as are prescribed by the regulations.
47. The regulations made under the Act would clearly label each component with its
corresponding purpose. For example, 'research and development component', 'marketing
component' and so on.
48. Under the Levy and Charge Acts different kinds of levy are imposed in relation to the
same products allowing for expenditure on one or more of the existing purposes of the
levy system.
49. This provision would enable one levy to be imposed and for the rate of the levy to be
comprised of different components. This allows the flexibility for one levy to result in
expenditure across any or all of the purposes of the agricultural levy system. For example,
a services levy could be imposed to fund expenditure on research and development, and
residue testing, whereas another services levy could be imposed to fund expenditure on
marketing and biosecurity activities.
50. Subsection 11(2) would clarify that subsection 11(1) does not limit the operation of
section 10, which provides that the rate of a levy imposed under Part 2 is worked out in
accordance with the regulations made under the Act.
Section 12 Flexibility in relation to rates of levy
51. This section would provide that different rates of the same levy imposed under Part 2 may
be prescribed by the regulations made under the Act for different kinds of services.
57
52. This would allow different levy rates to be set to meet the specific needs of individual
industries. For example, an industry with high research and development needs may
choose to set a higher rate for a research and development component than an industry
with low research and development needs.
53. This would also allow different levy rates to be set to meet the specific needs within
individual industries. For example, many excise levies in the Levy Acts have different
rates for produce sold for processing, compared to the same produce sold for any other
purpose. This provision would enable the same flexibility for services levy rates to be
prescribed in an equivalent way. These rates would reflect what industry proposes to
government as being suitable for its needs and helps ensure that levies fairly apply to
different types of transactions.
54. Subsection 12(2) would clarify that subsection 12(1) does not limit the operation of
section 10, which provides that the rate of a levy imposed under Part 2 is worked out in
accordance with the regulations made under the Act.
55. Subsection 12(3) would clarify that subsection 12(1) does not limit the operation of
subsection 33(3A) of the Acts Interpretation Act, which relates to the scope of powers
where an Act confers a power to make, among other instruments, regulations, with respect
to particular matters.
Section 13 Nil or zero rates
56. This section would provide that the rate of a levy imposed under Part 2, or a component of
the rate of a levy, may be expressed to be nil, zero, $0 or 0 cents per unit of measure, or
0% of the sale price of a service.
57. This would allow for a levy to be imposed with a rate set to nil or zero if required. There
are several reasons why a levy rate might be set to nil, most commonly this occurs with
biosecurity response levies, but a nil rate can be set for any levy imposed under Part 2.
58. Biosecurity response levies are often first imposed with a nil rate. This allows for a quick
activation of the levy, by setting a positive rate, in the event of a relevant biosecurity
response. This provides certainty for the industry and the Commonwealth that a payment
(including repayment) mechanism is in place if required.
59. Other reasons for setting a levy rate to nil can include the cost of collection exceeding the
revenue raised from the levy, or a change to the purpose for which the levy has been
imposed. For example, industries sometimes seek to have the balance of their levy
components adjusted in response to changing priorities, without increasing the total
amount of levy they are paying. One way of achieving this is for one component of the
levy (such as marketing) to be reduced to nil, while increasing another component (such
as research and development) by the same amount to serve the higher priority. Such
arrangements can either be temporary or permanent.
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Part 4--Levy payer
Overview
60. Part 4 would provide for the levy payer.
Section 14 Levy payer
61. This section would provide that a levy imposed under Part 2 is payable by the person
worked out in accordance with the regulations made under the Act.
62. Naming the levy payer for each levy in the regulations provides the necessary flexibility
to prescribe this person on a case-by-case basis. For example, the levy payer could be the
person who provided the service, the person who received the service or another relevant
person in the industry. This flexibility is a crucial part of the levy system.
59
Part 5--Other matters
Overview
63. Part 5 would provide for other matters, including:
• that the Act would not impose levy on State property
• the exclusion of net GST from the price of a service or amount paid for a service
• nominated industry representative bodies and nominated polling bodies
• the treatment of partnerships, trusts and unincorporated bodies or associations
• the making of regulations under the Act.
Section 15 Act does not impose levy on property of a State
64. This section would clarify that the Act does not authorise the imposition of a tax on
property of any kind belonging to a State.
65. Subsection 15(2) would provide that property of any kind belonging to a State has the
same meaning as in section 114 of the Constitution. Section 114 of the Constitution
provides that the Commonwealth may not impose any tax on property of any kind
belonging to a State.
66. Subsection 15(3) would provide an assumption for the purposes of section 15, namely,
that a reference in section 114 of the Constitution to a State includes a reference to the
Australian Capital Territory and the Northern Territory.
Section 16 Net GST not included in price of service or amount paid for service
67. This section would provide a contrary intention to section 177-12 of the GST Act.
Subsection 177-12(1) of the GST Act provides that, in any Act, unless the contrary
intention appears, a reference to a price relating to a supply, or a proposed supply, is taken
to include the net GST (if any) that is, or would be, payable by an entity making the
supply.
68. The intention of this provision is to ensure levy is not paid on amounts of GST. For
example, if the sale price of a product was $4.40 including GST, the levy would be
calculated on a sale price of $4.00 as the GST exclusive value.
Section 17 Nominated industry representative bodies and nominated polling bodies
69. This section would provide that the Minister may, by legislative instrument, determine a
specified body to be a nominated industry representative body or a nominated polling
body, respectively, and specify one or more levies in relation to that body.
70. This would also be consistent with equivalent provisions in the proposed Primary
Industries (Excise) Levies Act and the proposed Primary Industries (Customs) Charges
Act, which provide for streamlined arrangements for declaring industry representative
bodies and make uniform the varied titles used for industry representative body functions
under the Levy and Charge Acts. For further discussion of these matters, refer to the
60
explanation provided for section 23 of the proposed Primary Industries (Excise) Levies
Act.
71. This section would enable levy poll arrangements to be established in relation to services
levies, in an equivalent manner to excise levies and customs charges.
72. 'Nominated polling body' would be a new term to describe bodies that would conduct
polls with industry in relation to levy settings. Nominated polling bodies offer a distinct
consultation and voting mechanism for those industries that choose to use polls.
73. Nominated industry representative bodies and nominated polling bodies provide two
different mechanisms for industry consultation about setting or amending the rate of a
levy. The policy intention is that where a nominated industry representative body is
required to be consulted about the whole of the rate or a part of the rate of a particular
levy, a nominated polling body would not be required to be consulted. This is intended to
be achieved by there only ever being either a nominated industry representative body, or a
nominated polling body for any part of the rate (either the whole of the rate or a part of the
rate), never both. This would be managed administratively and would be a continuation of
current practice.
74. This section would enable all industry representative bodies and polling bodies named in
relation to services levies to be nominated in a single legislative instrument. The use of a
legislative instrument would allow for updates to more easily be made as names change,
bodies merge or new bodies are established.
75. This section would also provide that, if the Minister determines a body to be a nominated
industry representative body or polling body, the body must be consulted, and may make
recommendations to the Minister about either the whole of the rate or the specified part or
parts of the rate, before regulations are made setting or amending the rate of a levy.
76. The requirement to consult with these bodies so declared before making regulations
setting or amending levy rates, regardless of the title given to those bodies in the
legislation, is a longstanding and foundational element of the agricultural levy system.
77. The requirements for consultation and industry recommendations are intended to prevent
the implementation of rates of levy above those recommended by industry.
78. This section would provide for consistent representative and consultation arrangements
across levied industries and clarify the roles and obligations for all participants. This
would also address industry feedback that they have previously found it hard to identify
their legislated role.
Nominated industry representative bodies
79. Subsection 17(1) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated industry representative body and specify
one or more levies in relation to that specified body.
80. Subsection 17(2) would provide that, if the Minister does so, before regulations are made
setting or amending a rate of levy the following consultation must occur:
61
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 17(3)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 17(2)(a)); or
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 17(3)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 17(2)(b)).
81. Subsection 17(3) would provide that the Minister may in the instrument made under
subsection 17(1):
a. specify the whole of the rate of a levy in relation to a body for the purposes of
paragraph 17(2)(a) (paragraph 17(3)(a)); or
b. specify a part or parts of the rate of a levy in relation to a body for the purposes of
paragraph 17(2)(b) (paragraph 17(3)(b)).
82. Subsection 17(4) would provide that before making a recommendation about the whole of
the rate or a specified part or parts of the rate, a nominated industry representative body
must consult with the bodies (if any) specified in relation to the body under subsection
17(5).
83. Subsection 17(5) would allow the Minister to specify in the legislative instrument under
subsection 17(1) bodies in relation to a nominated industry representative body for the
purposes of subsection 17(4).
Nominated polling bodies
84. Subsection 17(6) would provide that the Minister may, by legislative instrument,
determine a specified body to be a nominated polling body and specify one or more levies
in relation to that specified body.
85. Subsection 17(7) would provide that, if the Minister does so, before regulations are made
setting or amending of a rate of levy the following consultation must occur:
a. if the whole of the rate is specified in relation to the body in accordance with
paragraph 17(8)(a)--the body must be consulted, and may make recommendations
to the Minister, about the whole of the rate (paragraph 17(7)(a)); or
b. if a part or parts of the rate are specified in relation to the body in accordance with
paragraph 17(8)(b)--the body must be consulted, and may make recommendations
to the Minister, about that part or parts of the rate (paragraph 17(7)(b)).
86. Subsection 17(8) would provide that the Minister may in the instrument under subsection
17(6):
a. specify the whole of the rate of a levy in relation to a body for the purposes of
paragraph 17(7)(a) (paragraph 17(8)(a)); or
b. specify a part or parts of a rate of a levy in relation to a body for the purposes of
paragraph 17(7)(b) (paragraph 17(8)(b)).
87. Subsection 17(9) would provide that before making a recommendation about the whole of
the rate or a specified part or parts of the rate, a nominated polling body must ensure a
poll is conducted in accordance with the requirements for, or in relation to, the conduct of
62
a poll that are specified under subsection 17(10). The subsection would further require
that any recommendation made by the nominated polling body must be in accordance
with the results of the poll.
88. Subsection 17(10) would allow the Minister to specify in the legislative instrument under
subsection 17(6) requirements that are for, or in relation to, the conduct of a poll for the
purposes of subsection 17(9).
Section 18 Treatment of partnerships
89. This section would provide for the Act and the regulations to apply to a partnership as if it
were a person, but with the changes set out in the section. This is to ensure that these types
of legal entities are captured as levy payers within the agricultural levy system. This
would reflect the reality that many agricultural businesses are partnerships. Where the Act
and regulations refer to 'a person' this would include a partnership, subject to the
remaining provisions of the section.
90. Subsection 18(2) would provide that an obligation that would otherwise be imposed on
the partnership is imposed on each partner, but may be discharged by any of the partners.
For example, where the regulations name a person liable to pay levy, this makes the
partnership liable to pay levy but any member of the partnership may pay levy to
discharge the liability for the partnership as a whole.
91. Subsection 18(3) would provide that if the Act or regulations would permit something to
be done by the partnership, the thing may be done by one or more members of the
partnership on behalf of the partnership.
92. Subsection 18(4) would provide that a change in the composition of a partnership would
not affect the continuity of the partnership for the purposes of the Act and the regulations
made under the Act. Therefore, a partnership may continue to be liable to pay levy even if
the members of the partnership change during the relevant period.
Section 19 Treatment of trusts
93. This section would provide for the Act and the regulations to apply to a trust as if it were a
person, but with the changes set out in the section. This is to ensure that these types of
legal entities are captured as levy payers within the agricultural levy system. This would
reflect the reality that many agricultural businesses are trusts. Where the Act and
regulations refer to 'a person' this would include a trust, subject to the remaining
provisions of the section.
Trusts with a single trustee
94. Subsection 19(2) would provide that if the trust has a single trustee:
a. an obligation that would otherwise be imposed on the trust is imposed on the
trustee instead; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by the trustee.
63
Trusts with multiple trustees
95. Subsection 19(3) would provide that if the trust has two or more trustees:
a. an obligation that would otherwise be imposed on the trust by the Act or
regulations would be imposed on each trustee instead, but may be discharged by
any of the trustees; and
b. if the Act or regulations would otherwise permit something to be done by the trust,
the thing may be done by one or more trustees on behalf of the trust.
96. For example, where the regulations name a person liable to pay levy, this makes the trust
liable to pay levy but any trustee may pay levy to discharge the liability for the trust as a
whole.
Section 20 Treatment of unincorporated bodies or associations
97. This section would provide for the Act and the regulations to apply to an unincorporated
body or association as if it were a person, but with the changes set out in this section. This
is to ensure that these types of legal entities are captured as levy payers within the
agricultural levy system. Where the Act and regulations refer to 'a person' this would
include an unincorporated body or association, subject to the remaining provisions of the
section.
98. Subsection 20(2) would provide that an obligation that would be imposed on the
unincorporated body or association is imposed on each member of the unincorporated
body's or association's management committee, but may be discharged by any of the
committee members. For example, where the regulations name a person liable to pay levy,
this makes the unincorporated body or association liable to pay levy but any member of
the management committee may pay levy to discharge the liability for the body or
association as a whole.
99. Subsection 20(3) would provide that if the Act or regulations would permit something to
be done by the unincorporated body or association, the thing may be done by one or more
members of the unincorporated body's or association's management committee on behalf
of the body or association.
Section 21 Making of regulations
100. This section would enable the Governor-General to make regulations under the Act. The
regulations may prescribe matters required or permitted by the Act to be prescribed by
the regulations. The regulations could also prescribe matters necessary or convenient to
be prescribed for carrying out or giving effect to the Act.
101. The Act would establish a framework that enables levies to be imposed in relation to
different services. As the settings for each levy would be different, it is necessary and
appropriate for that detail to be included in the regulations rather than the Act. For
example, levy settings for bee pollination, such as how it was imposed, the rate of the
levy and any exemptions, would be different from levy settings for reproductive
services.
102. By enabling all levy imposition settings to be located together in the regulations, rather
than split between the Act and the regulations, the proposed Act would increase
64
accessibility, flexibility and fairness for industry in understanding and seeking to adjust
their levy settings.
103. There would be several provisions of the Act that enable matters to be prescribed by the
regulations and which would trigger the regulation making power set out in section 21.
104. As the regulations would be legislative instruments, the Legislation Act would apply to
the regulations and govern such matters as registration, Parliamentary oversight
(disallowance) and sunsetting.
Consultation--setting or amending the rate of a levy
105. Subsection 21(2) would provide for consultation which must occur before regulations
are made setting or amending the rate of a levy. The consultation requirements account
for three different scenarios:
a. if one or more nominated industry representative bodies must be consulted in
accordance with section 17;
b. if a nominated polling body must be consulted in accordance with section 17; or
c. if neither a nominated industry representative body nor a nominated polling body
must be consulted, in which case, appropriate consultation must be undertaken with
bodies and persons involved in the industry in relation to the levy.
106. Paragraphs 21(2)(a) and (b) would provide that if one or more nominated industry
representative bodies or a nominated polling body must be consulted, the Minister must
be satisfied of two things. Firstly, that the consultation has occurred. Secondly, that if
such a nominated industry representative body or a nominated polling body makes a
recommendation to the Minister about the rate, the rate in the proposed regulations does
not exceed the rate recommended by the nominated body.
107. Paragraph 21(2)(c) would provide that if neither a nominated industry representative
body nor a nominated polling body must be consulted about the proposed regulations,
the Minister must be satisfied of two things. Firstly, that appropriate consultation has
been undertaken with bodies and persons involved in the industry in relation to the levy.
Secondly, that any recommendations made by those bodies or persons about the rate
have been considered.
108. A note to subsection 21(2) would refer the reader to section 17 (consultation) of the
Legislation Act for consultation requirements generally. Section 17 of the Legislation
Act provides that before a legislative instrument is made, the rule-maker must be
satisfied that there has been undertaken any consultation that is considered by the rule-
maker to be appropriate, and reasonably practicable to undertake.
109. The requirements for consultation and industry recommendations are intended to prevent
the setting or amending of rates of levy above those recommended by industry where
there is a nominated industry representative body or a nominated polling body specified
in relation to the levy.
110. The consultation arrangements set out in this section and section 17 would make levy
consultation roles clearer, more consistent and easier to find and understand. It is
intended that these provisions would operate as follows:
65
a. If there was a single industry representative body nominated in relation to a levy
rate, and that body made a recommendation about the setting or amending of the
rate, then the rate could not be set higher than that recommendation.
b. If there were multiple industry representative bodies nominated in relation to a levy
rate, and each of those bodies made recommendations about the setting or
amending of the rate, then the rate could not be set higher than those
recommendations (the lowest recommendation being the effective
recommendation). For example, if one body recommended a 2% increase to the
levy and another body recommended only a 1% increase to the levy, then the rate
could not be increased by more than 1%.
c. There is no requirement to give a recommendation. The failure of one or more
nominated industry representative bodies to make a recommendation about the
setting or amending of the rate would not invalidate the recommendations of any
other nominated industry representative bodies.
d. The Minister would not be bound to make a regulation setting or amending the rate
of a levy in any case, including if nominated industry representative bodies have
not made uniform recommendations or have failed to make recommendations.
111. This section and section 17 would operate to enable a levy poll to be established in
relation to services levies. This would be consistent with equivalent provisions in
sections 23 and 27 of the proposed Primary Industries (Excise) Levies Act, which were
included to enable existing dairy and wool levy poll arrangements to be maintained, as
well as enabling other industries to establish a levy poll. These provisions would not
mandate the establishment of polls for a services levy.
112. Where a nominated polling body is named in relation to a levy, before regulations could
be made setting or amending the rate of the levy:
a. the nominated polling body must ensure a poll is conducted in accordance with the
requirements specified under subsection 17(10), that are for, or in relation to, the
conduct of the poll;
b. the nominated polling body must be consulted and may make recommendations to
the Minister about the rate. The recommendation must be in accordance with the
results of the poll; and
c. if the nominated polling body makes a recommendation about the rate, the rate
must not be set higher than the rate so recommended.
113. Where levies have neither a nominated industry representative body nor a poll, for
example new services levies, before making regulations setting or amending the rate of
the levy:
a. appropriate consultation would need to be undertaken about the proposed change
with bodies and persons involved in the industry in relation to the levy (such as
proposed levy payers, collection agents, industry groups or other relevant persons
or bodies); and
b. any recommendations made by those bodies or persons about the rate would have
to be considered.
66
114. Consultation with industry about levy rates is an important feature of the agricultural
levy system and would remain so under the modernised legislative framework.
Consistent with current practice, it is expected that a levy rate would only rarely, if ever,
be set or amended without clear evidence that this was supported by the majority of levy
payers. That evidence is typically provided to government through a levy proposal
prepared in accordance with the government's Levy Guidelines: How to establish or
amend agricultural levies. Updated guidelines would be released prior to
commencement of the proposed Act, and published on the department's website.
115. Subsection 21(3) would provide that the regulations would be valid and enforceable if
the consultation as described in subsection 21(2) does not occur for whatever reason.
This provision would operate as a safeguard in case of procedural errors.
Other instruments
116. Subsection 21(4) would provide that the regulations made under the Act may make
provision in relation to a matter by conferring on the Minister or the Secretary a power
to make a legislative instrument.
117. It is considered appropriate to enable the regulations to confer a power to make
legislative instruments on the Minister or the Secretary to allow for flexibility, and to
facilitate ease of implementing arrangements tailored to suit industry needs.
Incorporation of other instruments
118. Subsection 21(5) would provide that, despite subsection 14(2) of the Legislation Act, the
regulations may make provision in relation to a matter by applying, adopting or
incorporating, with or without modification, any matter contained in an instrument or
other writing as in force or existing from time to time.
119. Subsection 14(2) of the Legislation Act provides that, unless the contrary intention
appears, a legislative instrument may not make provision in relation to a matter by
applying, adopting or incorporating any matter contained in an instrument or other
writing as in force or existing from time to time.
120. Subsection 21(5) would therefore provide a contrary intention to subsection 14(2) of the
Legislation Act. That is, the incorporation of certain documents by reference would not
be limited to the instrument or other writing as at the date of incorporation.
121. It is considered appropriate to enable the incorporation of documents as they exist from
time to time because the documents that would be referred to would, in general, be
technical reference materials or production standards that are updated as required.
122. It is intended that where the regulations would incorporate such documents, they would
either be freely and publicly available, or they would be documents required in the
ordinary course of doing business in the particular industry. For example, the tea tree oil
excise levy and customs charge are imposed with reference to the ISO standard for tea
tree oil production. In Australia, industry practice requires tea tree oil to confirm to this
standard, so access to the standard is already an industry requirement. The proposed Act
would allow an equivalent approach to be taken for services levies.
67
123. In order to comply with paragraph 15J(2)(c) of the Legislation Act, the explanatory
statements for the regulations would contain a description of the relevant incorporated
material and indicate how it may be obtained.
