Commonwealth Numbered Regulations - Explanatory Statements

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Issued by the authority of the Minister for Primary Industries and Energy

Cotton Levy Act 1982

Cotton Research Levy Regulations (Amendment)

Section 5 of the Cotton Levy Act 1982 (the Act) imposes a levy on cotton produced in Australia.

Subsection 5(2) of the Act provides that the rate of levy shall not exceed $3.00 per 225 kilograms.

Subsection 6(1) of the Act provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters permitted by the Act to be prescribed.

Subsection 6(2) of the Act provides that before making regulations for the purposes of Subsection 5(2) the Governor-General shall take into consideration any relevant recommendation made to the Minister by the grower's organisation, the Australian Cotton Growers Research Association (ACGRA).

The currently prescribed rate of levy operative since 1 January 1989 is $1.50 per 225 kilograms. The ACGRA has written to the Minister recommending that the rate of levy be increased from $1.50 per 225 kilograms to $1.75 per 227 kilograms. The change from 225kg to 227kg reflects a recent change in the standard weight of a bale of raw cotton. Adoption of the new levy basis will result in increased administrative efficiency.

The industry's recommendation to increase the levy accords with the Government's objective of encouraging rural industries to increase their contribution for research to at least 0.5% of the industry's Gross Value of Production (GVP) and is necessary to support the current level of research expenditure. The proposed new rate of levy represents an increase to 0.4% of the industry's estimated GVP for 1991/92.

Section 30 of the Primary Industries and Energy Research and Development Act 1989 (PIERD Act) provides that an amount equal to the levy be paid to the CRDC and Section 33(1)of the PIERD Act provides that the CRDC's funds may be spent for the purposes of research and development activities in respect of the cotton industry.

The Commonwealth Government contributes matching amounts to cover research expenditure recommended by the CRDC and approved by the Minister.

In any one financial year the Commonwealth contribution is limited to 0.5% of the GVP. Estimated Commonwealth expenditure for 1991/92 is $2.25 million. Increased funding to meet estimated Commonwealth obligations in 1991/92 resulting from the proposed levy increase has been provided for in portfolio forward estimates.

Cotton Research Levy Regulations to increase the rate of levy to $1.75 per 227 kilograms are to apply from 1 January 1992.

Details of the proposed amendments are set out in the attachment.



Regulation 1

Commencement - provides that the regulations will commence on 1 January 1992.

Regulation 2

Amendment - the Cotton Research levy Regulations are amended as set out in these Regulations.

Regulation 3

Rate of Levy - amends the existing rate of levy, substituting the new rate, "$1.75 per 227 kilograms".

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