Commonwealth Numbered Regulations - Explanatory Statements

[Index] [Search] [Download] [Related Items] [Help]

PRIMARY INDUSTRIES (CUSTOMS) CHARGES AMENDMENT REGULATIONS 2011 (NO. 2) (SLI NO 205 OF 2011)

EXPLANATORY STATEMENT

Select Legislative Instrument 2011 No. 205

Issued with the authority of the Parliamentary Secretary for Agriculture, Fisheries and Forestry

Primary Industries (Customs) Charges Act 1999

Primary Industries (Customs) Charges Amendment Regulations 2011 (No. 2)

Legislative Authority

Section 8 of the Primary Industries (Customs) Charges Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed, for carrying out or giving effect to the Act.

Schedule 14 to the Act provides that the regulations may impose charges on one or more specified primary industry products in the circumstances, at the rates, and payable by the person, ascertained in accordance with the regulations. Primary industry produce includes horticultural products and products that result from agriculture or the cultivation of land (clause 1 of Schedule 14).

Subclause 3(5) of Schedule 10 to the Act provides that the regulations may fix a rate of charge for the purposes of research and development in relation to a class of chargeable horticultural products. Subclause 14.1 and 17.2 of Schedule 10 to the Primary Industries (Customs) Charges Regulations 2000 (the Regulations) provides that unprocessed potatoes and vegetables are a chargeable horticultural product.

Background

The Act prescribes charges on products of primary industry for the purposes of marketing, research and development (R&D), industry body membership and/or emergency pest and disease response.

The Emergency Plant Pest Response Deed (EPPRD) is a formal agreement between the Australian Government, all state and territory governments, Plant Health Australia (PHA) and plant industry signatories on how to manage the costs and responsibilities for responding to an emergency plant pest outbreak. Under the EPPRD, the Commonwealth Government may initially meet an industry's cost-sharing obligations, but the industry will then repay the Commonwealth within a reasonable time period--generally up to 10 years.

Industry signatories to the EPPRD must nominate how they will meet their financial liabilities--this is usually done by establishing an EPPR levy and/or charge. An EPPR levy and/or charge is usually set to zero and only activated when an emergency plant pest incident occurs. Where an industry is required to pay back the Commonwealth, the industry and Commonwealth will negotiate a time period for the industry to repay the debt. The rate for the response levy and/or charge will be calculated based on the time period.

Ausveg Limited (Ausveg) is the representative body for unprocessed potatoes and vegetable commodities, and is signatory to the EPPRD on behalf of these industries. Ausveg has requested that zero-rated EPPR charges be established for the unprocessed potato and vegetable industries.

In addition to the EPPR levies, Ausveg requested changes to the existing PHA and R&D charges for unprocessed potatoes and vegetables.

PHA was established in 2000 as a company responsible for coordinating national plant health matters. Its members consist of the Commonwealth and all state and territory governments and national industry bodies representing major plant industries. PHA's core annual running costs are shared between its members. The Plant Health Australia (Plant Industries) Funding Act 2002 provides a mechanism which plant industry members can elect to use to meet their annual member subscriptions through charges imposed under the Act.

Ausveg, the peak national representative body for the vegetable and unprocessed potato industries, is a member of PHA. As with other industry members of PHA, Ausveg's annual membership liabilities are met through a PHA levy and charge.

Purpose and Impact

The Primary Industries (Customs) Charges Amendment Regulations 2011 (No. 2) (the Amendment Regulations) amend the Regulations to establish EPPR charges for unprocessed potatoes and vegetables. The Amendment Regulations also amend the existing research and development (R&D) and Plant Health Australia (PHA) charges on unprocessed potatoes to reduce the R&D charge by 1 cent per tonne and increase the PHA charge by 1 cent per tonne.

Additionally, the Amendment Regulations amend the R&D and PHA levies on vegetables to reduce the R&D levy by 0.0075 percent of the vegetables of the free on board value of the vegetables immediately before export; and increase the PHA levy by 0.0075 percent of the value of the free on board value of the vegetables immediately before export.

These changes enable Ausveg to meet increases in the financial contribution it is required to make to PHA. The total amount of charge imposed on vegetables and unprocessed potatoes will not change.

These Amendment Regulations are part of a package of amendments. The package also included amendments to the Primary Industries (Excise) Levies Regulations 1999.

The amendments to Primary Industries (Excise) Levies Regulations 1999 implement equivalent EPPR levies on unprocessed potatoes and vegetables and also make equivalent amendments to the previous PHA and R&D levies.