No limit on subsection (1)
124. Subsection 21(6) would clarify that subsections 21(4) and (5) do not limit
subsection 21(1), which enables the Governor-General to make regulations under the
Act
68
Attachment A
Impact Analysis
Modernising the agricultural levies
legislation
Department of Agriculture, Fisheries and Forestry
Levies and Innovation Branch
Modernising the agricultural levies legislation
© Commonwealth of Australia 2023
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Unless otherwise noted, copyright (and any other intellectual property rights) in this publication is owned by the
Commonwealth of Australia (referred to as the Commonwealth).
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All material in this publication is licensed under a Creative Commons Attribution 4.0 International Licence except content
supplied by third parties, logos and the Commonwealth Coat of Arms.
Cataloguing data
This publication (and any material sourced from it) should be attributed as: DAFF 2023, Impact analysis - Modernising the
agricultural levies legislation, Department of Agriculture, Fisheries and Forestry, Canberra, July. CC BY 4.0.
Department of Agriculture, Fisheries and Forestry
GPO Box 858 Canberra ACT 2601
Telephone 1800 900 090
Web agriculture.gov.au
Disclaimer
The Australian Government acting through the Department of Agriculture, Fisheries and Forestry has exercised due care
and skill in preparing and compiling the information and data in this publication. Notwithstanding, the Department of
Agriculture, Fisheries and Forestry, its employees and advisers disclaim all liability, including liability for negligence and for
any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying on any of the
information or data in this publication to the maximum extent permitted by law.
Acknowledgement of Country
We acknowledge the Traditional Custodians of Australia and their continuing connection to land and sea, waters,
environment and community. We pay our respects to the Traditional Custodians of the lands we live and work on, their
culture, and their Elders past and present.
Department of Agriculture, Fisheries and Forestry
ii
Modernising the agricultural levies legislation
Contents
Summary ......................................................................................................................................v
Introduction and background ....................................................................................................... 1
Australian primary industries .......................................................................................................... 1
About this impact analysis ............................................................................................................... 6
1 The problem ......................................................................................................................... 7
1.1 Complexity ........................................................................................................................... 7
1.2 Inconsistencies .................................................................................................................... 8
1.3 Lack of flexibility .................................................................................................................. 8
1.4 Effects on stakeholders ....................................................................................................... 9
1.5 Available data .................................................................................................................... 10
2 Need for government intervention .......................................................................................11
2.1 The need for legislative change by government ............................................................... 11
2.2 Objectives of government intervention ............................................................................ 11
2.3 How success will be measured .......................................................................................... 11
3 Policy options considered .....................................................................................................13
3.1 Option considered but not progressed for analysis .......................................................... 13
3.2 Options for analysis in this impact analysis ....................................................................... 13
4 Potential impacts of options .................................................................................................16
4.1 Approach to estimating costs and benefits ....................................................................... 16
4.2 CBA results......................................................................................................................... 17
4.3 Small business and competition impacts .......................................................................... 20
5 Consultation undertaken ......................................................................................................22
6 Best option and how it will be implemented .........................................................................24
6.1 Best option ........................................................................................................................ 24
6.2 Implementation ................................................................................................................. 24
7 Evaluation of chosen option .................................................................................................26
Appendix A: Current levies legislation ..........................................................................................28
Appendix B: Cost-benefit analysis report......................................................................................29
References ..................................................................................................................................56
Department of Agriculture, Fisheries and Forestry
iii
Modernising the agricultural levies legislation
Tables
Table 1: Summary of costs to industry stakeholders ............................................................................ 18
Table 2: Regulatory Burden Estimates table ......................................................................................... 18
Table 3: Economy-wide break-even analysis (at an effectiveness rate of 1%) ..................................... 19
Table 4: Summary of benefits at break-even effectiveness rate (1%) .................................................. 20
Table 5: Preliminary evaluation plan ..................................................................................................... 26
Figures
Figure 1: Agriculture, fisheries and forestry value of production, by commodity, 2021-22 .................. 1
Figure 2: Key stakeholders involved in the agricultural levy system ...................................................... 4
Figure 3: Overview of processes of and flow of levies through the levy system .................................... 5
Figure 4: Proposed modernised levies legislative framework .............................................................. 14
Boxes
Box 1: Matching funding limits................................................................................................................ 8
Department of Agriculture, Fisheries and Forestry
iv
Modernising the agricultural levies legislation
Summary
The current agricultural levies legislation has been in place since 1989 and has grown over time.
There are more than 50 pieces of legislation governing over 110 levies across over 75 commodities
and 18 levy recipient bodies.
The impending sunsetting of multiple levies legislative instruments triggered a thematic review of the
legislative framework by the department in 2017-18. The review found that the legislation serves the
objectives of the levy system and is necessary to the continuation of a successful industry-
government arrangement, but that the accumulation of ad hoc amendments have resulted in
legislation that is duplicative, complex, opaque, and inflexible. The review further concluded that the
administration of the current legislation is inefficient and creates unnecessary costs.
Policy options considered in this impact analysis are Option 1 - Status quo (remaking sunsetting
instruments with minimal change) and Option 2 - Modernising the agricultural levies legislation.
Modernising the levies legislative framework would include streamlining provisions that enable the
imposition, collection and disbursement of levies into fewer pieces of legislation. Operational details,
such as levy settings and obligations for collection agents, would consistently be included in
subordinate legislation. Existing provisions across the framework would be streamlined, modernised
and standardised, and the new legislation would be developed in accordance with modern drafting
standards. In addition, the following key changes would be implemented: adoption of modern
compliance arrangements to support flexibility and more proportionate enforcement measures; and
changes to the methodology underpinning matching funding arrangements to provide more clarity
and certainty to RDCs about their funding limits.
Option 2 would impose one-off transition costs associated with implementing and understanding the
modernised legislation of approximately $1.82 million (net present value over 10 years) on the
economy. Of these costs approximately $570,000 is likely to be borne by industry for compliance and
$1.25 million borne by government for administration. The costs are likely to break-even if the
proposed changes are effective in reducing regulatory burden by as little as 1%. This means that at
any level of regulatory burden reduction over 1%, the economy-wide benefits will outweigh the
economy-wide costs and the proposed changes are worth pursuing. The proposed changes under
Option 2 intend to consolidate and simplify the legislative framework and remove any out-dated or
redundant provisions that create confusion. This is likely to reduce regulatory burden by at least 1%,
indicating that the benefits of Option 2 outweigh the costs.
Extensive consultation has been undertaken to identify problems and options and inform the
development of the draft legislation. Industry stakeholders consistently expressed strong support for
the agricultural levy system and the modernising of the legislative framework which underpins it.
Feedback received has informed policy documents and the draft legislation.
The draft modernised legislation is scheduled to be introduced into Parliament for consideration and
approval prior to 1 April 2025, the sunsetting date of some levies legislative instruments. To support
the commencement of the new legislative framework, the department would also have to make
changes to educational information and systems.
Department of Agriculture, Fisheries and Forestry
v
Modernising the agricultural levies legislation
Introduction and background
Australian primary industries
In 2021-22, there were 87,800 agricultural businesses in Australia who employed approximately
300,000 people1 across the primary industries sector (ABARES 2023). The primary industries'
combined gross value of production was $93 billion (2.4% of the GDP) in 2021-22, out of which
around 72% of the total value was exported at an estimated value of $76 billion, accounting for
11.6% of goods and services exported.
The most valuable commodity groups were livestock products (including cattle, sheep and milk)
which accounted for approximately 38% of total production value as well as cereals and other
broadacre crops (including wheat, coarse grain and canola, among others) which also made up
approximately 38% of the total production value (Figure 1).
Figure 1: Agriculture, fisheries and forestry value of production, by commodity, 2021-22
Source: ABARES 2023
The agricultural levy system
Australia's agricultural levy system supports primary industries to be more sustainable and
prosperous through improved productivity, market access and competitiveness.
The agricultural levy system is a unique and successful partnership between the Australian
Government and agricultural industries that has been operating in various forms since 1936. The
current system is enabled by a legislative framework introduced in 1989. Industries choose whether
to establish a levy and the Australian Government then imposes the levy through legislation. The
government administers and disburses levies on behalf of primary producers for investment in
research and development (R&D), marketing, biosecurity activities, biosecurity emergency responses
and residue testing.
1
As the Australian Bureau of Statistics (ABS) Labour Force Survey (LFS) (ABS 2023c) only focuses on the
Australian resident civilian population, there is a significant number of overseas workers employed in the
agriculture sector not captured in the LFS. As a result, there is an underestimation of approximately 8%, or
25,000 workers
Department of Agriculture, Fisheries and Forestry
1
Modernising the agricultural levies legislation
By drawing on the Commonwealth's constitutional power to impose statutory levies and charges on
the products of primary industries, the agricultural levy system addresses the problem of under-
investment in agricultural R&D that may result from a free-rider problem. The imposition of levies
and charges on all producers in an industry prevents free-riders from taking advantage of the
benefits derived from investment in R&D made by a small number of producers. Levies are disbursed
to levy recipient bodies (LRBs) to invest for the purpose they are imposed to fund.
The Australian Government also matches industry investment in R&D up to legislated limits by
providing payments to research and development corporations (RDCs), the LRBs for R&D and
marketing levies. A target of investment in R&D equivalent to 1% of an industry's gross value of
production (GVP) was identified as the desired level of investment when the legislative framework
first was established in 1989. This target is still supported by the GVP limit on matching funding
today.
Agricultural industries are responsible for driving all aspects of their levy, including establishing or
discontinuing levies as needed as well as setting the specific levy rates and exemptions.
The agricultural levy system has grown over time as industries have chosen to establish statutory
levies on an increasing number of commodities. Approximately 92% of primary industries (by value
of production) have levies in place now. Over 110 levies are collected across primary industries on
over 75 leviable commodities including meat, dairy, field crops, forestry, game animals, horticulture,
live animal exports, livestock processing, poultry, wine and other primary industries.
In 2021-22, the department disbursed $973 million to LRBs, comprising $603 million in levies and
$370 million in Commonwealth matching funding for R&D. Of the total levies disbursed, $574 million
was for R&D and marketing, $17 million for biosecurity activities and emergency responses and
$12 million for residue testing (Department of Agriculture, Fisheries and Forestry 2023).
The investments made by levy payers and the Australian Government have been key to the growth
of Australian primary industries and are an important driver of productivity and profitability growth
in Australia (ABARES 2023a). It has been estimated that each additional $1 of R&D investment could
generate a return for farmers of $7.82 (ABARES 2023b).
Types of levies
There are 5 purposes for which agricultural levies or charges (levies) can be established under the
agricultural levy system.
• R&D levies allow industry to invest in systematic experimentation and analysis in any field of
science, technology, economics or business. They are invested by RDCs on behalf of industry.
• Marketing levies allow industry to fund marketing, advertising, or promotion of industry
products. They are invested by RDCs on behalf of industry.
• Animal Health Australia (AHA) and Plant Health Australia (PHA) levies allow industry to
fund member contributions to AHA and PHA. AHA and PHA facilitate a national approach to
enhancing Australia's animal and plant health status, through government and industry
partnerships for pest and disease preparedness, prevention, biosecurity emergency response
and management.
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• Emergency Animal Disease Response Agreement (EADRA) and Emergency Plant Pest
Response (EPPR) levies allow industry to repay the Australian Government, over a period of
time, an industry's share of the costs of a response to a pest or disease incursion under the
Emergency Plant Pest Response Deed (EPPRD) and the Emergency Animal Disease Response
Agreement (EADRA), where the government has underwritten the industry's contribution in
the first instance.
• National Residue Survey (NRS) levies allow industry to fund residue monitoring activities
undertaken by the NRS (within the department) to manage the risk of chemical residues and
environmental contaminants in Australian animal and plant products. NRS levies are used by
NRS to assist participating industries to demonstrate good agricultural practice and meet
importing country requirements.
Stakeholders
Multiple stakeholders interact with the agricultural levy system and play an important role in the
operation of the system (see Figure 2).
• Levy payers are growers, primary producers, processors, and importers or exporters of
leviable goods and are responsible for paying levies.
• Collection agents (also called intermediaries) operate at identified narrow points in the
supply chain that most leviable products flow through, such as sale yards, abattoirs or
markets and are responsible for collecting levies and submitting returns to the department
on behalf of levy payers.
• Industry representative bodies (IRBs) advocate on behalf of producers and levy payers. They
can propose to establish or amend a levy to industry and present the agreed proposal to the
Department and the Minister.
• The department is responsible for administering the levies legislation, which includes
receiving levy returns from collection agents, disbursing levies to LRBs and conducting
compliance activities. The department also provides advice and support to industry on
matters relating to the levy system.
• Levy recipient bodies (LRBs) are responsible for managing and investing levies and matching
funding for the benefit of relevant industries. There are 18 LRBs including 5 statutory and 10
industry-owned RDCs, AHA, PHA, and the NRS (administered by the department).
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Figure 2: Key stakeholders involved in the agricultural levy system
Processes
The levy system involves a number of processes from the establishment or amendment of levies and
the approval of legislative changes to the collection, disbursement and investment of levies (see
Figure 3).
• Development of levy proposals - Industry representative bodies develop levy proposals
after identifying a problem or opportunity facing industry and consulting with industry. If a
majority of industry participants support the levy proposal, the industry body submits the
proposal to the Minister.
• Approval of levy proposals and legislative changes - The Minister considers the levy
proposal, associated costs to the government and regulatory impact and the legislative
changes necessary to implement it presented by the department. If the Minister agrees to
the proposal, legislative changes will be drafted and considered by either the Parliament of
Australia (primary legislation) or the Federal Executive Council (subordinate legislation).
• Collection of levies - Collection agents collect levies from levy payers, submit levy returns
and make payments to the department. Some levy payers submit their returns directly
without going through a collection agent. The department provides support services to
collection agents and undertakes compliance activities.
• Disbursement of levies - The department disburses the collected levies to LRBs and provides
matching funding to RDCs for eligible R&D expenditure up to legislated limits. Costs for the
administration of levies are recovered by the department from LRBs.
• Investment of levies - LRBs invest the levies, on behalf of relevant industries and in
accordance with legislated spending requirements, in R&D, marketing, biosecurity activities,
biosecurity emergency response and the testing of animal and plant products for pesticides
and veterinary residues and environmental contaminants.
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Figure 3: Overview of processes of and flow of levies through the levy system
Legislative framework
The legislative framework that underpins the levy system consists of imposition, collection and
disbursement legislation.
Imposition legislation
Imposition legislation imposes excise levies and customs charges on commodities. There are
currently 5 Acts and 7 subordinate instruments.
• Primary Industries (Excise) Levies Act 1999
• Primary Industries (Customs) Charges Act 1999
• National Residue Survey (Excise) Levy Act 1998
• National Residue Survey (Customs) Levy Act 1998
• Horse Disease Response Levy Act 2011
Collection legislation
Collection legislation provides for collection arrangements for excise levies and customs charges.
There are currently 2 Acts and 2 subordinate instruments.
• Primary Industries Levies and Charges Collection Act 1991
• Horse Disease Response Levy Collection Act 2011
Disbursement legislation
Disbursement legislation authorises and governs payments of levies to LRBs and matching funding to
RDCs. There are currently 13 Acts and 17 subordinate instruments.
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• Australian Meat and Live-stock Industry Act 1997
• Dairy Produce Act 1986
• Egg Industry Service Provision Act 2002
• Forestry Marketing and Research and Development Services Act 2007
• Horticulture Marketing and Research and Development Services Act 2000
• Pig Industry Act 2001
• Sugar Research and Development Services Act 2013
• Wool Services Privatisation Act 2000
• Primary Industries Research and Development Act 1989
• Wine Australia Act 2013
• Australian Animal Health Council (Live-stock Industries) Funding Act 1996
• Plant Health Australia (Plant Industries) Funding Act 2002
• National Residue Survey Administration Act 1992
A full list of all Acts, regulations and other subordinate instruments of the agricultural levies
legislation framework is at Appendix A: Current levies legislation.
About this impact analysis
This impact analysis has been prepared in accordance with the Australian Government Guide to
Policy Impact Analysis (Office of Impact Analysis 2023). It presents the problems identified with the
agricultural levies legislative framework informed by the results of multiple reports, including a
review and stakeholder consultations undertaken by the department. It also provides the results of a
cost-benefit analysis (CBA) which was undertaken by Deloitte Access Economics of the option to
modernise and streamline the legislation relative to the status quo. The impact analysis builds on the
early assessment regulation impact statement completed in 2019 (OBPR ref 24492) (Department of
Agriculture 2019).
The structure of the remainder of the report is as follows:
Chapter 1: The problem
Chapter 2: Need for government intervention
Chapter 3: Policy options considered
Chapter 4: Potential impact of options
Chapter 5: Consultation undertaken
Chapter 6: Best option and how it will be implemented
Chapter 7: Evaluation of chosen option
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1 The problem
The current agricultural levies legislation has been in place since 1989 and has grown over time as
industries have chosen to establish statutory levies on more commodities. There are more than 50
pieces of legislation governing over 110 levies across over 75 commodities and 18 levy recipient
bodies.
The impending sunsetting of multiple levies legislative instruments triggered a thematic review of the
legislative framework by the department in 2017-18. The review found that the legislation serves the
objectives of the levy system and is necessary to the continuation of a successful industry-
government arrangement, but that the accumulation of ad hoc amendments have resulted in
legislation that is duplicative, complex, opaque, and inflexible. The review further concluded that the
administration of the current legislation is inefficient and creates unnecessary costs.
The key issues identified by the review and the early assessment regulation impact statement, and
confirmed through ongoing stakeholder consultation as well as further analysis undertaken by the
department, are presented below.
1.1 Complexity
The large number of Acts and subordinate instruments that make up the legislative framework
evolved over the last 30 years. This has involved numerous ad-hoc additions and amendments which
have increased the complexity of the framework. There are also a number of instruments and
provisions that are spent, redundant or which no longer serve a purpose under the current
framework. In 2015, the Senate Rural and Regional Affairs and Transport References Committee
asserted that the legislative framework for agricultural levies is 'complex, convoluted and difficult to
penetrate' and that 'this complexity is evident at every stage of the process' (Senate Rural and
Regional Affairs and Transport References Committee 2015).
The main driver of complexity is the dispersion of related provisions and operational details across
multiple Acts and subordinate instruments. For example, a cattle producer would have to look at
over 45 sections in 9 different pieces of legislation to understand their levy obligations. To
understand where their levy funds are directed, they would have to look at another 3 pieces of
legislation.
Throughout the legislative framework there are provisions that rely on cross-referencing to other
parts of the framework to have effect. There are also duplications and many inconsistencies between
different parts of the framework. As new RDCs have been created and moved from statutory to
industry-owned models over time, new Acts have been created. These Acts generally provide for the
same outcomes in practice but are drafted in different ways using different approaches and
language. This makes it difficult to provide clear and consistent guidance that applies to all RDCs.
Other complexities are related to some of the mechanisms currently prescribed within the
legislation. For example, the methodology for calculating one of the matching funding limits, the GVP
limit, involves a 3-year rolling average of an industry's GVP, including the current financial year and
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the 2 previous financial years. The inclusion of the current financial year means that the limit on
matching funding for each RDC is not known until the end of the financial year. This has led to
complex administrative processes for matching payments and presents funding uncertainty for RDCs.
1.2 Inconsistencies
As mentioned above there are inconsistencies across the legislative framework. One of them is the
way operational details for different commodities are included in the legislation. Levy settings are
inconsistently spread across primary legislation and subordinate legislation. There are also
inconsistencies in relation to levy requirements as well as terms used. An example is the 12 different
terms used to describe the role of IRBs and 5 variations on the role itself.
Another area of major inconsistency is the legislative arrangements for matching funding. Some of
the disbursement regulations include a formula for how the GVP limit is determined and others do
not. For those that do, the GVP limit may be determined by the minister or the secretary. The total
levies limit on matching funding also varies for different industries, and does not apply at all to some
industries. Complex legislative arrangements have been developed over time to provide for
additional amounts to be matched above levies. Some disbursement Acts include an explicit
provision to allow for matching of past expenditure in future years, while others provide for this
indirectly through the way the matching funding limits operate.
Box 1: Matching funding limits
The Commonwealth provides matching funding to most RDCs according to the lesser of 3 limits:
• 50% of eligible expenditure on R&D (expenditure limit)
• levies collected or disbursed (total levies limit)
• 0.5% of an industry's Gross Value of Production (GVP), averaged over the current and 2 previous financial
years (GVP limit).
1.3 Lack of flexibility
Stakeholders have repeatedly emphasised a need for increased flexibility to improve their ability to
ensure levies are optimally set. As many of the operational details for levies are distributed across
multiple Acts or instruments, it can be a complicated and lengthy legislative process to change levies.
Where primary legislation needs to be changed, it can take even longer as the amendments need to
be considered and approved by the Australian Parliament. Depending on several factors, levy
proposals can take up to 3 years or more from idea to implementation. This can impact on an
industry's ability to redirect funding to new priorities in a timely manner.
Another area of the legislation that unnecessarily restricts industries' ability to increase their levy
investments is the maximum levy rates currently imposed on some levies. This issue was identified by
the Productivity Commission in its report on rural R&D (Productivity Commission 2011) and led to the
repeal of most of the maximum levy rates for R&D and marketing levies. However, some were
overlooked and the maximum levy rates for biosecurity and NRS levies also remained.
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There is also a lack of flexibility in the legislative framework in relation to compliance tools available
to the department. The limited compliance tools available are not flexible enough to appropriately
respond to different levels of non-compliant behaviour. The only penalties available are through
criminal prosecution. Other enforcement tools are limited and do not have penalties (either civil or
criminal) attached. The compliance framework is also not consistent with other modern compliance
frameworks used across government.
The use and disclosure of levy and charge information is regulated under the legislative framework. A
need has been identified for the department (e.g. ABARES) and other Commonwealth entities to be
able to access certain information for agricultural policy, research and statistical purposes.
Another limitation of the current legislative framework is that levies can only be imposed on
products or goods. This has prevented the bee industry from establishing a levy on bee pollination
services (the levy would be on the service, not the bees themselves). A similar issue also required the
horse disease response levy to be enacted in standalone legislation.
1.4 Effects on stakeholders
These issues have created uncertainties and imposed unnecessary costs on industry and
government. Stakeholders have difficulty understanding their rights and obligations and may
misinterpret the law. This results in increased information requests to the department and a higher
level of unintentional non-compliance among stakeholders. In addition, legislative amendments, such
as adjustments of levy rates, have been complicated and taken a long time to implement.
The time and effort that levy payers and collection agents currently spend speaking with the
department to understand and ask questions regarding their obligations on an ongoing basis
collectively added up to over 4,202 calls in 2018-19 (Department of Agriculture, Water and the
Environment 2020). The total cost related to responding to the levy-related queries, including those
generated from incorrect returns and/or payments, was $438,371 (Department of Agriculture, Water
and the Environment 2020).
Poor levy understanding has been identified as the highest contributor to levy underpayments and
overpayments. Between 2013-14 and 2018-19, the average compliance rate across all collection
agents was 66%2 , with an average $2.6 million in levy adjustments (Department of Agriculture,
Water and the Environment 2020). Levy adjustments include levy underpayments collected from levy
payers and levy overpayments returned to levy payers. The additional processing required by the
department to administer levy underpayments and overpayments adds to the regulatory burden and
total cost for stakeholders.
2
A collection agent is determined as non-compliant if their return contains data entry errors, if they have
incorrect payments or if information has been discovered in their records that leads to the identification of new
agents.
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1.5 Available data
In identifying and analysing the issues outlined above, the department undertook detailed analysis of
the existing legislative framework and comprehensive consultation with relevant industry
stakeholders. Stakeholder consultation was also conducted with relevant policy and administrative
areas of the department. Data on levies and matching funding collected and disbursed as well as
costs relating to the administration of the levies legislation have been sourced from published
reports to levies stakeholders and internally from the levies administration area of the department.
The consultation and analysis outlined above has enhanced the department's understanding of
existing areas of regulatory burden and informed the proposed legislative changes. An assessment of
overall regulatory burden associated with the agricultural levies legislation has not been undertaken,
due to the effort and imposition on stakeholders that would be required to develop a comprehensive
estimate. However, the department is aware of the value placed on the levy system by industry
stakeholders, and the importance of supporting it with an effective legislative framework that
imposes minimum regulatory burden. The changes proposed in the modernised levies legislation
intend to deliver this outcome.
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2 Need for government intervention
2.1 The need for legislative change by government
There is already an established need for a partnership between the Australian Government and
industry to facilitate investment in industry priorities and a continued need for a legislative
framework to enable this partnership. The department has consulted directly with levy stakeholders
who continue to express their support for this system, where levies are initiated by industry and
legislated by the Australian Government.
The sunsetting levies legislative instruments require government action. The problems identified in
Chapter 1 - a legislative system that is overly complex, inconsistent, and lacking in flexibility - are a
direct consequence of the way that the legislative framework, which underpins the agricultural levy
system, is currently drafted and structured. The only way the problems can be addressed is through
legislative change by the Australian Government. Non-regulatory alternatives (for example, industry-
developed guidelines) are considered impractical for the reasons set out below. As such, alternatives
to government action to address the problems are not considered in this impact analysis.
2.2 Objectives of government intervention
The main objective of the government's intervention is to maintain the purpose and function of the
agricultural levy system through the levies legislative framework.
The secondary objectives of the government's intervention are the streamlining and modernising of
the legislation to reduce complexities, amend inconsistencies and improve flexibility. This includes
reducing the regulatory burden and compliance costs imposed on industries in their ongoing effort to
understand and comply with their legal obligations.
No changes are intended to be made through this process to the key elements of the system, the
collection and disbursement of levies to support investment in R&D, marketing, biosecurity activities,
biosecurity emergency responses and residue testing. The intervention would also not change levy
rates as such changes have to be initiated by industry.
2.3 How success will be measured
Success of the government intervention would be a legislative framework consisting of fewer pieces
of legislation, with less duplication and inconsistencies, clearer structure, more flexibility and drafted
to modern standards. This would mean the legislation should be easier to read and understand. This
would also mean reduced regulatory burden and compliance costs for stakeholders as it would
reduce the time and effort spent on understanding and complying with their obligations.
It would also mean that legislative amendments to operational details would be easier and quicker to
make. These improvements would not only lead to a reduction in regulatory burden, but also support
industry and the department to implement future policy changes more efficiently and effectively.
There may still be some barriers for industry stakeholders in relation to interacting with the new
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legislative framework. Even modernised legislation may still be difficult to understand. However,
simpler and more consistent provisions would make it easier for the department to develop guidance
material. Stakeholders would have to engage with the material provided and spend time reading it.
Some level of stakeholder engagement would be required to achieve the desired outcomes such as
reduced compliance rates.
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3 Policy options considered
3.1 Option considered but not progressed for analysis
3.1.1 Non-regulatory option
Consistent with the Australian Government Guide to Policy Impact Analysis and the approach taken
in the early assessment RIS, a non-regulatory option has not been explored in further detail in this
impact analysis (Office of Impact Analysis 2023, Department of Agriculture 2019). A non-regulatory
option would not achieve the government's main objective of maintaining the current agricultural
levy system through a legislative framework. The agricultural levy system draws on the
Commonwealth's constitutional power to impose statutory levies and charges, requested by
industries, on the products of primary industries. A non-regulatory option would also be
contradictory to the commitment by successive governments to RDCs and matching funding for R&D
investment. Removing the Australian Government's role in the administration of the levy system
would pose an unacceptable risk to agricultural industries and would adversely impact on Australia's
economy.
An option to 'do nothing' and allow the legislation to sunset has also not been explored. Letting the
sunsetting instruments lapse would also pose an unacceptable risk to agricultural industries.
3.2 Options for analysis in this impact analysis
3.2.1 Option 1: Status quo
Option 1 would not involve any additional government intervention other than to remake the
sunsetting legislative instruments with minimal change.
As such, this option would maintain the legislative framework in its current form. This option would
not address the problems outlined in Chapter 1. It would also not align with the government's
commitment to promoting clearer, less complex laws.
Under this option it is likely that the existing legislative framework would continue to develop in an
ad hoc and inefficient manner (by amendment, addition of new legislation and/or repeal of existing
legislation) over time in response to industry requirements. This may make it increasingly harder to
make amendments and implement government policy effectively and efficiently. Regulatory burden
could also continue to grow, along with unintentional non-compliance. The department could
increase its communication and educational materials to support understanding of and compliance
with the legislation, but this would increase costs which would need to be recovered from industry
and would not address the root cause of the problem.
3.2.2 Option 2: Modernising the agricultural levies legislation
Option 2 proposes changes that are consistent with the objectives of maintaining the purpose and
function of the agricultural levy system and making improvements to the legislation that support the
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agricultural levy system by reducing complexity, amending inconsistencies, and improving flexibility
across the current legislative framework.
This would include streamlining provisions that enable the imposition, collection and disbursement
of levies into fewer pieces of legislation. The primary functions of the levy system - imposition,
collection and disbursement of levies - would be enabled through consolidated primary legislation.
Figure 4: Proposed modernised levies legislative framework
A Services Levies Bill would be developed to enable levies to be imposed on certain agricultural
services. A separate Bill is necessary as the Constitution provides for rules about the form of laws
imposing taxes. Separate Bills for imposing excise levies, customs charges and levies on services are
required to comply with those rules. This Bill would enable a potential bee pollination services levy to
be enacted in future, something not possible under the current legislative framework (as noted in
section 1.3).
The new Excise Levies Bill would also incorporate the horse disease response levy which is currently
imposed on its own in stand-alone legislation. The Excise Levies and Customs Charges Bills would also
enable similar levies and charges to be enacted in future.
All operational details, such as levy settings and obligations for collection agents, would be included
in subordinate legislation only. All levies relating to a particular agricultural commodity would be
listed in the same place. Similarly, all levies and charges attached to a particular levy recipient body
would be listed in the same place.
The new legislation would also be developed in accordance with modern drafting standards and
introduce consistent language, concepts, and requirements across the legislative framework.
Examples include consistent terms for levy payers and collection agents, payment due dates and
record keeping requirements.
One consistent set of disbursement provisions would be developed for all RDCs (except for separate
matching funding provisions for the Fisheries Research and Development Corporation (FRDC)). This
would allow for the repeal of existing disbursement provisions across 10 disbursement acts.
Existing provisions would be streamlined, modernised and standardised across the whole legislative
framework. In addition to this, key changes would include:
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• Introducing standard regulatory powers: Compliance and enforcement powers in the
Collection Bill would involve alignment with the Regulatory Powers (Standard Provisions) Act
2014. This would provide new enforcement tools and would increase consistency with other
Commonwealth regulatory schemes that collection agents participate in.
• Modernising and strengthening information management: The Collection Bill would include
more comprehensive and modern information management provisions. This would include
the extension of access to data for ABARES (within the department) and other
Commonwealth organisations (for specific purposes only).
• Consistently specifying role of IRBs: The role of IRBs in relation to levies would be simplified,
clarified and more consistently expressed.
• Removing maximum levy rates: Any remaining maximum levy rates for R&D and marketing
would be removed. Levy rates could not be set higher than what is recommended by IRBs.
• Enabling levy polls for all industries (if requested): Existing dairy and wool polls would be
enabled under imposition legislation (rather than disbursement legislation). New provisions
would enable levy polls to be established in relation to any levy, if requested by industry.
• Standardising matching funding arrangements: Matching funding would be limited by the
expenditure limit (50% of RDCs' R&D expenditure) and GVP limit (0.5% of an industry's
average GVP). Common R&D definition would apply to determine what activities can be
matched. Carry-over of eligible R&D expenditure for matching in future years would be
explicitly included in the new legislation.
• Removing total levies limit: One of the current matching funding limits, the total levies limit
(total of levies received by RDC) would be removed.
• GVP limit based on 3 previous financial years: The GVP limit for matching funding would be
based on data for the 3 previous financial years (currently based on the current and 2
previous financial years).
• Standardising spending requirements for RDCs: Spending of levies by RDCs would be
consistently and clearly linked to the purpose for which the levy has been imposed (R&D,
marketing, general). Spending of matching funding would be for R&D only. Allowable
spending of general levies and any industry specific spending requirements would be
included in subordinate legislation.
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4 Potential impacts of options
4.1 Approach to estimating costs and benefits
This chapter summarises the CBA undertaken by Deloitte Access Economics to assess the potential
impacts (costs and benefits) of Option 2 (modernising the agricultural levies legislation) on industry
stakeholders and the government, relative to Option 1 (the status quo).
CBAs provide a robust, structured and transparent approach to balancing the different impacts,
modelling the potential economic costs and benefits where possible. Given there are no major policy
changes being considered, the CBA summarised in this chapter focuses on regulatory burden
reduction and therefore, draws upon regulatory burden measurement (RBM) methodology to
estimate the value of benefits in the form of improvements in regulatory burden.
This chapter first defines the different costs and benefits quantified and monetised in the CBA and
notes the other broader qualitative benefits that the reforms are intended to support (but which are
not modelled in the CBA).
The results of the CBA are then summarised to compare the two options. The costs to implement
and administer each option are presented first. In terms of benefits, there is a degree of uncertainty
regarding the effectiveness of Option 2 in reducing regulatory burden. In cases such as these, a
break-even approach is commonly used when the benefits, or the magnitude of likely benefits, are
uncertain and therefore difficult to quantify. Break-even analysis is a technique that involves
estimating the scale of benefits required to offset the estimated costs of an option.
This chapter summarises the break-even approach used by Deloitte Access Economics to determine
the level of benefits, in terms of regulatory burden reduction, needed to offset the estimated costs.
A detailed description of the approach taken to quantify the costs for each stakeholder and detailed
inputs, assumptions and calculations used to do so is outlined in the CBA report in
Appendix B: Cost-benefit analysis
report .
4.1.1 Quantifiable costs and benefits
The costs to industry have been quantified based on a series of estimates relating to the likely
transition costs imposed by Option 2, relative to Option 1 (the status quo). These are one-off costs,
primarily associated with the time and effort required to understand the proposed changes to the
levies legislation. An estimation of the costs imposed on government is also provided based on the
time and effort expected to communicate the changes to industry, to develop and implement new
systems, processes and guidance material, and to undertake additional staff training.
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The quantifiable benefits in this analysis take the form of cost savings (in terms of time and effort)
that are expected to accrue to industry stakeholders as a result of a reduction in regulatory burden.
These benefits have been measured and monetised using RBM methodology in line with the
Australian Government Guide to Policy Impact Analysis (Office of Impact Analysis 2023), which
estimates the incremental reduction in costs between the status quo and the scenario in which the
proposed changes under Option 2 are implemented. Similarly, the quantifiable benefits to
government in this analysis include the anticipated cost savings (in terms of time and effort)
associated with administering a levy system that is easier to administer (largely due to less time
required to help stakeholders understand the system) and the ability to adopt a more proportionate,
risk-based approach to compliance activities.
4.1.2 Unquantified benefits
Relative to Option 1, the proposed changes under Option 2 are also anticipated to deliver a wider
range of benefits that are not quantified or monetised in the CBA due to their intangibility. These
benefits are primarily expected to increase the effectiveness of the levies legislation in achieving its
regulatory objectives. While not quantified, these benefits are still highly valuable and are a key
driver of the proposed reforms. These benefits include, for example:
• Improved flexibility and responsiveness of the levies legislative framework to the changing
needs of Australia's agricultural industries, particularly through easier and faster legislative
amendments.
• Improvements in industry confidence through increased consistency, transparency, or
predictability of the legislative framework. For example, the earlier determination of the GVP
limit would provide RDCs with increased investment certainty, as they would know what
their GVP limit on matching funding is at the beginning of the financial year.
• More proportionate and targeted compliance activities through the adoption of civil penalty,
infringement notice and injunctions provisions of the Regulatory Powers (Standard
Provisions) Act 2014. This would significantly improve the department's compliance
programs so that entrenched low level non-compliance is targeted and criminal penalties are
then only used for the most serious offending conduct.
4.2 CBA results
4.2.1 Costs of the proposed options
Option 1, which reflects the status quo, would not involve any additional government intervention
other than to remake the sunsetting legislative instruments with no or minimal change. However,
under Option 1, the current structure of the legislative framework would remain large, complex and
sometimes difficult to navigate due to duplication and inconsistency in some provisions.
Option 1 is not expected to impose transition costs on industry or government. The problems
identified in Chapter 2 would, however, continue and potentially aggravate with further
amendments and new stakeholders entering the system. For example, increased difficulty in
understanding legislative obligations, may further increase regulatory burden and unintentional non-
compliance.
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Compared to Option 1, Option 2 is expected to impose one-off transition costs in the first year of
implementation for both industry and government. Here, the main cost to industry (including levy
payers, collection agents, IRBs and LRBs) is the time and effort required to understand the changes to
the levies legislative framework. In total, the one-off costs to industry (compared to the status quo)
are estimated to be approximately $610,000 in the first year of implementation. Discounting these
costs over a 10-year period, the costs to industry are approximately $570,000 (NPV over 10 years) or
approximately $61,000 per year (on average) (Table 1). Given the nature of Option 2, all of the costs
to industry are borne in the first year as a result of the one-off transitional activities.
The cost of Option 2 to government is higher than that of the costs to industry because, beyond
communicating the changes to industry, there is likely to be more transitional activities required of
government in administration and implementation. The main administrative costs to the department
are associated with the implementation of the new legislative framework in the first year including
initial communication and education of industry regarding the proposed changes under Option 2, the
training of staff and the updates required to guidance material, internal processes and systems. In
total, the cost to government (compared to the status quo) is estimated to be approximately
$1.25 million (NPV over 10 years) (Table 1).
Table 1: Summary of costs to industry stakeholders
Stakeholder Total cost over 10 years (NPV) Average cost per year
Industry stakeholders $570,000 $61,000
Levy payers and agents $461,000 $49,000
IRBs $43,000 $5,000
LRBs $66,000 $7,000
Government $1,253,000 $134,000
Total $1,823,000 $195,000
Table 2 summarises the average annual regulatory costs for key stakeholders posed by the different
reform options, from business as usual. The average costs noted in Table 2 reflect the average costs
to business over a 10-year period which comprise only one-off transaction costs in the first year of
$570,000, and no costs every year thereafter. No changes in regulatory costs are anticipated for
community organisations or individuals.
Table 2: Regulatory Burden Estimates table
Change in costs ($ million) Business Community Individuals Total change in
organisations costs
Total, by sector $0 $0 $0 $0
(Option 1: Status quo)
Total, by sector $61,000 $0 $0 $61,000
(Option 2: Streamlining legislation)
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4.2.2 Addressing uncertainty through break-even analysis
Break-even analysis has been applied to the CBA model to identify the benefits over 10 years
required to offset the one-off direct cost impacts associated with Option 2, compared with the status
quo (Option 1). The results from the CBA should therefore be regarded as a test of whether the
benefits are likely to offset the costs.
The CBA results suggest that the monetised economy-wide benefits and costs associated with the
proposed reforms will break-even if the changes are effective in reducing regulatory burden by as
little as 1% (approximately) - see Table 3. This would mean a 1% reduction in the quantity of
compliance and administrative activities and/or a 1% reduction in the average cost of those activities.
In other words, for any level of regulatory burden reduction over and above 1%, the economy-wide
benefits will outweigh the economy-wide costs and Option 2 would be worth pursuing.
The proposed changes under Option 2 intend to consolidate and simplify the legislative framework
and remove any out-dated or redundant provisions that create confusion. Therefore, given that the
scale of improvement in regulatory burden required to break-even (1%) is considered relatively
minor, the improvements required to break even are considered very likely. For example, in the case
of calls made by industry to the department, a 1% reduction in call volume would mean a reduction
of 36 calls out of a total of 4,202 calls per year.
Table 3: Economy-wide break-even analysis (at an effectiveness rate of 1%)
Benefits Costs BCR
Economy-wide $1,823,000 $1,823,000 1.00
Industry $1,591,000 $570,000 2.79
Government $232,000 $1,253,000 0.19
4.2.3 Benefits of the proposed options
At an effectiveness rate of 1%, Option 2 would yield benefits equal to the value of costs. In terms of
benefits for industry, to the extent that the proposed changes reduce unnecessary complexity,
duplication and potential contradiction in the legislative framework, Option 2 is expected to lower
barriers to interacting with the agricultural levies legislation. In doing so, the proposed changes can
reduce the regulatory burden imposed on industry by making it easier to understand and comply
with the requirements of the levies legislation. As such, the benefits quantified in this section take
the form of avoided costs to industry, measured as the value of time and effort saved. For industry,
this amounts to approximately $1.6 million in benefits (NPV over 10 years) or approximately
$227,000 per year (on average).
Relative to Option 1, Option 2 is expected to reduce the current costs associated with the
administration of the agricultural levies legislation by the department. This is because making
legislative obligations easier to understand is expected to reduce the need for the department to
educate industry on these matters and enforce compliance. Some changes are also expected to
improve the ease and efficiency of the department's collection and disbursement of levies. For
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government, this translates to approximately $232,000 in benefits (NPV over 10 years) or
approximately $33,000 per year (on average).
An estimate of the feasible benefits which would accumulate to industry and to government if the
proposed changes under Option 2 were 1% effective (the economy-wide break-even point) in
reducing regulatory burden are summarised further in Table 4. Here, while economy-wide benefits
are equal to economy-wide costs, the benefits to industry are higher than that to government as the
proposed changes under Option 2 are expected to result in larger reductions in regulatory burden to
industry in comparison to any associated reductions in administrative costs to government.
Table 4: Summary of benefits at break-even effectiveness rate (1%)
Stakeholder Total benefit over 10 years (NPV) Average benefit per year
Industry stakeholders $1,591,000 $227,000
Levy payers/agents $1,571,000 $224,000
IRBs $3,000 $500
LRBs $17,000 $2,000
Government $232,000 $33,000
Total $1,823,000 $260,000
4.3 Small business and competition impacts
4.3.1 Impacts on small businesses
Relative to Option 1, Option 2 does not change the roles or obligations of levy stakeholders. The
majority of costs imposed by Option 2 comprise one-off transition costs associated with the initial
time and effort required by levy stakeholders to understand and familiarise themselves with the new
legislation. Therefore, in theory, smaller levy stakeholders (including levy payers, collection agents,
IRBs and LRBs) may be disproportionately impacted relative to larger ones. This is because small
businesses often have less financial and labour resources to expend to comply with and undertake
these regulatory activities. Small businesses, with less technical expertise are also more likely to
require more time in interpreting the changes. This said, the actual impact on an individual
stakeholder of understanding the changes is small (e.g. half an hour of time). In addition, the benefits
of Option 2 relative to Option 1 (increased clarity and guidance in interpreting legislation) can
present proportionally greater time savings for small businesses.
Further, the CBA assumes that levy stakeholders who are more actively involved in the operation of
the levy system including collection agents, IRBs and LRBs are more likely to exert more time and
effort to understand the proposed changes under Option 2. As these costs are fixed, larger
organisations may be better equipped to take on the initial increase in regulatory burden. Again, as
the majority of costs are only imposed in the first year of implementation, the likely burden on each
stakeholder over the longer term is expected to be minimal.
The removal of the total levies limit under option 2 is expected to impact on a very small number of
RDCs only. In 2021-22, only 3 RDCs were limited by the total levies limit in practice. All other RDCs
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were limited by expenditure or the GVP limit. For those 3 RDCs, the removal of the total levies limit
would mean an increase in matching funding. These financial benefits to some RDCs have not been
included in the CBA as they represent a direct transfer from government to industry and therefore do
not have a net impact on economy-wide impacts.
4.3.2 Impacts on competition
Option 2 is expected to impose minimal impacts on competition. If anything, by reducing regulatory
burden, additional time and effort may be freed up for levy stakeholders to focus instead on other
priority business-as-usual activities. For example, instead of spending time trying to understand the
legislation and their obligations under it, levy payers may spend that time undertaking business
planning activities. This may improve competitive conditions within the agricultural market.
Further, improving the effectiveness and efficiency of the legislation is likely to better ensure the
optimal investment of industry funding. This may work to promote competitive conditions within
Australian primary industries by increasing the quality and appropriateness of the output of
investment in line with industry priorities including research and development, marketing and
biosecurity.
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Modernising the agricultural levies legislation
5 Consultation undertaken
The department has undertaken consultation to identify problems and options and inform the
development of the draft legislation. During legislation development, consultation has been
undertaken to clarify details relating to the existing legislation, provide clarity on the nature of
changes and identify any potential unintended consequences of the new legislation.
The consultation has been broad and has involved public as well as targeted consultation processes.
Key stakeholders consulted to date include:
• Levy payers
• Collection agents
• IRBs
• LRBs, including RDCs, PHA, AHA and the NRS area in the department
• Other industry stakeholders
• Government stakeholders
In 2017-18, IRBs and RDCs were consulted to inform the thematic review of the levies legislative
framework, triggered by the impending sunsetting of multiple levies related instruments. The review
was informed by reports by the Senate Rural and Regional Affairs and Transport References
Committee in 2014 and 2015 and a study undertaken by ACIL Allen Consulting in 2016 in relation to
the levy system. These reports incorporated stakeholder views on challenges and opportunities for
reform. Key stakeholder views reported in these reports include support for the levy system, the
need to reduce complexity and to improve the efficiency and flexibility of the system.
In 2019-20, public consultation was undertaken on the early assessment regulation impact statement
(RIS). 66 submissions were received from levy payers, IRBs and collection agents, and the department
held targeted discussions with RDCs, AHA and PHA. Stakeholders expressed a clear preference for
streamlining and modernising the legislation (Option 2) rather than remaking the sunsetting
instruments (Option 1). Stakeholders also expressed support for:
• using the Commonwealth's regulatory powers framework in the design of the new legislation
• amending the calculation of the GVP limit to include data from the three previous financial
years rather than the current and two previous financial years
• removing the total levies limit on matching funding.
In 2021-22, the department conducted targeted consultation with IRBs and RDCs to inform the
development of the legislation and wrote to around 7,500 collection agents to provide information
about the proposed approach to the new legislative framework. The main feedback received from
the majority of RDCs related to the definition of R&D. RDCs highlighted the importance of R&D
extension activities and suggested that the definition should be modernised to ensure that the scope
and priorities of the work undertaken by RDCs are adequately reflected. IRBs provided input to assist
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Modernising the agricultural levies legislation
with the redrafting of their levies, including details on how their levies were working in practice and
feedback on proposals to improve consistency of key terms across the new framework.
In May-June 2023, a public consultation process on the draft Bills, regulations and rules was held.
This consultation gave stakeholders an opportunity to see and provide feedback on the draft
legislation. 62 responses were received, 51 responses to targeted survey questions and 11 written
submissions. Meetings were also held with a variety of stakeholders including IRBs, RDCs, AHA and
PHA. Stakeholder feedback focused on specific provisions such as the definition of R&D and the
determination of the GVP limit. Stakeholders sought clarity around the implementation of the draft
legislation, including the operation of proposed compliance powers and information sharing. The
feedback provided will inform the finalisation of the draft legislation.
Further consultation is expected to be undertaken in late 2023 or early 2024 on the full draft
regulations and rules, including provisions for the remainder of the levies that were not drafted by
the time of the May-June 2023 consultation.
In summary, industry stakeholders consistently expressed strong support for the agricultural levy
system and the need for it to be underpinned by legislation. They provided feedback on strengths
and issues of the system and the legislative framework. Common issues identified were the
complexity of the legislation and the need to make the levy amendment process simpler and quicker.
Stakeholders also consistently agreed that redundancies should be removed, and the legislation
standardised and simplified where possible.
The feedback received was incorporated into the review, early assessment RIS and this impact
analysis and considered in the development of the draft legislative framework. Most of the key
concerns raised by stakeholders were addressed. Some stakeholders expressed a view that the effort
required to amend levies should be proportional to the change being sought. The department is
limited in its ability to increase flexibility for amending levies. There are whole of government and
parliamentary processes which must be followed when creating or amending tax laws. However, the
department's Levy Guidelines were updated in 2020 to make it clearer that industry's consultation
can be proportional to the proposed change.
In addition, some stakeholders raised issues or asked for policy changes which were outside the
scope of streamlining and modernising the legislation. The department has recorded all stakeholder
feedback and will consider it further in future policy processes.
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Modernising the agricultural levies legislation
6 Best option and how it will be
implemented
6.1 Best option
Based on the CBA in Chapter 4, and informed by several rounds of consultation, the best option to
address the policy problem is Option 2. Option 2 is expected to achieve its primary objective in terms
of maintaining the purpose and function of the agricultural levy system in supporting industry
investment in R&D, marketing, biosecurity activities, biosecurity emergency response and residue
testing. Option 2 is also expected to achieve the objective of streamlining and modernising the
agricultural levies legislation.
Option 2 does not propose changes to levy settings or the policy underpinning the levy system.
Instead, option 2 will involve a number of changes to restructure, clarify and simplify aspects of the
legislative framework that relate to the administration of the levy system.
The proposed changes are expected to impose one-off transition costs associated with implementing
and understanding the modernised legislation of approximately $1.82 million (NPV over 10 years) on
the economy. Of these costs approximately $570,000 is likely to be borne by industry for compliance
and $1.25 million borne by government for administration. The distribution of costs is likely to be
concentrated in the first year of implementation and become immaterial in the longer term.
These costs are likely to break-even if the proposed changes are effective in reducing regulatory
burden by as little as 1% (approximately). This would involve a 1% reduction in the quantity of
compliance and administrative activities and/or a 1% reduction in the average cost of those activities.
This means that at any level of regulatory burden reduction over and above 1%, the economy-wide
benefits will outweigh the economy-wide costs and the proposed changes are worth pursuing.
The scale of improvement in regulatory burden required to break-even (1%) is considered relatively
minor and therefore feasible. For example, in the case of calls made by industry to the department, a
1% reduction in call volume would comprise just 36 calls out of 4,202 per year. At this level of
effectiveness, the benefits to industry could be expected to reach approximately $1.59 million (NPV
over 10 years) and for government, approximately $232,000 (NPV over 10 years). Here, the
monetised benefits associated with the preferred option take the form of avoided costs to industry
associated with a reduction in regulatory burden. Improvements in the efficiency of government
administration of the legislation are also expected to result in benefits in the form of avoided costs.
6.2 Implementation
Option 2 requires redrafting of the whole levies legislative framework. This involves drafting new Bills
and subordinate legislation and repealing existing legislation.
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Modernising the agricultural levies legislation
To date, new Bills have been drafted and exposure draft consultation on those Bills has been held.
These Bills will have to be considered and passed by both Houses of Parliament before they can
come into effect. Drafting of subordinate legislation is ongoing and will require further consultation.
The new legislative framework is scheduled to commence before 1 April 2025, the sunsetting date
for some levies legislative instruments. The legislative package will need to commence prior to the
sunsetting date of those instruments to avoid disrupting levy imposition and disbursement of funds.
The size of the legislative package and competing legislative priorities pose a risk to achieving this
timeframe. To manage this risk the Bills have been scheduled to be introduced into Parliament in
Spring 2023 to allow sufficient time for the passage of the Bills and the subsequent approval
processes of subordinate legislation.
To support the commencement of the new legislative framework, the department would also have
to make changes to internal and external information and resources, train staff and make changes to
systems that support the administration of the levies legislation. Stakeholders would need to be
informed about the legislative changes and any changes to administrative processes ahead of
commencement. The department would also have to prepare for a temporary increase in the
number of requests for information or guidance from industry stakeholders. Implementation risks,
such as not having key system changes and resources in place by the time the new legislation
commences, are being mitigated by the Department through detailed implementation planning.
Based on the CBA, a reduction in regulatory burden of 1% (break-even point) is considered very
likely. There may be some risk that the understanding of legislative changes and related
administrative practices by stakeholders could take longer than anticipated. This could be addressed
through additional communication and education. The department will also build on its ongoing
engagement with RDCs, AHA, PHA, IRBs and collection agents to provide support in understanding
the new legislation.
Department of Agriculture, Fisheries and Forestry
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Modernising the agricultural levies legislation
7 Evaluation of chosen option
The department monitors and evaluates elements of the levy system on an ongoing basis. Key
performance and operational data are collected, and have been published by the department
through reports to levies stakeholders. This data will allow the department to track cost savings in
the form of reduced time and effort spent by the department in administering the new legislation. It
will also provide an indication of cost savings for industry stakeholders.
The department will continue to engage with stakeholders including in relation to the collection and
disbursement of levies through levies administration activities. In addition, the department interacts
with LRBs and industry bodies regularly in relation to policy issues. These ongoing interactions will
provide opportunities to seek feedback from stakeholders in relation to the new legislative
framework.
Existing compliance programs provide opportunities to ask for stakeholder feedback on the new
legislative framework and guidance material. These include regular and targeted compliance
programs with levy payers and collection agents as well as a liaison program with IRBs. In recognition
of the new regulatory powers being incorporated in the legislative framework (compared with the
existing legislation), the department will monitor and assess any changes in compliance rates.
Similarly, existing interactions with RDCs, such as annual performance meetings and independent
performance reviews, will allow the department to seek feedback on the new legislation.
Any future amendments to the legislative framework, including to establish or amend levies, will
provide opportunities to reflect on the new legislative framework and its benefits in supporting the
levy system and responding to industry needs efficiently. In addition, the department could consider
undertaking a comprehensive evaluation three to five years after the commencement of the new
legislative framework. The legislative instruments under the framework will sunset after 10 years,
meaning the department will also potentially have the opportunity in advance of that date to do
another extensive review of the framework and assess its effectiveness.
Table 5 provides a preliminary high-level evaluation plan for the modernising of the agricultural
levies legislation. As implementation planning progresses, a more comprehensive monitoring and
evaluation framework may be established.
Table 5: Preliminary evaluation plan
Key metrics Outcomes
Short-term Medium-term Long-term
Qualitative - stakeholder - Collate feedback received - Collate feedback received - Collate feedback
feedback from various stakeholders from stakeholders through received from
throughout implementation regular interactions (e.g. stakeholders through
Quantitative - number of
phase (collection agents, IRBs compliance program, RDC regular interactions (e.g.
calls and emails and time performance meetings) compliance program, RDC
and RDCs) (1 year)
taken to respond (ongoing) performance meetings)
Quantity and complexity (ongoing)
of legal advice sought in
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relation to the new - Reviews of and adjustments - Regular internal and - Regular internal and
framework to guidance material and external reporting on key external reporting on key
communication (1 year) data collected (ongoing) data collected (ongoing)
Effort required for
legislative amendments - Regular internal and external - Department to consider - Department to consider
reporting on key data collected developing an evaluation review of legislative
Compliance rate (ongoing) report to assess whether framework ahead of the
the intended outcomes of sunsetting of legislative
the new legislation have instruments (10 years)
been achieved (3-5 years)
Department of Agriculture, Fisheries and Forestry
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Appendix A: Current levies legislation
Department of Agriculture, Fisheries and Forestry
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Appendix B: Cost-benefit analysis
report
The Department of Agriculture, Fisheries and Forestry commissioned Deloitte Access Economics to develop the
cost-benefit analysis. The analysis below represents the views and assessment by Deloitte Access Economics.
3 Cost benefit analysis of options
This chapter analyses the costs and benefits of the proposed options, with a focus on the reduction
in regulatory burden imposed on levy stakeholders.
3.1 Approach to options analysis
This chapter analyses the potential impacts (costs and benefits) of Option 2 to the agricultural levies
legislation on industry stakeholders and the Government. The proposed changes have been assessed
using Cost-Benefit Analysis (CBA), which provides a robust, structured and transparent approach to
balancing the different impacts, modelling the potential economic costs and benefits where possible.
This CBA also draws upon regulatory burden measurement (RBM) methodology to estimate the value
of benefits in the form of improvements in regulatory burden (section 3.2.1).
This chapter first defines the different costs and benefits quantified and monetised in this CBA and
notes the other broader qualitative benefits that the reforms are intended to support (but which are
not modelled in this CBA). This chapter then outlines the approach taken to quantify the costs for
each stakeholder and details each of the specific inputs, assumptions and calculations used to do so.
The discussion and illustrative modelling of costs and benefits outlined in this CBA report is based on
publicly available data, as well as information provided by, and in consultation with, the department.
To deal with uncertainty regarding the effectiveness of the proposed changes in reducing regulatory
burden, this chapter will then present an illustrative estimate of the feasible benefits which would
accumulate to industry if the proposed changes were to break-even and be worthwhile
implementing.
3.1.1 Quantifiable costs and benefits
In this chapter, the costs and benefits have been broken down by stakeholder group to illustrate the
different types and varying degrees of impact felt by industry stakeholders (levy payers, collection
agents, IRBs and LRBs) and by government as a result of Option 2.
The costs to industry have been quantified based on a series of estimates relating to the likely
transition costs imposed by Option 2, relative to Option 1 (the status quo). These are one-off costs,
primarily associated with the time and effort required to understand the proposed changes under
Department of Agriculture, Fisheries and Forestry
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Option 2 to the levies legislation. An estimation of the costs imposed on government is also provided
based on the time and effort expected to communicate the changes to industry, to develop and
implement new systems, processes and guidance material, and to undertake additional staff training.
The quantifiable benefits in this analysis take the form of cost savings (in terms of time and effort)
that are expected by to accrue to industry stakeholders as a result of a reduction in regulatory
burden. These benefits have been measured and monetised using RBM methodology in line with the
Australian Government Guide to Policy Impact Analysis, which estimates the incremental reduction in
costs between the status quo and the scenario in which the proposed changes under Option 2 are
implemented. Similarly, the quantifiable benefits to government in this analysis include the
anticipated cost savings (in terms of time and effort) associated with administering a levies system
that is easier to administer (largely due to less time required to help stakeholders understand the
system) and the ability to adopt a more proportionate, risk-based approach to compliance activities.
This chapter also notes that the department expects there may be direct financial costs and benefits
as a result of changes which remove certain limits on the allocation of matched funding to RDCs.
These may potentially accrue in the form of increased government funding provided to RDCs
(representing a cost to government and a benefit to industry). However, in consultation with OIA and
the department, these financial benefits have not been included in the economy-wide CBA in this
report, as they represent a direct transfer from government to industry and therefore do not have a
net impact on the economy-wide impacts. Deloitte Access Economics understands that the
department's analysis of these potential financial benefits to RDCs (and corresponding costs to
government) is ongoing.
3.1.2 Unquantifiable benefits
Based on advice from the department, Deloitte Access Economics understands that relative to
Option 1, the proposed changes under Option 2 are also anticipated to deliver a wider range of
benefits that are not quantified or monetised in the CBA due to their intangibility. These benefits are
primarily expected to increase the effectiveness of the levies legislation in achieving its regulatory
objectives. While not quantified, these benefits are still highly valuable and are a key driver of the
proposed reforms. These benefits include, for example:
• improved flexibility and responsiveness of the levies legislative framework to the changing
needs of Australia's agricultural industries, particularly through easier and faster legislative
amendments
• improvements in industry confidence through increased consistency, transparency, or
predictability of the legislative framework. For example, the earlier determination of the GVP
limit would provide RDCs with increased investment certainty, as they would know what
their matching funding limit is at the beginning of the financial year
• more proportionate and targeted compliance activities through the adoption of civil penalty,
infringement notice and injunctions provisions of the Regulatory Powers (Standard
Provisions) Act 2014. This would significantly improve the department's compliance
programs so that entrenched low level non-compliance is targeted and criminal penalties
then only used for the most serious offending conduct.
Department of Agriculture, Fisheries and Forestry
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3.2 Method and assumptions
3.2.1 CBA methodology
The analysis undertaken in this CBA measures the impact of the proposed changes under Option 2
against the status quo - a scenario where the agricultural levies legislation remains unchanged and
continues to operate the way it does currently (Chapter 2). Where possible, this CBA attempts to
value the gains and losses from the regulatory changes in monetary terms. The costs and benefits of
the proposed changes under Option 2, relative to the status quo, will be directly compared to
determine whether the impact on industry is positive and therefore, whether the package of reforms
to the agricultural levies legislation is worthwhile.
The impacts of the proposed changes under Option 2 are also assessed using the Benefit to Cost
Ratio (BCR). The BCR refers to scale of quantified benefits relative to quantified costs, expressed in
the form of a ratio (where benefits are divided by costs). A BCR greater than one indicates that the
benefits related to the proposed changes under Option 2 are greater than the costs (or, for every $1
of cost incurred by government and/or industry, a benefit of greater than $1 is achieved). As such,
any BCR that is equal to or greater than one can be expected to deliver a positive impact on
stakeholders and therefore, can be considered be worth pursuing.
As consistent with the Australian Government policy analysis guidelines, the costs and benefits have
been modelled in net-present-value (NPV) over a period of 10 years3. Calculating the impact in NPV
terms, as is best practice, ensures that the estimates of benefits and costs are appropriately
discounted at a real rate of 7%4. As required by the Australian Government, sensitivity analysis is
undertaken on this discount rate. Monetary figures reported are in terms of their current dollar value
(the 'real' value)5.
3.2.1.1 Monetising costs
The monetised costs associated with proposed changes under Option 2 are one-off transition costs
to industry and government stakeholders. For industry (meaning levy payers, collection agents, IRBs
and LRBs) this includes the one-off costs in terms of time and effort required to understand the
changes to the legislation. This was calculated using estimates of the time taken for each stakeholder
to read online guidance material, to call the department or an IRB for further clarity, or to have a
legal expert review the changes and provide advice.
3
Department of the Prime Minister and Cabinet Office of Best Practice Regulation, Guidance Note: Cost-benefit
Analysis (March 2020)
4
Ibid.
5
Ibid.
Department of Agriculture, Fisheries and Forestry
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To monetise costs for industry, the standard labour rate of approximately $45.5 per hour has been
used in line with the Regulatory Burden Measurement Framework6. This default hourly cost is based
on average weekly earnings but adjusted to include income tax. This provides an economy-wide
value of employee time. The standard labour rate has then been multiplied by a factor of 1.75, as is
consistent with relevant guidelines, to account for on-costs and overheads7. This results in a scaled-
up rate of $79.63 per hour for work-related labour costs.
Figure 3.1 Method for monetising costs to industry
Source: Deloitte Access Economics
Note: Some industry stakeholder groups may seek external legal advice rather than spending their own time understanding
the changes. This has been reflected in the model (see section 3.3.3)
For government, administrative costs are driven by the cost to implement the proposed changes
under Option 2 (Figure 3.2). This was calculated based on estimates of the approximate costs
associated with staff training, the time and effort associated with making the required updates to
internal processes, systems and guidance material as well as any educative activities to explain the
changes to industry. These estimates were informed by consultation with the department. The
specific inputs and assumptions used to calculate the administrative costs in terms of time have been
outlined in section 3.4. The number of staff required for each of these activities was also considered.
These estimates were then multiplied by government administrative costs converted to an hourly
rate of $200 (including on-costs and overheads) to obtain costs in monetary terms8.
Figure 3.2 Method for monetising administrative costs
Source: Deloitte Access Economics
6
Department of the Prime Minister and Cabinet Office of Best Practice Regulation, Regulatory Burden
Measurement Framework (March 2020)
7
Ibid.
8
Department of Agriculture, Forestry and Fisheries
Department of Agriculture, Fisheries and Forestry
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3.2.1.2 Monetising benefits and addressing uncertainty
Based on consultation with the department, the proposed changes under Option 2 are expected to
decrease the time and effort associated with undertaking the activities required to understand,
comply with or administer the agricultural levies legislation. This makes interactions with the
legislative framework more efficient and creates savings for industry and government (for example,
the value of time and effort which is no longer required to be exerted as a result of the proposed
changes under Option 2). Therefore, the monetised benefits associated with the proposed changes
under Option 2 take the form of avoided costs which result from the expected reduction in
regulatory burden.
For industry, the proposed changes under Option 2 are expected to result in a reduction in the time
and effort required to understand and comply with their regulatory obligations on an ongoing basis.
For government, there is an expected reduction in the ongoing costs (in terms of time and effort)
required to administer the scheme and enforce compliance.
RBM methodology has been applied within this CBA to quantify and monetise these efficiency gains.
RBM methodology requires a direct comparison between the expected level of regulatory costs
imposed on industry and government under the proposed changes under Option 2 and the status
quo (Figure 3.3).
Figure 3.3 Regulatory burden reduction methodology
Source: Deloitte Access Economics
As is consistent with the Regulatory Burden Measurement Framework, the first step taken in this CBA
to model the potential benefits is to model any regulatory costs already associated with the status
Department of Agriculture, Fisheries and Forestry
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quo (a scenario where no changes are made to the current legislative framework)9. Estimates made
in relation to the cost of time and effort currently exerted by industry in understanding and
complying with the legislative framework have been informed by publicly available information and
financial reports10. All assumptions and inputs of this nature are outlined in further detail in section
3.3. For government, the cost to administer the legislative framework under the status quo is
informed by the financial breakdown outlined in the most recent Report to Levies Stakeholders11.
This forms a basis to which the regulatory costs under the proposed changes under Option 2 will be
compared.
In the absence of industry stakeholder consultation, the regulatory costs under proposed changes
under Option 2 have been calculated using an assumption of effectiveness regarding the proposed
changes under Option 2. This effectiveness assumption represents a percentage decrease in the
time, effort and/or quantity of regulatory activity required by industry and government to
understand or administer the legislation that is directly attributable to the proposed package of
reforms. As such, there is a degree of uncertainty regarding the extent to which the proposed
changes under Option 2 will reduce regulatory burden for both industry and government. To address
this uncertainty, a break-even approach has been taken in this CBA to identify the percentage
reduction in regulatory burden required for the costs and benefits to be equal. The break-even point
occurs where the BCR is equal to one. The CBA discusses whether this break-even point is achievable
and likely, and if the proposed changes under Option 2 are worthwhile.
As mentioned above, it is also important to note that the monetised benefits only represent a
portion of the total benefits expected by the department to result from the proposed changes under
Option 2. A range of benefits are unable to be quantified including (but not limited to) increased
clarity regarding regulatory obligations and increased responsiveness of the legislative framework to
emerging industry challenges and opportunity for investment that is better aligned with industry
priorities. The department expects there to be broader benefits from the modernisation and
improved regulatory effectiveness of the legislative framework. While these benefits are not
quantified in this CBA, they are of importance and in many cases are key drivers of the proposed
changes under Option 2.
3.3 Costs to industry
Based on consultation with the department, the proposed legislative amendments are expected to
impose one-off transition costs in the first year of implementation. Here, the main cost to industry
(that is, levy payers, collection agents, IRBs and LRBs) is the time and effort required to understand
the changes to the levies legislative framework. The specific inputs and assumptions used to
9
The Department of the Prime Minister and Cabinet, Regulatory Burden Measurement Framework (March
2020)
10
The Department of Agriculture, Water and the Environment, Report to levies stakeholders 2018-19 (May
2020)
11
The Department of Agriculture, Water and the Environment, Report to levies stakeholders 2018-19 (May
2020)
Department of Agriculture, Fisheries and Forestry
34
calculate these costs for each levy stakeholder group are described in the relevant subsections
below.
In total, the cost to industry (compared to the status quo) is estimated to be approximately $570,000
(NPV over 10 years) or approximately $61,000 per year (on average) (Table 3.1). Given the nature of
Option 2, all of the costs to industry are borne in the first year as a result of the one-off transitional
activities.
Table 3.1 Summary of costs to industry stakeholders
Industry stakeholder Total cost over 10 years (NPV) Average cost per year
Levy payers/agents $461,000 $49,000
IRBs $43,000 $5,000
LRBs $66,000 $7,000
Total $570,000 $61,000
Source: Deloitte Access Economics
3.3.1 Levy payers and collection agents
For the purpose of this analysis, levy payers and collection agents have been grouped together as
they have similar legislative obligations to pay levies and submit returns. In reality, the department
advises that it is rare that levy payers submit their own returns, and, in most cases, collection agents
submit returns on behalf of the levy payers.
It is assumed that both levy payers and collection agents will spend time to understand the changes.
Due to a lack of data, there is uncertainty regarding the number of levy payers who lodge their own
returns and who would therefore be incentivised to understand the proposed changes under Option
2 when they are implemented. In the absence of this information, a conservative assumption has
been made in this CBA that 5% of total levy payers (5,000 out of 100,000) will seek to understand the
changes - whether they lodge a return or not - based on their involvement or broader interest in the
agricultural levies legislative framework. Given their passive role in the system, subject matter
experts within the department suggest that levy payers would be more likely to learn about the
changes using online guidance material and that only a small proportion would call the department
or an industry body to do so. The calculation used to estimate the cost to levy payers is outlined in
Figure 3.4 below.
Figure 3.4 Cost to levy payers calculation
Department of Agriculture, Fisheries and Forestry
35
Source: Deloitte Access Economics
Relative to levy payers, the analysis assumes that collection agents are more likely to seek to
understand the changes because the legislative framework is integral to their everyday activities. As
such, it is assumed that 100% of total collection agents (7,386) will spend time to understand the
proposed changes under Option 2. It is also assumed that collection agents are more likely than levy
payers to spend time speaking (over the phone) to the department than to industry representatives.
This is reflected in the model, where it is assumed that 50% of collection agents would be likely to
speak to the department to understand the proposed changes under Option 2 while only 5% of
collection agents would be likely to reach out to IRBs. It is assumed that the remaining 45% of
collection agents would be likely to read online guidance to understand the proposed changes under
Option 2. The calculation used to estimate the cost to levy payers is outlined in Figure 3.5 below. The
specific inputs used to calculate the costs to both levy payers and collection agents are summarised
in Table 3.2.
Figure 3.5 Cost to collection agents calculation
Source: Deloitte Access Economics
Table 3.2 Modelling inputs used to estimate costs to levy payers and collection agents
Input Value
Levy payers (regardless of whether or not they lodge a return)
Total number of levy payers 100,000
Department of Agriculture, Fisheries and Forestry
36
Number of levy payers who will seek to understand the changes to legislation (5% of all levy payers) 5,000
Number of levy payers who will contact industry representatives to understand the changes 500 (10%)
Number of levy payers who will contact the department to understand the changes 500 (10%)
Number of levy payers who will read online guidance material to understand the changes 4,000 (80%)
Time taken
Time taken by levy payers to understand the new legislation by reading online guidance material 30 minutes
Time taken by levy payers to understand the new legislation by calling the department or an 30 minutes
industry representative body
Collection agents
Total number of collection agents 7,386
Number of collection agents who will contact industry representatives to understand the changes 369 (5%)
Number of collection agents who will contact the department to understand the changes 3,693 (50%)
Number of collection agents who will read online guidance material to understand the changes 3,324 (45%)
Time taken
Time taken by collection agents to understand the new legislation by researching and reading 30 minutes
online guidance material
Time taken by collection agents to understand the new legislation by calling the department or an 30 minutes
industry representative body
Source: DAFF analysis and input from subject-matter experts, including previous stakeholder engagement undertaken as
part of the reform program.
Under the modelled parameters above, and relative to the status quo, the transition costs to levy
payers and collection agents associated with the proposed changes under Option 2 amount to
approximately $461,000 (in NPV over 10 years) or approximately $49,000 per year (on average). It is
important to note that, given that all costs to industry are expected to be one-off transition costs
associated with the time and effort taken to understand the proposed changes under Option 2, costs
will only be imposed in the first year.
3.3.2 Industry representative bodies
Under the proposed changes under Option 2, IRBs are expected to spend time and effort to
understand the changes. As with collection agents, given the active involvement of IRBs in the levies
system, the analysis assumes that all IRBs will face the one-off transition costs. In addition, this CBA
assumes that IRBs will also be required to explain the changes as necessary to collection agents and
levy payers.
The proposed changes under Option 2 are not expected by the department to impose any additional
ongoing costs on IRBs over and above their current obligations under the status quo. The calculation
of costs is outlined in Figure 3.6 below and the specific inputs used to calculate the costs to IRBs are
summarised in Table 3.3.
Department of Agriculture, Fisheries and Forestry
37
Figure 3.6 Cost to IRBs calculation
Source: Deloitte Access Economics
Table 3.3 Modelling inputs used to estimate costs to IRBs
Input Value
IRBs
Number of IRBs 70
Number of IRBs that will seek to understand changes to legislation 70 (100%)
Number of IRBs that will call the department to understand the proposed changes (10%) 7 (10%)
Time taken to understand changes
Average time taken by IRBs to understand changes to legislation 2 hours
Time taken by IRBs to understand the new legislation by calling the department (this is in addition to 30 minutes
the 2 hours above)
Time taken to explain changes
Time required of IRBs to explain the changes to legislation to collection agents and levy payers 30 minutes
Number of calls to IRBs from collection agents or levy payers 869
Department of Agriculture, Fisheries and Forestry
38
Source: DAFF analysis and input from subject-matter experts, including previous stakeholder engagement undertaken as
part of the reform program.
Relative to the status quo, and under the modelled parameters, the transition costs to IRBs
associated with the proposed changes under Option 2 amount to approximately $43,000 (in NPV
over 10 years), all of which are imposed in the first year following the introduction of the proposed
changes under Option 2.
3.3.3 Levy recipient bodies
The department expects that out of all LRBs (18) only RDCs (15) will seek to understand the proposed
changes under Option 2. The department advises that this is because for other types of LRBs (Animal
Health Australia (AHA), Plant Health Australia (PHA) and National Residue Survey (NRS)) there will
only be minor legislative change. As such, the department expects the proposed changes under
Option 2 to bear no impact on these LRBs.
It is assumed that all RDCs (15) will spend time to understand the proposed changes under Option 2
but will seek to do so in different ways. As such, the total cost to LRBs is the sum of any time spent by
RDC staff to understand the proposed changes under Option 2 and the cost for some RDCs to engage
external legal professionals to provide advice (Figure 3.7). Specific inputs and assumptions made to
calculate these costs have been outlined in Table 3.4.
Figure 3.7 Calculation of the total cost to LRBs associated with the proposed changes under
Option 2
Source: Deloitte Access Economics
The department expects that all RDCs will contact the department (via phone call or email), and this
is expected to take approximately 3 hours in total for each RDC. In addition to this, approximately
75% of RDCs (11) will spend an additional 40 hours of staff time and effort to understand the
changes. Here, an hour of an RDC staff member's time has been valued at the standard hourly wage
rate of approximately $45.512. This has been multiplied by a factor of 1.75 to account for on costs
and overheads. This results in a scaled-up rate of $79.63 per hour, as consistent with the Regulatory
Burden Measurement Framework13. The equation used to calculate the cost of time spent by RDC
staff to understand the proposed changes under Option 2 is laid out in Figure 3.8.
Figure 3.8 Cost of time for LRBs calculation
12
The Department of the Prime Minister and Cabinet, Regulatory Burden Measurement Framework (March
2020)
13
The Department of the Prime Minister and Cabinet, Regulatory Burden Measurement Framework (March
2020)
Department of Agriculture, Fisheries and Forestry
39
Source: Deloitte Access Economics
Based on advice from the department, it is also expected that some LRBs will engage external legal
professionals to provide advice on the proposed changes under Option 2. For the purposes of this
analysis, it is assumed that approximately 25% of RDCs (4 RDCs) seek external advice from legal
professionals.
This CBA assumes that legal professionals would require less time (only 20 hours in comparison to 40
hours for internal RDC staff) but would charge RDCs more per hour (with the average hourly cost to
RDCs of a legal professional's time being $400 per hour). Given the uncertainty regarding the various
ways that external legal consultants may undertake and charge for this work, the average cost of
engaging legal professionals by the hour has been determined by taking the midpoint of a range of
hourly charge-out rates for lawyers in Australia (based on employee level)14. The calculation of costs
to LRBs for external legal advice is set out in Figure 3.9.
Figure 3.9 Cost to RDCs of engaging legal professionals
Source: Deloitte Access Economics
Some LRBs may be required to exert additional administrative effort to ensure that their internal
processes are in line with updated legislative requirements. For example, the proposed changes
under Option 2 may require some RDCs to update some elements of their processes for preparing
matching funding claims. However, in the absence of consultation with industry stakeholders, and
given the uncertainty and variation in terms of both the extent of effort that may be required as well
as the number of LRBs required to make change, the level of administrative effort has not been
monetised in this CBA. It is therefore noted that costs may vary between LRBs in the first year and, in
some cases, be larger than the monetised estimates in this CBA. However, the department considers
14
Legal vision, How Much Does a Lawyer Cost and What are Their Hourly Rates? (September 2021), Lawpath,
How Much Does a Lawyer Cost (2022 Update) (January 2021)
Department of Agriculture, Fisheries and Forestry
40
this impact is likely to be relatively small as, in general, the proposed changes under Option 2 are
expected to reduce the overall administrative burden for LRBs.
Table 3.4 Modelling inputs used to estimate costs to LRBs
Input Value
LRBs
Number of LRBs 18
Number of LRBs that are RDCs 15
Number of LRBs that are not RDCs (AHA, PHA and NRS) 3
Number of LRBs who will seek to understand the proposed changes to legislation (RDCs only) 15*
Number of LRBs who will seek to understand the changes internally (75% of RDCs) 11
Number of LRBs who will seek external legal advice (25% of RDCs) 4
Time taken to understand changes
Time taken by internal RDC staff to understand changes to legislation 40 hours
Time taken by external legal professionals to provide advice on changes to legislation 20 hours
Time taken by other types of LRB staff to understand changes to legislation 20 hours
Time taken by LRBs to contact the department for information (in addition to the time above) 3 hours
Value/cost of time
Value of LRB time (including on-costs and overheads) $79.63 per hour
Cost of legal professionals time (including on-costs and overheads) $400 per hour
Source: DAFF analysis and input from subject-matter experts, including previous stakeholder engagement undertaken as
part of the reform program.
Note: *It is assumed that all LRBs who seek to understand the changes are RDCs given that the proposed changes relating
to matched funding are more likely to impact RDCs
Using the inputs above, the total costs to LRBs associated with the proposed changes under Option 2
are estimated to be approximately $66,000 (in NPV over 10 years) all of which are imposed in the
first year following the introduction of the proposed changes under Option 2. Of this, the cost
associated with the time taken by LRB staff to understand the changes is estimated to be
approximately $36,000 (in NPV over 10 years). The cost associated with engaging external legal
professions by some RDCs is approximately $30,000 (in NPV over 10 years). The proposed changes
under Option 2 are not expected by the department to impose any additional ongoing costs on LRBs
over and above their current obligations under the status quo.
3.4 Costs to government
Relative to the status quo, the proposed changes under Option 2 are expected to impose one-off
costs on the department associated with the implementation and administration of the new
Department of Agriculture, Fisheries and Forestry
41
legislative framework. In initial implementation, the department would be required to communicate
the legislative changes to levy payers, collection agents, IRBs, and LRBs. This analysis assumes that
the department would educate industry through the development of guidance material and by
responding to additional calls from levy payers and collection agents.
In administering the new proposed legislative framework, the department would also invest
additional time and effort to update or modernise any internal processes and systems (relating to the
collection and disbursement of levy funding) as well as provide internal education and training to
staff within the finance and compliance teams. These costs have been monetised by multiplying
these estimates of time by the hourly rate for government administrative costs (this has been
advised by the department to be $200, including overheads and on-costs). The calculation of costs to
the department is set out in Figure 3.10.
Figure 3.10 Calculation of administrative costs to the department
Source: Deloitte Access Economics
Table 3.5 Modelling inputs used to estimate costs to the department
Input Value
Cost to explain changes
Time spent by departmental staff explaining changes to levy payers, collection agents and IRBs 30 minutes
(per call)
Time spent by departmental staff explaining changes to LRBs (in total per LRB) 3 hours
Number of calls to levy payers, collection agents and IRBs (total) 4200
Number of calls to LRBs 18
Cost to update processes, systems and guidance material
Time spent to update processes 3 months
Time spent to update systems 3 months
Time spent to update guidance material 3 months
Number of fulltime staff required to update processes, systems and guidance material 3
Cost to undertake training
Time spent undertaking training 1 day (8 hours)
Number of staff required to undertake training 29
Department of Agriculture, Fisheries and Forestry
42
Source: DAFF analysis and input from subject-matter experts, including previous stakeholder engagement undertaken as
part of the reform program.
In total, the proposed changes under Option 2 are expected to impose costs of approximately $1.25
million on the department (in NPV over 10 years). All of these costs will be imposed in the first year
of implementation.
3.5 Total costs
Table 3.6 summarises the average annual regulatory costs to key stakeholders posed by the different
reform options, from business as usual. The average costs noted in Table 3.6 reflect the average costs
to business over a 10-year period which comprise only one-off transaction costs in the first year of
$570,000, and no costs every year thereafter. No changes in regulatory costs are anticipated to
community organisations or individuals.
Table 3.6: Regulatory Burden Estimates table (change in costs on average each year)
Change in costs ($ million) Business Community Individuals Total change in costs
organisations
Total, by sector (Option 1: status $0 $0 $0 $0
quo)
Total, by sector (Option 2: $61,000 $0 $0 $61,000
streamlining legislation)
Source: Deloitte Access Economics
3.6 Break-even analysis
Given uncertainty regarding the effectiveness of the proposed changes under Option 2 in reducing
regulatory burden, a break-even approach has been applied in this CBA to identify the scale of
monetised benefit required to offset the one-off direct cost impacts associated with the proposed
changes under Option 2. As mentioned in section 3.2.1.2, this approach estimates the benefits to
each of the industry stakeholders at an intervention effectiveness rate where total economy-wide
benefits are equal to economy-wide costs. As such, this CBA should be regarded as a test of whether
the benefits of the proposed changes under Option 2 are likely to exceed the costs, rather than a
point estimate of the specific impacts.
The intervention effectiveness rate is used as an input in the CBA model to monetise benefits by
reducing the duration and quantity of effort currently exerted in the status quo. The specific inputs
impacted by the degree of effectiveness include:
• the time spent on an ongoing basis to understand or explain the legislative framework
• the quantity of industry stakeholders requiring help to understand their obligations on an
ongoing basis
• the number of incorrect returns and/or payments by industry
Department of Agriculture, Fisheries and Forestry
43
• the time taken by LRBs (RDCs only) to ensure compliance with spending requirements and to
plan investment of funding
• the cost associated with administering the legislation, including compliance.
The results of this CBA suggest that the monetised economy-wide benefits and costs associated with
the proposed reforms will break-even if the changes are effective in reducing regulatory burden by as
little as 1% (approximately). This would involve a 1% reduction in the quantity of compliance and
administrative activities and/or a 1% reduction in the average cost of those activities. This means
that at any level of regulatory burden reduction over and above 1%, the economy-wide benefits will
outweigh the economy-wide costs and the proposed changes under Option 2 are worth pursuing.
Based on in-house regulatory expertise and advice provided by the department, this break-even
point is considered both feasible and likely.
The proposed changes under Option 2 will simplify the legislative framework through consolidation
and the use of modern drafting standards. Therefore, the scale of improvement in regulatory burden
required to break-even (1%) is considered relatively minor. For example, in the case of calls made by
industry to the department, a 1% reduction in call volume would comprise just 36 calls out of 4,202
per year.
Table 3.7 Economy-wide break-even analysis (at an effectiveness rate of 1%)
Benefits Costs BCR
Economy-wide $1,823,000 $1,823,000 1
Industry $1,591,000 $570,000 2.79
Government $232,000 $1,253,000 0.19
Source: Deloitte Access Economics
It is noted that this is the break-even point, or level of regulatory burden reduction, required for
economy-wide benefits to equal economy-wide costs only. At this break-even point, the benefits to
industry are approximately triple the value of costs, however, the costs and benefits to government
do not break-even. Therefore, the costs and benefits for industry and for government are anticipated
to break-even at different effectiveness rates (see Table 3.8 and Table 3.9).
The break-even point for industry occurs at an intervention effectiveness rate of approximately 0.3%.
At this rate, both the government and economy-wide costs and benefits do not break-even, with
BCRs of less than one. Again, given the negligible scale of improvement required to break-even, this
break-even point is considered feasible and highly likely.
Table 3.8 Industry break-even analysis (at an effectiveness rate of 0.3%)
Benefits Costs BCR
Economy-wide $653,000 $1,823,000 0.36
Industry $570,000 $570,000 1
Government $83,000 $1,253,000 0.07
Department of Agriculture, Fisheries and Forestry
44
Source: Deloitte Access Economics
The break-even point for government occurs at an intervention effectiveness rate of approximately
4.5%. This break-even point is higher than for the economy as a whole and for industry given that the
intent of the reforms was primarily to deliver benefits to industry.
At this rate, both the industry and economy-wide benefits far outweigh the costs of the proposed
changes under Option 2. At this break-even point, industry gains approximately $15 in avoided costs
per every $1 of cost incurred while the economy as a whole would yield approximately $5 in avoided
costs for every $1 of cost incurred.
Table 3.9 Government break-even analysis (at an effectiveness rate of 0.3%)
Benefits Costs BCR
Economy-wide $9,759,000 $1,823,000 5.35
Industry $8,505,000 $570,000 14.93
Government $1,253,000 $1,253,000 1
Source: Deloitte Access Economics
3.7 Benefits to industry
The department expects the proposed changes under Option 2 to minimise barriers to interacting
with the agricultural levies legislation by reducing unnecessary complexity and increasing flexibility.
In doing so, this option is likely to reduce the level of regulatory burden imposed on industry in their
ongoing efforts to understand and comply with their legal obligations. As such, the benefits
quantified in this section take the form of avoided costs or in other words, the value to industry of
time and effort saved.
This section provides an illustrative estimate of the feasible benefits which would accumulate to
industry if the proposed changes under Option 2 were 1% effective (the economy-wide break-even
point) in reducing regulatory burden. This relates to a 1% reduction in the average cost of compliance
(in terms of time and effort) and/or a 1% reduction in the frequency (quantity) of that effort.
Table 3.10 Summary of benefits to industry stakeholders
Industry stakeholder Total benefit over 10 years (NPV) Average benefit per year
Levy payers/agents $1,571,000 $224,000
IRBs $3,000 $500
LRBs $17,000 $2,000
Total $1,591,000 $227,000
Source: Deloitte Access Economics
Department of Agriculture, Fisheries and Forestry
45
The department also expects that the proposed changes under Option 2 may deliver a wide range of
benefits that have not been quantified or monetised in this CBA. These benefits are primarily
expected to increase the effectiveness of the levies legislation in achieving its regulatory objectives.
While these benefits cannot be quantified, they are still highly valuable and are a key driver of the
proposed reforms. Benefits of this nature include, for example:
• Improved flexibility and responsiveness of the levies legislative framework to the changing
needs of Australia's agricultural industries, particularly through easier and faster legislative
amendments.
• Improvements in industry confidence through increased consistency, transparency, or
predictability of the legislative framework. For example, the earlier determination of the GVP
limit would provide RDCs with increased investment certainty, as they would know what
their GVP limit on matching funding is at the beginning of the financial year.
• More proportionate and targeted compliance activities through the adoption of civil penalty,
infringement notice and injunctions provisions of the Regulatory Powers (Standard
Provisions) Act 2014. This would significantly improve the department's compliance
programs so that entrenched low level non-compliance is targeted and criminal penalties are
then only used for the most serious offending conduct.
3.7.1 Levy payers and collection agents
Relative to the status quo, the proposed changes under Option 2 would reduce both the size and
complexity of the agricultural levies legislation. This would improve the understanding of both levy
payers and collection agents in relation to their legislative obligations to pay levies and submit
returns.
Therefore, based on consultation with the department, the proposed changes under Option 2 are
expected to produce ongoing benefits, in the form of avoided costs, for levy payers and collection
agents by lowering both:
• the time and effort taken by each levy payer or collection agent to understand the details of
their legislative requirements on an ongoing basis (the average cost). This includes
communication over the phone with the department or an IRB or reading online guidance
material.
• the number of levy payers and/or collection agents requiring clarification (the quantity).
To monetise these benefits, the time currently undertaken by levy payers and collection agents to
understand and ask questions regarding their obligations on an ongoing basis under the status quo
was estimated first. These estimates were made using publicly available data on the number of levy
payers and collection agents who seek additional information each year (either over the phone or
through online guidance material) and the average time taken to do so (see Table 3.11)15.
15
The Department of Agriculture, Water and the Environment, Report to levies stakeholders 2018-19 (May
2020)
Department of Agriculture, Fisheries and Forestry
46
Given the uncertainty regarding the effectiveness of the proposed changes under Option 2 in
reducing regulatory burden, a break-even approach has been applied in this CBA to monetise any
potential benefits. As mentioned in section 3.2.1.2 and above, this approach estimates the benefits
to each of the industry stakeholders at an intervention effectiveness rate where total economy-wide
benefits are equal to economy-wide costs. For levy payers and collection agents, the intervention
effectiveness impacts modelled levels of regulatory burden by:
• reducing the time required to understand the legislation on an ongoing basis by 1% (the
break-even effectiveness rate) relative to the status quo (see Table 3.11)
• reducing the quantity of levy payers and collection agents requiring ongoing assistance to
understand the legislation by 1% (the break-even effectiveness rate) relative to the status
quo (see Table 3.11).
Table 3.11 Regulatory burden reduction for levy payers and agents, per year
Effort under the status quo per Effort under the proposed Impact of proposed changes
year changes per year per year
Regulatory Time Quantity Time Quantity Time Quantity
burden
activity
Cost to 5 minutes per 4202 calls 4.95 minutes 4167 calls ↓0.04 ↓36 calls
industry spent call per call minutes (2
on the phone seconds)
to the
Department
Cost to 5 minutes per 4202 calls 4.95 minutes 4167 calls ↓0.04 ↓36 calls
industry spent call per call minutes (2
on the phone seconds)
to IRBs
Cost to 116 minutes 87,576 web- 115 minutes 86,852 web- ↓ 0.97 ↓724 web-
industry spent per page page visitors per page page visitors minutes (58 page visitors
reading online seconds)
guidance
materials
Source: Deloitte Access Economics based on Report to Levies Stakeholders 2018-2019 (May 2020)
At the break-even point, and relative to the status quo, the proposed changes under Option 2 would
be expected to yield approximately $1.57 million to levy payers and collection agents (NPV over 10
years) or approximately $224,000 per year (on average). These monetised benefits represent the
ongoing value of avoided costs to levy payers and collection agents associated with a reduction in
annual regulatory burden.
3.7.2 Industry representative bodies
The proposed changes under Option 2 would also be expected by the department to reduce
regulatory burden for IRBs, relative to the status quo, and therefore yield ongoing benefits in the
form of avoided costs. By simplifying the agricultural levies legislation, relative to the status quo, the
Department of Agriculture, Fisheries and Forestry
47
proposed changes under Option 2 would reduce the ongoing time required by IRBs to answer
questions from industry regarding the legislative framework and their obligations under it. It would
also be expected to reduce the number of calls from industry received by IRBs each year.
To monetise these benefits, estimates in terms of the number of calls and the time taken on each of
these calls were made relative to current conditions under the status quo. These estimates were
informed by publicly available data and assumptions regarding the proportion of levy payers and
agents that are likely to reach out to IRBs for information on their legislative obligations.
Again, given uncertainty, the effectiveness of the proposed changes under Option 2 in reducing
regulatory burden is assumed to be 1% (the break-even effectiveness rate). Therefore, both the
number of calls and the time spent on those calls was reduced by this effectiveness rate. The
difference between the status quo and the modelled scenario represents the avoided costs to IRBs
associated with the proposed changes under Option 2.
Table 3.12 Regulatory burden reduction for IRBs, per year
Effort under the status quo per Effort under the proposed Impact of proposed changes
year changes per year per year
Regulatory Time Quantity Time Quantity Time Quantity
burden
activity
Cost to IRBs 5 minutes per 4202 calls 4.95 minutes 4167 calls ↓0.04 ↓36 calls
spent on the call per call minutes (2
phone to seconds)
industry
Source: Deloitte Access Economics based on Report to Levies Stakeholders 2018-2019 (May 2020)
As such, relative to the status quo, the proposed changes under Option 2 would be required to yield
approximately $3,000 (NPV over 10 years) in avoided costs to IRBs or approximately $500 each year
(on average) in order to break-even.
3.7.3 Levy recipient bodies
Under the proposed changes under Option 2, provisions within the legislative framework relating to
the legal requirements and obligations of LRBs (for example, details relating to matching funding and
spending requirements) would be clarified and made more consistent. Based on consultation with
the department, the proposed changes under Option 2 are expected to reduce regulatory burden by
assisting LRBs (RDCs only) in their efforts to comply with their obligations under the agricultural
levies legislation relative to the status quo. The proposed changes under Option 2 achieve this by:
• clarifying requirements for different streams of funding to reduce the time and effort taken
by each RDC to ensure compliance with these requirements, and
• increasing the predictability and transparency of matching funding decisions and thus,
reducing the time and effort required to forecast and make investment decisions relating to
the allocation of matching funding.
Department of Agriculture, Fisheries and Forestry
48
Again, given uncertainty regarding the effectiveness of the proposed changes under Option 2 in
reducing regulatory burden, a break-even approach has been applied. Here, the effectiveness of the
proposed changes under Option 2 in reducing regulatory burden is assumed to be 1% (the break-
even effectiveness rate). For LRBs, the intervention effectiveness impacts modelled levels of
regulatory burden by:
• reducing the time required to ensure compliance with funding requirements on an ongoing
basis by 1% (see Table 3.13)
• reducing the time required to make investment decisions on an ongoing basis by 1% (see
Table 3.13).
Table 3.13 Regulatory burden reduction for LRBs, per year
Effort under the status quo per Effort under the proposed Impact of proposed
year changes per year changes per year
Regulatory burden Time Quantity Time Quantity Time Quantity
activity
Cost to LRBs to 80 hours (2 15 79.3 hours 15 ↓40 -
comply with weeks) per year per year minutes per
spending year
requirements
Cost to LRBs 160 hours (4 15 158.7 hours 15 ↓ 1.3 hour -
forecast and make weeks) per year per year per year (79
investment minutes)
decisions for
matched funding
Source: Deloitte Access Economics based on Report to Levies Stakeholders 2018-2019 (May 2020)
Therefore, using the break-even effectiveness rate, the proposed changes under Option 2 would
yield approximately $17,000 (NPV over 10 years) in avoided costs relative to the status quo, or
approximately $2,000 per year.
3.8 Benefits to government
Based on consultation with the department, the proposed changes under Option 2 are expected to
reduce the current costs associated with the administration of and compliance with the agricultural
levies legislation. This is largely due to an improvement in industry's understanding of legislative
obligations and therefore, a reduction in need for government to educate industry on these matters
and enforce compliance activities. In particular, the proposed changes under Option 2 are expected
to reduce costs, relative to the status quo, by:
• reducing instances of minor non-compliance with legislation (in the form of incorrect returns
and/or payments) and therefore, decreasing the number of queries generated
Department of Agriculture, Fisheries and Forestry
49
• reducing the time and frequency of industry stakeholder management activities (including
effort required to answer questions and explain obligations)
• reducing other costs including legal activities, IT and commodity-specific requests for
support.
Given uncertainty regarding the effectiveness of the proposed changes under Option 2 in reducing
regulatory burden (including the time and cost associated with administering the legislative
framework), a break-even approach has again been applied. Here, the effectiveness of the proposed
changes under Option 2 in reducing regulatory burden is assumed to be 1% (the break-even
effectiveness rate). For government, the intervention effectiveness impacts modelled levels of
regulatory burden by:
• reducing the annual cost associated with agent management through decreasing the number
of industry stakeholders requiring information and the average cost associated with engaging
with each agent by 1% (see Table 3.14)
• reducing the annual costs associated with queries by reducing the number of queries that are
raised as a result of incorrect returns by 1% (see Table 3.14)
• reducing the annual costs associated with non-targeted compliance by reducing the average
cost associated with managing missing or incorrect returns by 1% (see Table 3.14)
• reducing other costs (including legal services, IT, reports, and commodity-specific requires for
support) by 1% (see Table 3.14).
Table 3.14 Regulatory burden reduction for Government
Effort under the status quo per Effort under the proposed Impact of proposed
year changes per year changes per year
Regulatory burden Time Quantity Time Quantity Time Quantity
activity
Annual cost to $198 $4,202 $196 4,167 ↓$2 ↓36
Government
associated with
agent management
Annual cost to $26 16,554 $26 16,184 - ↓370
Government
associated with
queries
Annual cost to $338 2,500 $335 2,500 ↓$3 -
Government
associated non-
targeted
compliance
Other annual costs $309,000 $306,000 ↓$3,000
to Government
(including legal
Department of Agriculture, Fisheries and Forestry
50
services, IT,
reports, etc.)
Source: Deloitte Access Economics based on Report to Levies Stakeholders 2018-2019 (May 2020)
Relative to the status quo, the total benefit to the department in the form of avoided costs at an
intervention effectiveness rate of 1% is approximately $232,000 (NPV over 10 years) or
approximately $33,000 per year (on average). It is important to note that at this whole-of-economy
break-even point, the costs and benefits to Government to do not themselves break-even. An
intervention effectiveness rating of approximately 4.5% is required for the costs and benefits to
Government associated with the proposed reforms to be equal (see section 3.5).
3.9 Sensitivity analysis
3.9.1 Assumed effectiveness of the proposed changes under Option 2 (break-
even point)
3.9.1.1 Economy-wide break-even point
As noted in section 3.2.1.2, the costs and benefits have been estimated by calculating the required
intervention effectiveness rate for the proposed changes under Option 2 to break-even. In other
words, the level of reduction in regulatory burden required for the economy-wide costs and benefits
to be equal. At this rate of effectiveness, the proposed changes under Option 2 impose costs and
yield benefits of approximately $1.82 million (NPV over 10 years).
Given the uncertainty that exists with regards to the effectiveness of the proposed changes under
Option 2 and the large impact that changes in this effectiveness rate have on the modelled results,
sensitivity analysis is considered best practice and is being undertaken in this CBA to provide
information about how the benefits and costs may be affected by changes in the assumed
effectiveness of the proposed changes under Option 2. For example, sensitivity analysis can answer
questions such as what the benefits and costs would be if the proposed changes under Option 2 only
reduced regulatory burden by 0.5% and whether the changes would still be worthwhile in that
scenario.
To test the sensitivity of the CBA results against the effectiveness assumption, sensitivity analysis has
been conducted for two additional scenarios which lie 0.5 percentage points either side of the 1%
effectiveness rate modelled in the analysis above. All other assumptions used to calculate the costs
and benefits are held constant.
The results in Table 3.15 suggest that the benefits of the proposed changes under Option 2 are
sensitive to this assumption. When the effectiveness is reduced to 0.5%, the proposed changes under
Option 2 would impose a net-cost of approximately $718,000 (NPV over 10 years). Alternatively,
when the effectiveness assumption is increased to 1.5% , the combined costs and benefits yield a
net-benefit of approximately $1,477,000 (NPV over 10 years). At each of these effectiveness ratings,
industry stakeholders yield a net-benefit whilst a net-cost is imposed on Government.
Department of Agriculture, Fisheries and Forestry
51
Table 3.15 Results of sensitivity analysis of economy-wide intervention effectiveness assumption
Economy wide break-even point
0.50% 1% 1.50%
(modelled scenario)
Total economy-wide costs $1,823,000 1,823,000 $1,823,000
Total economy-wide $1,105,000 1,823,000 $3,300,000
benefit
Net-impact -$718,000 $0 $1,477,000
BCR (total) 0.62 1 1.81
BCR (industry) 1.69 2.79 5.05
BCR (government) 0.11 0.19 0.34
Source: Deloitte Access Economics
3.9.1.2 Industry break-even point
As demonstrated in section 3.5, the point at which the combined costs and benefits to industry break
even occurs when the intervention effectiveness rate is set to 0.3%. At this rate of effectiveness, the
proposed changes impose costs and yield benefits to industry of approximately $570,000 (NPV over
10 years).
To test the sensitivity of the CBA results against the effectiveness assumption, sensitivity analysis has
been conducted for 2 additional scenarios which lie 0.1 percentage points either side of the 0.3%
effectiveness rate modelled in the analysis above. All other assumptions used to calculate the costs
and benefits are held constant.
The results in Table 3.16 suggest that the benefits of the proposed changes under Option 2 are,
again, sensitive to this assumption. When the effectiveness rating is reduced to 0.2%, a net-cost of
approximately $183,000 is imposed on industry. Similarly, when the effectiveness rating is increased
to 0.3%, industry yields a net-benefit of approximately $202,000.
This supports the results of the broader CBA which suggests that, for industry, the proposed changes
must be at least 0.3% effective in reducing regulatory burden for the reforms to be worthwhile. It is
important to note here that the economy as a whole, including Government, incurs a net-cost at
each of these effectiveness ratings with BCRs of less than one.
Table 3.16 Results of sensitivity analysis of industry break-even point
Industry break-even point
0.2% 0.3% 0.4%
(modelled scenario)
Total economy-wide costs $1,823,000 1,823,000 $1,823,000
Department of Agriculture, Fisheries and Forestry
52
Total economy-wide $443,000 653,000 $885,000
benefit
Economy-wide net-impact -$1,381,000 -$1,170,000 -$939,000
Industry net-impact -$183,000 $0 $202,000
BCR (economy-wide) 0.24 0.36 0.49
BCR (industry) 0.68 1.00 1.35
BCR (government) 0.04 0.07 0.09
Source: Deloitte Access Economics
3.9.1.3 Government break-even point
As demonstrated in section 3.5, the point at which the combined costs and benefits to Government
break-even occurs when the intervention effectiveness rate is set to approximately 4.5%. At this rate
of effectiveness, the proposed changes under Option 2 impose costs and yield benefits to
government of approximately $1.25 million (NPV over 10 years) and the BCR is equal to one.
To test the sensitivity of the CBA results against the effectiveness assumption, sensitivity analysis has
been conducted for 2 additional scenarios which lie 1.5 percentage points either side of the 4.5%
effectiveness rate modelled in the analysis above. All other assumptions used to calculate the costs
and benefits are held constant.
The results in Table 3.17 suggest that the benefits of the proposed changes under Option 2 are
sensitive to this assumption. When the effectiveness rating is reduced to 3%, a net-cost of
approximately $415,000 is imposed on government. This means that at this effectiveness rating, the
costs to administer the scheme outweigh the ongoing benefits (avoided costs associated with
regulatory burden reduction).
Alternatively, when the effectiveness rating is increased to 6%, there is a net-benefit of
approximately $413,000 to government. This supports the results of the broader CBA which suggests
that, for government, the proposed changes under Option 2 must be at least 4.5% effective in
reducing regulatory burden for the combined costs and benefits to break-even and be worthwhile
doing.
Table 3.17 Results of sensitivity analysis of Government break-even point
Government wide break-even point
3% 4.5% 6%
(modelled scenario)
Total economy-wide costs $1,823,000 $1,823,000 $1,823,000
Total economy-wide $6,555,000 $9,759,000 $12,927,000
benefit
Economy-wide net-impact $4,731,000 $7,936,000 $11,103,000
Department of Agriculture, Fisheries and Forestry
53
Industry net-impact $5,146,000 $7,936,000 $10,690,000
Government net-impact -$415,000 $0 $413,000
BCR (economy-wide) 3.59 5.35 7.09
BCR (industry) 10.03 14.93 19.76
BCR (government) 0.67 1.00 1.33
Source: Deloitte Access Economics
3.9.2 Discount rate
It is also considered best practice to undertake sensitivity analysis on the discount rate given there is
general uncertainty about the appropriate discount rate to use for regulatory proposals16. The
Australian Government recommends a discount rate of 7% which has been applied in this analysis.
The Australian Government recommends sensitivity analysis of the net present value of benefits
using discount rate of 3 and 10%.
The results in Table 3.18 suggest that the benefits of the proposed changes under Option 2 are
sensitive to the discount rate. When the discount rate is reduced to 3%, the combined potential costs
and feasible benefits are estimated to impose an economy-wide net-benefit of $320,000 (NPV over
10 years). This means that, at a discount rate of 3%, the proposed changes are still worthwhile doing
at an effectiveness rating of 1%.
However, when the discount rate is increased to 10%, a net-cost is imposed on the economy of
approximately $178,000 (NPV over 10 years). Holding the effectiveness rating constant at 1%, the
proposed changes would not be worthwhile at this effectiveness rating as the whole-of-economy
BCR falls below one. Therefore, if costs and benefits were to be discounted at this rate, a new break-
even point or intervention effectiveness rating would need to be determined for the benefits
associated with the proposed changes under Option 2 to exceed the costs and be worth pursuing.
Table 3.18 Results of sensitivity analysis of the discount rate
Discount rate
3% 7% 10%
(modelled scenario)
Total economy-wide costs $1,894,000 $1,823,000 $1,774,000
16
Department of the Prime Minister and Cabinet Office of Best Practice Regulation, Guidance Note: Cost-
benefit Analysis (March 2020)
Department of Agriculture, Fisheries and Forestry
54
Total economy-wide $2,214,000 $1,823,000 $1,595,000
benefits
Net-impact $320,000 0 -$178,000
BCR (economy-wide) 1.17 1.00 0.90
BCR (industry) 3.26 2.79 2.51
BCR (government) 0.22 0.19 0.17
Source: Deloitte Access Economics
3.10 Conclusion
In summary, the proposed changes under Option 2 are expected to impose one-off transition costs
associated with implementing and understanding the changes of approximately $1.82 million (NPV
over 10 years) on the economy. Of these costs approximately $570,000 are likely to borne by
industry for compliance and $1.25 million borne by government for administration.
These costs are likely to break-even if the proposed changes under Option 2 are effective in reducing
regulatory burden by as little as 1% (approximately). This would involve a 1% reduction in the
quantity of compliance and administrative activities and/or a 1% reduction in the average cost of
those activities. This means that at any level of regulatory burden reduction over and above 1%, the
economy-wide benefits will outweigh the economy-wide costs and the proposed changes under
Option 2 are worth pursuing.
The scale of improvement in regulatory burden required to break-even (1%) is considered relatively
minor and therefore feasible. For example, in the case of calls made by industry to the department, a
1% reduction in call volume would comprise just 36 calls out of 4,202 per year. At this level of
effectiveness, the benefits to industry could be expected to reach approximately $1.59 million (NPV
over 10 years) and for government, approximately $232,000 (NPV over 10 years).
Department of Agriculture, Fisheries and Forestry
55
References
ABARES 2023, Snapshot of Australian Agriculture 2023, Australian Bureau of Agricultural and
Resource Economics and Sciences, Canberra, accessed on 10/05/2023.
ABARES 2023a, Australian Agricultural Productivity - Broadacre and Dairy Estimates, Australian
Bureau of Agricultural and Resource Economics and Sciences, Canberra, accessed on 10/05/2023.
ABARES 2023b, Agricultural research and development investment in Australia, Australian Bureau of
Agricultural and Resource Economics and Sciences, Canberra, accessed on 10/05/2023.
DAFF 2020, Levy guidelines: How to establish or amend agricultural levies, Department of
Agriculture, Fisheries and Forestry, Canberra, CC BY 4.0., accessed on 10/05/2023.
Department of Agriculture 2019, Streamlining and modernising agricultural levies legislation: Early
assessment regulation impact statement, Department of Agriculture, Canberra, accessed on
10/05/2023.
Office of Impact Analysis 2023, Australian Government Guide to Policy Impact Analysis, Department
of the Prime Minister and Cabinet accessed on 10/05/2023.
Productivity Commission 2011, Rural Research and Development Corporations, Productivity
Commission Inquiry Report No 52, Productivity Commission, Canberra, accessed on 18/05/2023.
Senate Rural and Regional Affairs and Transport References Committee 2015, Industry structures
and systems governing the imposition and disbursement of marketing and research and
development (R&D) levies in the agriculture sector, Commonwealth of Australia, Canberra, accessed
on 23/05/2023.
Department of Agriculture, Fisheries and Forestry
56
Attachment B
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Primary Industries (Excise) Levies Bill 2023
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Primary Industries (Excise) Levies Bill 2023, the Primary Industries (Customs) Charges
Bill 2023 and the Primary Industries (Services) Levies Bill 2023 (the Imposition Bills) form
part of a package of Bills to modernise the agricultural levies legislative framework.
The Imposition Bills would enable excise levies, customs charges and services levies to be
imposed as part of the agricultural levy system.
The Imposition Bills, in combination with the following Bills, would provide the overarching
legislative framework for the national agricultural levy system:
• Primary Industries Levies and Charges Collection Bill 2023 (Collection Bill), and
• Primary Industries Levies and Charges Disbursement Bill 2023 (Disbursement Bill).
The agricultural levy system is a long-standing partnership between industry and the
Australian Government to facilitate industry investment in strategic activities. The system has
been in place since 1989. Excise levies and customs charges are collected from farmers,
producers, processors and exporters. The Department of Agriculture, Fisheries and Forestry
publishes levy guidelines on its website to support agricultural, fisheries and forestry
industries through the process of developing a proposal to establish or amend an agricultural
levy or charge. The agricultural levy system allows agricultural, fisheries and forestry
industries to collectively invest in research and development (R&D), marketing, biosecurity
activities, biosecurity responses and residue testing activities. These investments are made by
levy recipient bodies on behalf of relevant industries. Without this arrangement most
individual producers, processors or exporters could not invest effectively in these activities.
The Australian Government also matches industry investment in R&D up to legislated limits
by providing payments to the levy recipient bodies. These levy recipient bodies are
colloquially known as research and development corporations (RDCs). A target of
investment in R&D equivalent to 1% of an industry's gross value of production (GVP) was
identified as the desired level of investment when the legislative framework first was
established in 1989. This target is still supported by the GVP limit on matching funding
today.
1
Over time, the agricultural levies legislation has become overly complex, duplicative, and
inconsistent. There are more than 50 pieces of legislation governing over 110 levies across
over 75 commodities and 18 levy recipient bodies. There are also some redundant and out of
date provisions.
A 2018 review of the agricultural levies legislation found the legislative framework serves
the objectives of the agricultural levy system and is necessary for a successful industry-
government arrangement. Despite this, the review found the current legislation is ineffective
in meeting industries' needs now and in the future.
The package of Bills would modernise the agricultural levies legislative framework to
provide contemporary, flexible and efficient legislation that would better support industries'
needs in the future.
The three Imposition Bills would replace five levy and charge imposition Acts:
• Primary Industries (Excise) Levies Act 1999 (PIEL Act), and National Residue
Survey (Excise) Levy Act 1998 (Levy Acts);
• Primary Industries (Customs) Charges Act 1999 (PICC Act), and National Residue
Survey (Customs) Levy Act 1998 (Charge Acts);
• Horse Disease Response Levy Act 2011 (HDRL Act).
These Acts would be repealed by the Primary Industries (Consequential Amendments and
Transitional Provisions) Bill 2023.
The Imposition Bills would enable existing excise levies and customs charges in the
agricultural levy system to be re-established in regulations, as well as enabling levies to be
imposed on certain agricultural services. The Primary Industries (Excise) Levies Bill 2023
(the Bill) would:
• enable the regulations to impose excise levies on produce of a primary industry.
Levies and charges on produce of a primary industry represent the majority of
existing levies and charges in the agricultural levy system and include levies and
charges on grains and other crops, horticultural products, fibre products, red meat,
poultry and eggs, pigs, game animals, forestry products, turf and farmed prawns.
• enable the regulations to impose excise levies in relation to goods consumed by, or
used in the maintenance or treatment of animals, plants, fungi or algae. This would
enable the horse disease response levy to be provided for in regulations under the Bill,
rather than remaining in stand-alone legislation.
• enable excise levies to be imposed in relation to goods that are for use in the
production or preparation of nursery products. This would enable the nursery products
levy to be re-established more simply in the regulations, while continuing to have a
similar operation in practice as it currently does.
2
• provide a consistent framework for excise levies, customs charges and services levies
by including equivalent provisions in all three Bills relating to common matters such
as definitions, exemptions from levy or charge, rate of levy or charge, and a range of
other matters.
• provide for consultation with affected industries before regulations are made that
would change levy rates or establish new levies.
• provide for an instrument to set out requirements for, or in relation to, the conduct of a
poll, enabling the re-establishment of requirements relating to polls in place for dairy
and wool industries.
Human rights implications
The Bill engages the following rights:
• the right to an adequate standard of living - Article 11(1) of the International
Covenant on Economic, Social and Cultural Rights (ICESCR)
• the right to health - Article 12(1) of the ICESCR
Right to an adequate standard of living
Right to an adequate standard of living
The Bill engages the right to an adequate standard of living under Article 11(1) of
the ICESCR. This includes the right to adequate food, clothing, water, and housing, and to
the continuous improvement of living conditions. States Parties have an obligation to ensure
the availability and accessibility of the resources necessary for the progressive realisation of
this right. Article 4 of the ICESCR provides that these rights may be subject to permissible
limitations only where those limitations are provided by law and are for the purpose of
promoting the general welfare in a democratic society.
Subclauses 7(1), 10(1) and 13(1) of the Bill provide that regulations may impose a levy in
relation to:
• one or more specified products that are produce of a primary industry in the
circumstances prescribed by the regulations
• one or more specified goods that are of a kind consumed by, or used in the
maintenance or treatment of, animals, plants, fungi, or algae in the circumstances
prescribed by the regulations
• one or more specified goods that are for use in the production or preparation of
nursery products for sale or for use in the commercial production of other goods and
in the circumstances prescribed by the regulations.
3
Subclauses 7(3), 10(2) and 13(2) provide that before regulations are made under
subclauses 7(1), 10(1) and 13(1), respectively, the Minister must be satisfied that the
imposition of the levy will result in expenditure on one or more activities aligned with the
purposes of the levy system. These activities are all directed towards the benefit of one or
more primary industries. These activities include:
• marketing, advertising or promotion of products of one or more primary industries
• research and development activities for the benefit of one or more primary industries
• activities, including biosecurity activities, relating to the promotion or maintenance of
the health of plants, animals, fungi or algae
• matters relating to a biosecurity response
• activities relating to the National Residue Survey.
Expenditure on these activities operates to underpin the profitability, productivity,
competitiveness, and long-term sustainability of the agricultural, fisheries and forestry sector.
The regulations would impose levies on approximately sixty animal, plant and fungus
products, including fishing, livestock, fibre, dairy, egg, forestry, horticultural, grain and seeds
products. The levies imposed on commodities across these sectors would ensure the
Australian agricultural, fisheries and forestry sector is well positioned to meet domestic and
international need for high quality and greater variety of food, fibre, wood and other primary
produce. They would also assist industry to collectively fund beneficial biosecurity projects
for pest and disease preparedness, emergency responses and management.
While the imposition of an excise levy may limit the profit levy payers make from goods
initially, the agricultural levy system itself promotes the right to an adequate standard of
living through the benefits of collective investment. Individual businesses often struggle to
fund strategic activities (such as R&D activities that will increase production in the long-term
or biosecurity activities that will address the risk to all growers from pests and diseases).
The levy system has evolved to allow agricultural, fisheries and forestry industries to
establish a legislated levy to raise funds for investment for the benefit of all levy payers.
Levies are imposed in response to a levy proposal supported by at least a majority of levy
payers and directed to industry-wide benefits. In this context, the imposition of levies is
reasonable and proportionate to the objective of improving the standard of living of levy
payers because it enhances their individual productivity, access to markets, climate resilience
and profitability. The activities funded by levy investments provide long-term benefits for
individual levy payers and industry as a whole that exceed the cost to individuals.
The outcomes of these investments also lead to broader public benefits for Australians and
the international community reliant on Australian production. By strengthening the
productivity of the Australian agricultural, fisheries and forestry sector, as well as making
production more resilient to threats, the activities funded by the levy system positively impact
the availability and accessibility of the resources necessary for the realisation of this right.
For example, the levy system benefits the availability and accessibility of food and other
4
primary produce such as fibre which may be used for clothing and wood which may be used
for housing.
On balance, the likely benefits delivered by the agricultural levy system are broad and serve
to promote the right to an adequate standard of living through improved economic and social
outcomes. The Bill therefore promotes the right to an adequate standard of living as it is
intended to support targeted investment to increase beneficial farming, fisheries and forestry
technologies and practices to help communities to achieve greater productivity, sustainability,
climate resilience, and food security.
Right to adequate food
The Bill also promotes the right to adequate food as provided by Article 11. The United
Nations Committee on Economic, Social and Cultural Rights (UNCESCR) has stated
(General Comment No 12 (May 1999)), that the right to adequate food should 'not be
interpreted in a narrow or restrictive sense which equates it with a minimum package of
calories, proteins and other specific nutrients', but implies it should be free from adverse
substances and accessible, both economically and physically.
Adequacy of food and sustainability are intrinsically linked, implying food being accessible
for both present and future generations. The precise meaning of "adequacy" is largely
determined by prevailing social, economic, cultural, climatic, ecological, and other
conditions, while "sustainability" incorporates the notion of long-term availability and
accessibility.
As noted in General Comment No 12, at international law, the right to food is also directed to
ensuring that food is free from adverse substances. The right to food is directed to ensuring
that food management regimes set requirements for both food safety and for protective
measures by both public and private means to prevent contamination of foodstuffs. For
example, these measures could be directed at preventing contamination through adulteration,
poor environmental hygiene or inappropriate handling at different stages throughout the food
chain. These measures could also relate to identifying, avoiding or destroying naturally
occurring toxins.
The Bill promotes the right to adequate food by enabling the investment of funds into
activities, such as biosecurity activities, residue testing and R&D, which support the secure
production of safe food.
The right to food is promoted by the Bill to the extent that some levies are specifically
imposed to fund biosecurity activities to manage the risk of pests and diseases entering,
establishing, or spreading in Australia. These activities can also prevent or lessen the impact
of these pests and disease on human, animal and plant health, as well as supporting food
security. By extension, these activities also support the environment and the economy. These
activities will support and augment Australia's animal and plant health status, through
government and industry partnerships for pest and disease preparedness, prevention,
emergency response and management. Biosecurity activities build industry cohesion and
generate sustainable funding pools to address industry priorities in a way that individual
producers could not do on their own.
5
The right to food is also promoted by the Bill to the extent some levies may also be imposed
to invest in monitoring, testing and reporting of levels of contaminants in agricultural
products or the environment to ensure the production of clean food. These activities prevent
or lessen the impact of those contaminants on their ultimate consumers. Given the scale of
Australia's exports to the world, the benefits of imposing levies for investment also accrue
beyond Australia's borders. By helping to monitor, test and report on contaminants, these
activities funded by levies provide a safety net for domestic and international food supply.
The right to food is also promoted by the Bill to the extent that R&D activities funded by
levies will have cumulative benefits for food security. For example, these activities may raise
funds for optimising production and processing, enhancing food safety and minimising waste
production. The right to food is promoted by funding increased R&D activities that support
and encourage marketable developments in agricultural industry which, in turn, positively
benefits the broader economy.
The imposition of levies represents a reasonable and proportionate tax on an individual levy
payer within the agricultural levy system. The flow-on benefits from new technologies or
practices developed in the agricultural sector supported by cumulative levy payments, serve
to leverage resources and research capability; share market knowledge and build adaptive
capacity in other sectors, thereby enhancing Australia's competitiveness on a global scale.
Summary
The Bill is compatible with the right to an adequate standard of living, including food,
clothing, water and housing, under Article 11(1) of the ICESCR because it positively engages
and promotes that right.
Right to health
Article 12 of the ICESCR promotes the right of all individuals to enjoy the highest attainable
standards of physical and mental health. This includes the application of measures for the
prevention, treatment, and control of epidemic, endemic, occupational, and other diseases
(Article 12(2)).
The UNCESCR has stated (General Comment 14 (2000)) that health is a fundamental human
right indispensable for the exercise of other human rights and that the right to health is not to
be understood as the right to be healthy, but rather entails a right to a system of health
protection which provides equality of opportunity for people to enjoy the highest attainable
level of health. The right may be understood as encompassing the prevention and reduction of
the population's exposure to harmful substances such as harmful chemicals or other
detrimental environmental conditions that directly or indirectly impact upon human health
(at [15]).
The Bill engages and promotes the right to health through imposing charges for investment in
activities that prevent or reduce harm to human health. Activities funded by the levy system
support access to food which is nutritionally adequate and safe for the Australian and
international community. Activities include biosecurity activities, residue testing as well as
wide-ranging R&D activities into agricultural production that can increase food production,
6
food security and food safety. For example, biosecurity activities that support the prevention
and control of animal diseases and plant pests contribute to adequate food supply. Monitoring
and testing of contaminant levels in agricultural products ensures that food produced in
Australia is safe (for example, that it does not contain unsafe levels of chemical residues or
heavy metals).
In summary, the Bill takes positive steps to promote the right to health through funding
activities which will support and underpin the sourcing and availability of safe food as well
as improving, monitoring and management of new and emerging food safety and security
risks.
Summary
The Bill is compatible with the right to health under Article 12 of the ICESCR because it
positively engages and promotes that right.
Conclusion
The Bill is compatible with human rights because it either advances human rights, does not
engage those rights or, to the extent that it may limit human rights, those limits are
reasonable, necessary, and proportionate to the Bill's legitimate policy objectives.
Therefore, the Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
the Hon. Murray Watt)
7
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Primary Industries (Customs) Charges Bill 2023
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Primary Industries (Excise) Levies Bill 2023, the Primary Industries (Customs) Charges
Bill 2023 and the Primary Industries (Services) Levies Bill 2023 (the Imposition Bills) form
part of a package of Bills to modernise the agricultural levies legislative framework.
The Imposition Bills would enable excise levies, customs charges and services levies to be
imposed as part of the agricultural levy system.
The Imposition Bills, in combination with the following Bills, would provide the overarching
legislative framework for the national agricultural levy system:
• Primary Industries Levies and Charges Collection Bill 2023 (Collection Bill), and
• Primary Industries Levies and Charges Disbursement Bill 2023 (Disbursement Bill).
The agricultural levy system is a long-standing partnership between industry and the
Australian Government to facilitate industry investment in strategic activities. The system has
been in place since 1989. Excise levies and customs charges are collected from farmers,
producers, processors and exporters. The Department of Agriculture, Fisheries and Forestry
publishes levy guidelines on its website to support agricultural, fisheries and forestry
industries through the process of developing a proposal to establish or amend an agricultural
levy or charge. The agricultural levy system allows agricultural, fisheries and forestry
industries to collectively invest in research and development (R&D), marketing, biosecurity
activities, biosecurity responses and residue testing activities. These investments are made by
levy recipient bodies on behalf of relevant industries. Without this arrangement most
individual producers, processors or exporters could not invest effectively in these activities.
The Australian Government also matches industry investment in R&D up to legislated limits
by providing payments to the levy recipient bodies. These levy recipient bodies are
colloquially known as research and development corporations (RDCs). A target of
investment in R&D equivalent to 1% of an industry's gross value of production (GVP) was
identified as the desired level of investment when the legislative framework first was
established in 1989. This target is still supported by the GVP limit on matching funding
today.
Over time, the agricultural levies legislation has become overly complex, duplicative, and
inconsistent. There are more than 50 pieces of legislation governing over 110 levies across
8
over 75 commodities and 18 levy recipient bodies. There are also some redundant and out of
date provisions.
A 2018 review of the agricultural levies legislation found the legislative framework serves
the objectives of the agricultural levy system and is necessary for a successful industry-
government arrangement. Despite this, the review found the current legislation is ineffective
in meeting industries' needs now and in the future.
The package of Bills would modernise the agricultural levies legislative framework to
provide contemporary, flexible and efficient legislation that would better support industries'
needs in the future.
The three Imposition Bills would replace five levy and charge imposition Acts:
• Primary Industries (Excise) Levies Act 1999 (PIEL Act), and National Residue
Survey (Excise) Levy Act 1998 (Levy Acts);
• Primary Industries (Customs) Charges Act 1999 (PICC Act), and National Residue
Survey (Customs) Levy Act 1998 (Charge Acts);
• Horse Disease Response Levy Act 2011 (HDRL Act).
These Acts would be repealed by the Primary Industries (Consequential Amendments and
Transitional Provisions) Bill 2023.
The Imposition Bills would enable existing excise levies and customs charges in the
agricultural levy system to be re-established in regulations, as well as enabling levies to be
imposed on certain agricultural services. The Primary Industries (Customs) Charges Bill 2023
(the Bill) would:
• enable the regulations to impose customs charges on produce of a primary industry.
Levies and charges on produce of a primary industry represent the majority of
existing levies and charges in the agricultural levy system and include levies and
charges on grains and other crops, horticultural products, fibre products, red meat,
poultry and eggs, pigs, game animals, forestry products, turf and farmed prawns.
• enable the regulations to impose customs charges in relation to goods consumed by,
or used in the maintenance or treatment of animals, plants, fungi or algae.
• provide a consistent framework for excise levies, customs charges and services levies
by including equivalent provisions in all three Bills relating to common matters such
as definitions, exemptions from levy or charge, rate of levy or charge, and a range of
other matters.
• provide for consultation with affected industries before regulations are made that
would change charge rates or establish new charges.
9
• provide for an instrument to set out requirements for, or in relation to, the conduct of a
poll.
Human rights implications
The Bill engages the following rights:
• the right to an adequate standard of living - Article 11(1) of the International
Covenant on Economic, Social and Cultural Rights (ICESCR)
• the right to health - Article 12(1) of the ICESCR
Right to an adequate standard of living
Right to an adequate standard of living
The Bill engages the right to an adequate standard of living under Article 11(1) of
the ICESCR. This includes the right to adequate food, clothing, water, and housing, and to
the continuous improvement of living conditions. States Parties have an obligation to ensure
the availability and accessibility of the resources necessary for the progressive realisation of
this right. Article 4 of the ICESCR provides that these rights may be subject to permissible
limitations only where those limitations are provided by law and are for the purpose of
promoting the general welfare in a democratic society.
Subclauses 7(1) and 10(1) of the Bill provide that regulations may impose a charge in relation
to:
• one or more specified products that are produce or a primary industry and in the
circumstances prescribed by the regulations
• one or more specified goods that are of a kind consumed by, or used in the
maintenance or treatment of, animals, plants, fungi, or algae and in the circumstances
prescribed by the regulations.
Subclauses 7(3) and 10(2) provide that before regulations are made under subclause
subclauses 7(1) and 10(1), respectively, the Minister must be satisfied that the imposition of
the levy will result in expenditure on one or more activities aligned with the purposes of the
levy system. These activities are all directed towards the benefit of one or more primary
industries. The activities include:
• marketing, advertising or promotion of products of one or more primary industries
• R&D activities for the benefit of one or more primary industries
• activities, including biosecurity activities, relating to the promotion or maintenance of
the health of plants, animals, fungi or algae
• matters relating to a biosecurity response
10
• activities relating to the National Residue Survey.
Expenditure on these activities operates to underpin the profitability, productivity,
competitiveness, and long-term sustainability of the agricultural, fisheries and forestry sector.
The regulations would impose charges on approximately forty animal and plant products,
including fishing, livestock, fibre, fodder, forestry, wine and horticultural products. The
charges imposed on commodities across these sectors would ensure the Australian
agricultural, fisheries and forestry sector is well positioned to meet domestic and international
need for high quality and greater variety of food, fibre, wood and other primary produce.
They would also assist industry to collectively fund beneficial biosecurity projects for pest
and disease preparedness, emergency response and management.
While the imposition of a charge may limit the profit charge payers make from their goods
initially, the agricultural levy system itself promotes the right to an adequate standard of
living through the benefits of collective investment. Individual businesses often struggle to
fund strategic activities (such as R&D activities that will increase production in the long-term
or biosecurity activities that will address the risk to all growers from pests and diseases). The
levy system has evolved to allow agricultural, fisheries and forestry industries to establish a
legislated levy to raise funds for investment for the benefit of all levy payers. Charges are
imposed in response to a charge proposal supported by at least a majority of charge payers
and directed to industry-wide benefits. In this context, the imposition of charges is reasonable
and proportionate to the objective of improving the standard of living of charge payers
because it enhances their individual productivity, access to markets, climate resilience and
profitability. The activities funded by charge investments provide long-term benefits for
individual charge payers and industry as a whole that exceed the cost to individuals.
The outcomes of these investments also lead to broader public benefits for Australians and
the international community reliant on Australian production. By strengthening the
productivity of the Australian agricultural, fisheries and forestry sector, as well as making
production more resilient to threats, the activities funded by the levy system positively impact
the availability and accessibility of the resources necessary for the realisation of this right.
For example, the levy system benefits the availability and accessibility of food and other
primary produce such as fibre which may be used for clothing and wood which may be used
for housing.
On balance, the likely benefits delivered by the agricultural levy system are broad and serve
to promote the right to an adequate standard of living through improved economic and social
outcomes. The Bill therefore promotes the right to an adequate standard of living as it is
intended to support targeted to increase beneficial farming, fisheries and forestry technologies
and practices to help communities to achieve greater productivity, sustainability, climate
resilience, and food security.
Right to adequate food
The Bill also promotes the right to adequate food as provided by Article 11. The United
Nations Committee on Economic, Social and Cultural Rights (UNCESCR) has stated
(General Comment No 12 (May 1999)), that the right to adequate food should 'not be
11
interpreted in a narrow or restrictive sense which equates it with a minimum package of
calories, proteins and other specific nutrients', but implies it should be free from adverse
substances and accessible, both economically and physically.
Adequacy of food and sustainability are intrinsically linked, implying food being accessible
for both present and future generations. The precise meaning of "adequacy" is largely
determined by prevailing social, economic, cultural, climatic, ecological, and other
conditions, while "sustainability" incorporates the notion of long-term availability and
accessibility.
As noted in General Comment No 12, at international law, the right to food is also directed to
ensuring that food is free from adverse substances. The right to food is directed to ensuring
that food management regimes set requirements for both food safety and for protective
measures by both public and private means to prevent contamination of foodstuffs. For
example, these measures could be directed at preventing contamination through adulteration,
poor environmental hygiene or inappropriate handling at different stages throughout the food
chain. These measures could also relate to identifying, avoiding or destroying naturally
occurring toxins.
The Bill promotes the right to adequate food by enabling the investment of funds into
activities, such as biosecurity activities, residue testing and R&D, which support the secure
production of safe food.
The right to food is promoted by the Bill to the extent that some charges are specifically
imposed to fund biosecurity activities to manage the risk of pests and diseases entering,
establishing, or spreading in Australia. These activities can also prevent or lessen the impact
of these pests and disease on human, animal and plant health, as well as supporting food
security. By extension, these activities also support the environment and the economy. These
activities will support and augment Australia's animal and plant health status, through
government and industry partnerships for pest and disease preparedness, prevention,
emergency response and management. Biosecurity activities build industry cohesion and
generate sustainable funding pools to address industry priorities in a way that individual
producers could not do on their own.
The right to food is also promoted by the Bill to the extent some levies may also be imposed
to invest in monitoring, testing and reporting of levels of contaminants in agricultural
products or the environment to ensure the production of clean food. These activities prevent
or lessen the impact of those contaminants on their ultimate consumers. Given the scale of
Australia's exports to the world, the benefits of imposing levies for investment also accrue
beyond Australia's borders. By helping to monitor, test and report on contaminants, these
activities funded by levies provide a safety net for domestic and international food supply.
The right to food is also promoted by the Bill to the extent that R&D activities funded by
charges will have cumulative benefits for food security. For example, these activities may
raise funds for optimising production and processing, enhancing food safety and minimising
waste production. The right to food is promoted by funding increased R&D activities that
12
support and encourage marketable developments in agricultural industry which, in turn,
positively benefits the broader economy.
The imposition of charges represents a reasonable and proportionate tax on an individual
charge payer. The flow-on benefits from new technologies and practices developed through
the agricultural levy system serve to leverage resources and research capability, share market
knowledge and build adaptive capacity in other sectors, thereby enhancing Australia's
competitiveness on a global scale.
Summary
The Bill is compatible with the right to an adequate standard of living, including food,
clothing, water and housing, under Article 11(1) of the ICESCR because it positively engages
and promotes that right.
Right to health
Article 12 of the ICESCR promotes the right of all individuals to enjoy the highest attainable
standards of physical and mental health. This includes the application of measures for the
prevention, treatment, and control of epidemic, endemic, occupational, and other diseases
(Article 12(2)).
The UNCESCR has stated (General Comment 14 (2000)) that health is a fundamental human
right indispensable for the exercise of other human rights and that the right to health is not to
be understood as the right to be healthy, but rather entails a right to a system of health
protection which provides equality of opportunity for people to enjoy the highest attainable
level of health. The right may be understood as encompassing the prevention and reduction of
the population's exposure to harmful substances such as harmful chemicals or other
detrimental environmental conditions that directly or indirectly impact upon human health
(at [15]).
The Bill engages and promotes the right to health through imposing charges for investment in
activities that prevent or reduce harm to human health. Activities funded by the levy system
support access to food which is nutritionally adequate and safe for the Australian and
international community. Activities include biosecurity activities, residue testing as well as
wide-ranging R&D activities into agricultural production that can increase food production,
food security and food safety. For example, biosecurity activities that support the prevention
and control of animal diseases and plant pests contribute to adequate food supply. Monitoring
and testing of contaminant levels in agricultural products ensures that food produced in
Australia is safe (for example, that it does not contain unsafe levels of chemical residues or
heavy metals).
In summary, the Bill takes positive steps to promote the right to health through funding
activities which will support and underpin the sourcing and availability of safe food as well
as improving, monitoring and management of new and emerging food safety and security
risks.
13
Summary
The Bill is compatible with the right to health under Article 12 of the ICESCR because it
positively engages and promotes that right.
Conclusion
The Bill is compatible with human rights because it either advances human rights, does not
engage those rights or, to the extent that it may limit human rights, those limits are
reasonable, necessary, and proportionate to the Bill's legitimate policy objectives.
Therefore, the Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
the Hon. Murray Watt)
14
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Primary Industries (Services) Levies Bill 2023
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Primary Industries (Excise) Levies Bill 2023, the Primary Industries (Customs) Charges
Bill 2023 and the Primary Industries (Services) Levies Bill 2023 (the Imposition Bills) form
part of a package of Bills to modernise the agricultural levies legislative framework.
The Imposition Bills would enable excise levies, customs charges and services levies to be
imposed as part of the agricultural levy system.
The Imposition Bills, in combination with the following Bills, would provide the overarching
legislative framework for the national agricultural levy system:
• Primary Industries Levies and Charges Collection Bill 2023 (Collection Bill), and
• Primary Industries Levies and Charges Disbursement Bill 2023 (Disbursement Bill).
The agricultural levy system is a long-standing partnership between industry and the
Australian Government to facilitate industry investment in strategic activities. The system has
been in place since 1989. Excise levies and customs charges are collected from farmers,
producers, processors and exporters. The Department of Agriculture, Fisheries and Forestry
publishes levy guidelines on its website to support agricultural, fisheries and forestry
industries through the process of developing a proposal to establish or amend an agricultural
levy or charge. The agricultural levy system allows agricultural, fisheries and forestry
industries to collectively invest in research and development (R&D), marketing, biosecurity
activities, biosecurity responses and residue testing activities. These investments are made by
levy recipient bodies on behalf of relevant industries. Without this arrangement most
individual producers, processors or exporters could not invest effectively in these activities.
The Australian Government also matches industry investment in R&D up to legislated limits
by providing payments to the levy recipient bodies. These levy recipient bodies are
colloquially known as research and development corporations (RDCs). A target of
investment in R&D equivalent to 1% of an industry's gross value of production (GVP) was
identified as the desired level of investment when the legislative framework first was
established in 1989. This target is still supported by the GVP limit on matching funding
today.
Over time, the agricultural levies legislation has become overly complex, duplicative, and
inconsistent. There are more than 50 pieces of legislation governing over 110 levies across
15
over 75 commodities and 18 levy recipient bodies. There are also some redundant and out of
date provisions.
A 2018 review of the agricultural levies legislation found the legislative framework serves
the objectives of the agricultural levy system and is necessary for a successful industry-
government arrangement. Despite this, the review found the current legislation is ineffective
in meeting industries' needs now and in the future.
The package of Bills would modernise the agricultural levies legislative framework to
provide contemporary, flexible and efficient legislation that would better support industries'
needs in the future.
The three Imposition Bills would replace five levy and charge imposition Acts:
• Primary Industries (Excise) Levies Act 1999 (PIEL Act), and National Residue
Survey (Excise) Levy Act 1998 (Levy Acts);
• Primary Industries (Customs) Charges Act 1999 (PICC Act), and National Residue
Survey (Customs) Levy Act 1998 (Charge Acts);
• Horse Disease Response Levy Act 2011 (HDRL Act).
These Acts would be repealed by the Primary Industries (Consequential Amendments and
Transitional Provisions) Bill 2023.
The Imposition Bills would enable existing excise levies and customs charges in the
agricultural levy system to be re-established in regulations, as well as enabling levies to be
imposed on certain agricultural services. The Primary Industries (Services) Levies Bill 2023
(the Bill) would:
• enable the regulations to impose levies on services that facilitate the production of
products that are produce of a primary industry. For example, the Services Bill could
enable a levy to be imposed on bee pollination services provided on a commercial
basis to pollinate orchards and crops.
• provide a consistent framework for excise levies, customs charges and services levies
by including equivalent provisions in all three Bills relating to common matters such
as definitions, exemptions from levy or charge, rate of levy or charge, and a range of
other matters.
• provide for consultation with affected industries before regulations are made that
would change levy rates or establish new levies.
• provide for an instrument to set out requirements for, or in relation to, the conduct of a
poll.
16
Human rights implications
The Bill engages the following rights:
• the right to an adequate standard of living - Article 11(1) of the International
Covenant on Economic, Social and Cultural Rights (ICESCR)
• the right to health - Article 12(1) of the ICESCR
Right to an adequate standard of living
Right to an adequate standard of living
The Bill engages the right to an adequate standard of living under Article 11(1) of
the ICESCR. This includes the right to adequate food, clothing, water, and housing, and to
the continuous improvement of living conditions. States Parties have an obligation to ensure
the availability and accessibility of the resources necessary for the progressive realisation of
this right. Article 4 of the ICESCR provides that these rights may be subject to permissible
limitations only where those limitations are provided by law and are for the purpose of
promoting the general welfare in a democratic society.
Subclause 7(1) of the Bill provides that regulations may impose a levy on the provision of a
specified service that facilitates the production of a product of primary industry.
Subclause 7(3) provides that before regulations are made under subclause 7(1), the Minister
must be satisfied that the imposition of the levy will result in expenditure on one or more
activities aligned with the purposes of the levy system. These activities are all directed
towards the benefit of one or more primary industries. These activities include:
• marketing, advertising or promotion of products of one or more primary industries
• research and development activities for the benefit of one or more primary industries
• activities, including biosecurity activities, relating to the promotion or maintenance of
the health of plants, animals, fungi or algae
• matters relating to a biosecurity response
• activities relating to the National Residue Survey.
Expenditure on these activities operates to underpin the profitability, productivity,
competitiveness, and long-term sustainability of the agricultural, fisheries and forestry sector.
For an industry that seeks to do so, a services levy may be imposed to generate funds for
collective industry investment in activities aligned with the purposes of the levy system. The
Services Bill is intended to provide a further option, in addition to excise levies and customs
charges, to producers in the Australian agricultural, fisheries and forestry sector. By meeting
the needs of industry sectors for whom an excise levy or customs charge is not an efficient or
effective means to impose levy, services levies would ensure the Australian agricultural,
17
fisheries and forestry sector is well positioned to meet domestic and international need for
high quality and greater variety of food, fibre, wood and other primary produce. They would
also assist industry to collectively fund beneficial biosecurity projects for pest and disease
preparedness, emergency response and management.
While the imposition of a services levy may limit the profit levy payers make from their
services initially, the agricultural levy system itself promotes the right to an adequate
standard of living through the benefits of collective investment. Individual businesses often
struggle to fund strategic activities (such as R&D activities that will increase production in
the long-term or biosecurity activities that will address the risk to all growers from pests and
diseases). The levy system has evolved to allow agricultural, fisheries and forestry industries
to establish a legislated levy to raise funds for investment for the benefit of all levy payers.
Levies are imposed in response to a levy proposal supported by at least a majority of levy
payers and directed to industry-wide benefits. In this context, the imposition of levies is
reasonable and proportionate to the objective of improving the standard of living of levy
payers because it enhances their individual productivity, access to markets, climate resilience
and profitability. The activities funded by levy investments provide long-term benefits for
individual levy payers and industry as a whole that exceed the cost to individuals.
The outcomes of these investments also lead to broader public benefits for Australians and
the international community reliant on Australian production. By strengthening the
productivity of the Australian agricultural, fisheries and forestry sector, as well as making
production more resilient to threats, the activities funded by the levy system positively impact
the availability and accessibility of the resources necessary for the realisation of this right.
For example, the levy system benefits the availability and accessibility of food and other
primary produce such as fibre which may be used for clothing and wood which may be used
for housing.
On balance, the likely benefits delivered by the agricultural levy system are broad and serve
to promote the right to an adequate standard of living through improved economic and social
outcomes. The Bill therefore promotes the right to an adequate standard of living as it is
intended to support targeted investment to increase beneficial farming, fisheries and forestry
technologies and practices to help communities to achieve greater productivity, sustainability,
climate resilience, and food security.
Right to adequate food
The Bill also promotes the right to adequate food as provided by Article 11. The United
Nations Committee on Economic, Social and Cultural Rights (UNCESCR) has stated
(General Comment No 12 (May 1999)), that the right to adequate food should 'not be
interpreted in a narrow or restrictive sense which equates it with a minimum package of
calories, proteins and other specific nutrients', but implies it should be free from adverse
substances and accessible, both economically and physically.
Adequacy of food and sustainability are intrinsically linked, implying food being accessible
for both present and future generations. The precise meaning of "adequacy" is largely
determined by prevailing social, economic, cultural, climatic, ecological, and other
18
conditions, while "sustainability" incorporates the notion of long-term availability and
accessibility.
As noted in General Comment No 12, at international law, the right to food is also directed to
ensuring that food is free from adverse substances. The right to food is directed to ensuring
that food management regimes set requirements for both food safety and for protective
measures by both public and private means to prevent contamination of foodstuffs. For
example, these measures could be directed at preventing contamination through adulteration,
poor environmental hygiene or inappropriate handling at different stages throughout the food
chain. These measures could also relate to identifying, avoiding or destroying naturally
occurring toxins.
The Bill promotes the right to adequate food by enabling the investment of funds into
activities, such as biosecurity activities, residue testing and R&D, which support the secure
production of safe food.
The right to food is promoted by the Bill to the extent that some levies can be specifically
imposed to fund biosecurity activities to manage the risk of pests and diseases entering,
establishing, or spreading in Australia. These activities can also prevent or lessen the impact
of these pests and disease on human, animal and plant health, as well as supporting food
security. By extension, these activities also support the environment and the economy. These
activities will support and augment Australia's animal and plant health status, through
government and industry partnerships for pest and disease preparedness, prevention,
emergency response and management. Biosecurity activities build industry cohesion and
generate sustainable funding pools to address industry priorities in a way that individual
producers could not do on their own.
The right to food is also promoted by the Bill to the extent some levies may also be imposed
to invest in monitoring, testing and reporting of levels of contaminants in agricultural
products or the environment to ensure the production of clean food. These activities prevent
or lessen the impact of those contaminants on their ultimate consumers. Given the scale of
Australia's exports to the world, the benefits of imposing levies for investment also accrue
beyond Australia's borders. By helping to monitor, test and report on contaminants, these
activities funded by levies provide a safety net for domestic and international food supply.
The right to food is also promoted by the Bill to the extent that R&D activities funded by
levies will have cumulative benefits for food security. For example, these activities may raise
funds for optimising production and processing, enhancing food safety and minimising waste
production. The right to food is promoted by funding increased R&D activities that support
and encourage marketable developments in agricultural industry which, in turn, positively
benefits the broader economy.
The imposition of levies represents a reasonable and proportionate tax on an individual levy
payer. The flow-on benefits from new technologies and practices developed through the
agricultural levy system serve to leverage resources and research capability, share market
knowledge and build adaptive capacity in other sectors, thereby enhancing Australia's
competitiveness on a global scale.
19
Summary
The Bill is compatible with the right to an adequate standard of living, including food,
clothing, water and housing, under Article 11(1) of the ICESCR because it positively engages
and promotes that right.
Right to health
Article 12 of the ICESCR promotes the right of all individuals to enjoy the highest attainable
standards of physical and mental health. This includes the application of measures for the
prevention, treatment, and control of epidemic, endemic, occupational, and other diseases
(Article 12(2)).
The UNCESCR has stated (General Comment 14 (2000)) that health is a fundamental human
right indispensable for the exercise of other human rights and the right to health is not to be
understood as the right to be healthy, but rather as a right to a system of health protection
which provides equality of opportunity for people to enjoy the highest attainable level of
health. The right may be understood as encompassing the prevention and reduction of the
population's exposure to harmful substances such as harmful chemicals or other detrimental
environmental conditions that directly or indirectly impact upon human health (at [15]).
The Bill engages and promotes the right to health through imposing charges for investment in
activities that prevent or reduce harm to human health. Activities funded by the levy system
support access to food which is nutritionally adequate and safe for the Australian and
international community. Activities include biosecurity activities, residue testing as well as
wide-ranging R&D activities into agricultural production that can increase food production,
food security and food safety. For example, biosecurity activities that support the prevention
and control of animal diseases and plant pests contribute to adequate food supply. Monitoring
and testing of contaminant levels in agricultural products ensures that food produced in
Australia is safe (for example, that it does not contain unsafe levels of chemical residues or
heavy metals).
In summary, the Bill takes positive steps to promote the right to health through funding
activities which will support and underpin the sourcing and availability of safe food as well
as improving, monitoring and management of new and emerging food safety and security
risks.
Summary
The Bill is compatible with the right to health under Article 12 of the ICESCR because it
positively engages and promotes that right.
Conclusion
The Bill is compatible with human rights because it either advances human rights, does not
engage those rights or, to the extent that it may limit human rights, those limits are
reasonable, necessary, and proportionate to the Bill's legitimate policy objectives.
20
Therefore, the Bill is compatible with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
the Hon. Murray Watt)
21