Consultation

The Act specifies that, if there is a single body that is a designated body in relation to a particular product, then the Minister must take into consideration any relevant recommendation made to the Minister by the body before the Governor-General makes a regulation in relation to the product (clause 13 of Schedule 14). At the time of making these Amendment Regulations, there were no designated bodies declared by the Minister for the products with which the Amendment Regulations were concerned. However, the Minister did take into account recommendations from the national peak representative industry body for unprocessed potatoes and vegetables in approving these Amendment Regulations.

Subclause 5(5) of Schedule 10 to the Act provides that, before the Governor-General makes regulations for the purpose of prescribing an R&D charge, the Minister must take into consideration any relevant recommendation made to the Minister by the industry services body. Horticulture Australia Limited (HAL) is the declared industry services body for unprocessed potatoes and vegetables at the time of making these Amendment Regulations (see clause 1 of Schedule 10 to the Act and section 9 to the Horticulture Marketing and Research Development Services Act 2000). The Minister has taken into consideration the recommendation made by HAL on 1 June 2011 in making the Amendment Regulations.

Subclause 5(7) of Schedule 10 to the Act provides that, before making a recommendation to the Minister, the industry services body must consult with the eligible industry body prescribed under the regulations. Ausveg Limited is the prescribed eligible industry body for the unprocessed potato and vegetables industries (clauses 14.5 and 17.6 of Schedule 10 to the Regulations). HAL and Ausveg Limited have worked together during the entire charge payer consultation process.

For a new charge to be imposed or for a charge to be amended, industry (generally through its representative body) must demonstrate that the Australian Government Levy Principles and Guidelines have been complied with. This includes demonstrating that sufficient consultation has been undertaken with all sectors of the potentially effected industry or current charge payers, and that there is industry support for the new charge or change in charge rate. Ausveg's submission of 4 January 2011 to the Department of Agriculture, Fisheries and Forestry, further information received on 23 May 2011 and the correspondence received from HAL on 1 June 2011 indicate that there is widespread support for the amendments to the PHA and R&D charge rates and the establishment of zero-rated EPPR charges amongst members of the vegetable and unprocessed potato industries.

The Office of Best Practice Regulation determined that the amendments would have a low impact on business and impose low compliance costs. Therefore, no further consultation in the form of a Business Cost Calculator or a Regulation Impact Statement was required for the amendments.

Operation

Details of the Amendment Regulations are set out below.

Regulation 1 specifies the name of the amendments to the Regulations as the Primary Industries (Customs) Charges Amendment Regulations 2011 (No. 2).

Regulation 2  provides that the Amendment Regulations commence on 1 January 2012.

Regulation 3 provides that Schedule 1 amends the Primary Industries (Customs) Charges Regulations 2000.

Schedule 1 Amendments

Item 1 inserts a new heading for Division 14.1 into Part 14 of Schedule 10 titled 'Product charge'. This Division covers the previously existing marketing and R&D charges for unprocessed potatoes. A new Division 14.2 titled 'Special purpose charges' has also been inserted by the Amendment Regulations (see Item 4). This covers the previously existing PHA charge and the newly prescribed EPPR charge that have been inserted by Item 5. The new divisions are consistent with those of other parts of Schedule 10 and assist in reading the legislation.

Item 2 amends the R&D charge rate on unprocessed potatoes specified under subclause 14.4 of Schedule 10. The item substitutes the previously existing R&D charge of 49 cents per tonne of unprocessed potatoes with a new rate of 48 cents per tonne. In conjunction with the increase of the PHA charge from 1 cent per tonne of unprocessed potatoes to 2 cents per tonne (see Item 5), Ausveg Limited, as the industry representative body for unprocessed potatoes, is able to meet increases in the unprocessed potato industry's PHA annual subscription fees without increasing the overall charge liability on the industry.

Item 3 omits the previous clause 14.4A of Schedule 10. This clause previously prescribed the PHA charge on unprocessed potatoes. This clause has been renumbered as clause 14.6 and moved to Division 14.2 as the PHA charge is a 'special purpose charge' (see Item 5). This assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10.

Item 4 inserts a new heading for Division 14.2 titled 'Special purpose charges'.  This covers the previously existing PHA charge and the newly prescribed EPPR charge that have been inserted by Item 5. This assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10.

Item 5 inserts new clauses 14.6 and 14.7 to deal with the PHA charge for unprocessed potatoes and imposes an EPPR charge on unprocessed potatoes.

New clause 14.6 imposes the PHA charge on unprocessed potatoes. This is not a new type of charge imposed on the unprocessed potato industry, as it was previously imposed by clause 14.4A of Schedule 10. Moving the PHA charge clause to this Division assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10. The wording of the new clause 14.6 is the same as in the previous clause 14.4A. However, the rate of PHA charge for unprocessed potatoes has been increased from 1 cent per tonne of unprocessed potatoes to 2 cents per tonne. This enables Ausveg Limited to meet the unprocessed potato industry's increase in PHA annual subscription fees. There is no overall increase in charge liability on the unprocessed potato industry as the R&D charge has been reduced by 1 cent per tonne of unprocessed potatoes (see Item 2).

Once the PHA annual subscription is paid, any further funds collected via the payment of the PHA charge under clause 14.6 will be automatically appropriated to the industry's R&D fund in accordance with section 7 of the Plant Health Australia (Plant Industries) Funding Act 2002. Ausveg Limited requested the changes to the unprocessed potato R&D and PHA charges in accordance with the Australian Government Levy Principles and Guidelines.

Item 5 also inserts a new clause 14.7 prescribing an EPPR charge on unprocessed potatoes. New subclause 14.7(1) prescribes 'unprocessed potatoes' as the commodity on which the EPPR charge is imposed for the purposes of clause 2 of Schedule 14 to the Charges Act. The EPPR charge applies only to unprocessed potatoes. New subclause 14.7(2) specifies a nil charge rate on unprocessed potatoes for the purposes of clause 5 of Schedule 14 to the Charges Act. The reasons for setting the rate at nil have been outlined above. New subclause 14.7(3) specifies that the charge on unprocessed potatoes is payable by the producer of the unprocessed potatoes for the purposes of clause 10 of Schedule 14 to the Charges Act.

Item 6 inserts a new heading for Division 17.1 into Part 17 of Schedule 10 titled 'Product charge'. This Division covers the existing marketing and R&D levies for vegetables. A new Division 17.2 titled 'Special purpose charges' has also been inserted by the Amendment Regulations (see Item 9). This covers the existing PHA charge and the newly prescribed EPPR charge that have been inserted by Item 10. The new divisions are consistent with those of other parts of Schedule 10 and assist in reading the legislation.

Item 7 amends the R&D charge rate on vegetables specified under subclause 17.5 of Schedule 10. The item substitutes the previously existing R&D charge rate of 0.4925% of the free onboard value of the vegetables immediately before export with a new rate of 0.485% of the free on board value of the vegetables immediately before export. In conjunction with the proposed increase of the PHA charge from 0.0075% of the free on board value of the vegetables immediately before export to 0.0150% of the free on board value of the vegetables immediately before export (see Item 10), Ausveg Limited as the industry representative body for vegetables, is able to meet increases in the vegetable industry's PHA annual subscription fees without increasing the overall charge liability on the industry.

Item 8 omits the previous clause 17.5A of Schedule 10. This clause previously prescribed the PHA charge on vegetables. This clause has been renumbered as clause 17.7 and moved to Division 17.2 as the PHA charge is a 'special purpose charge' (see Item 10). This assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10.

Item 9 inserts a new heading for Division 17.2 titled 'Special purpose charges'.  This covers the existing PHA charge and the newly prescribed EPPR charge that have been inserted by Item 10. This assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10.

Item 10 inserts new clauses 17.7 and 17.8 dealing with the PHA charge for vegetables and impose san EPPR charge on vegetables.

New clause 17.7 imposes the PHA charge on vegetables. This is not a new type of charge imposed on the vegetable industry, as it was previously imposed by clause 17.5A of Schedule 10. Moving the PHA charge clause to this Division assists in reading the legislation and sets out the numbering and divisions in line with other parts of Schedule 10. The wording of the new clause 17.7 is the same as in the previous clause 17.5A. However, the rate of charge in subclause 17.7(2) has been increased from 0.0075% of the free on board value of the vegetables immediately before export to 0.0150% of the free on board value of the vegetables immediately before export. This enables Ausveg Limited to meet the vegetables industry's increase in PHA annual subscription fees. There is no overall increase in charge liability on the vegetables industry as a corresponding decreased in the R&D charge has been decreased by 0.0075% of the free on board value of the vegetables immediately before export (see item 2).

Once the PHA annual subscription is paid, any further funds collected via the payment of the PHA charge under clause 17.8 will be automatically appropriated to the industry's R&D fund in accordance with section 7 of the Plant Health Australia (Plant Industries) Funding Act 2002. Ausveg Limited requested the changes to the vegetables R&D and PHA levies in accordance with the Australian Government Levy Principles and Guidelines.

Item 10 also inserts a new clause 17.8 to prescribe an EPPR charge on vegetables. New subclause 17.8 (1) prescribes 'vegetables' as the commodity on which the EPPR charge is imposed for the purposes of clause 2 of Schedule 14 to the Charges Act. New subclause 17.8(2) specifies a nil charge rate on vegetables for the purposes of clause 5 of Schedule 14 to the Charges Act. The reasons for setting the rate at nil have been outlined above. New subclause 17.8(3) specifies that the charge on vegetables is payable by the producer of the vegetables for the purposes of clause 10 of Schedule 14 to the Charges Act.

AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback