Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES LEVIES AND CHARGES COLLECTION AMENDMENT (TEA TREE OIL) REGULATIONS 2017 (F2017L00570)

Explanatory Statement

Issued by Authority of the Deputy Prime Minister and Minister for Agriculture and Water Resources

Primary Industries Levies and Charges Collection Act 1991

Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017

The Primary Industries Levies and Charges Collection Act 1991 (the Collection Act) rationalises levy and charge collection, and provides for the efficient and effective collection of primary industry levies and charges.

Section 30 of the Collection Act provides that the Governor-General may make regulations: prescribing matters required or permitted by the Collection Act; or necessary or convenient to be prescribed for carrying out or giving effect to the Collection Act.

The purpose of the Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017 (the Regulations) is to outline the mechanism for collecting a research and development (R&D) and emergency plant pest response (EPPR) levy and charge from the tea tree oil industry.

R&D activities to support the tea tree oil industry are currently funded from voluntary contributions from tea tree oil producers, and the industry's R&D program is administered by the Rural Industries Research and Development Corporation (RIRDC). The program has contributed to a doubling of plantation yield, efficacy research, market access, and increased efficiency in harvesting, distillation and storage. RIRDC proposes to continue to administer the R&D program using an industry-based advisory panel to make recommendations on the investment of available funds.

Rather than relying on voluntary industry contributions to R&D, establishing a statutory tea tree oil R&D levy and charge ensures that all tea tree oil producers invest equitably in R&D. A statutory levy and charge also provides the tea tree oil industry with greater certainty about the amount of revenue that will be collected and will enable forward-year planning to deliver priority R&D for the benefit of the whole industry. The overall increase in investment in R&D allows industry to receive the benefits of additional Commonwealth matching payments for R&D expenditure.

The Regulations will enable levies and charges to be collected from tea tree oil producers, including those producers that do not currently voluntarily contribute to the industry's investment in tea tree oil R&D. The imposition of levies and charges on tea tree oil will ensure that tea tree oil producers contribute proportionately to the statutory levy scheme based on their level of participation in the industry. The Regulations will allow for the tea tree oil industry to invest in R&D projects that span the short to long term to improve the profitability, sustainability and international competitiveness of the Australian tea tree oil industry.

The Regulations define who producers are, how levies and charges are to be collected, and requirements for lodging levy returns. The Regulations also stipulate what records relating to levies and charges paid must be kept and that an offence against those provisions is an offence of strict liability.

The inclusion of a strict liability offence for record keeping is in line with the principles set out in 'A guide to framing Commonwealth offences, infringement notices and enforcement powers'. This provision is likely to enhance the effectiveness of the enforcement regime, as record keeping would be essential to ensure that levies and charges are paid by producers at the correct rates. Strict liability for this purpose would ensure that the levy and charge is collected on an equitable basis, which is a key objective of imposing mandatory levies and charges. The offence is 10 penalty units, and therefore meets the requirement that the fine does not exceed 60 penalty units for an individual. Producers will be advised of the record keeping requirements so they can guard against the possibility of any contravention.

The Australian Tea Tree Industry Association (ATTIA) and the majority of potential levy payers support the introduction of an R&D levy and charge, and an EPPR levy and charge. ATTIA undertook a detailed consultation process on the levies and charges in 2016, including an independent postal ballot, to consult all known and potential levy and charge payers. Ninety-six per cent of voters supported the introduction of an R&D levy and charge, and ninety-four per cent of voters supported the introduction of an EPPR levy and charge.

The Office of Best Practice Regulation (OBPR) was consulted on the introduction of a tea tree oil R&D and EPPR levy and assessed the Regulation Impact Statement (RIS). On 31 March 2017, the OBPR assessed the RIS as being compliant with Government requirements. The OBPR reference number for this assessment is 21687.

Details of the proposed Regulations are set out in Attachment A.

The proposed Regulations are compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

Attachment A

Details of the Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017

Section 1 - Name

This section provides that the name of the Regulations are the Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017.

Section 2 - Commencement

This section provides for the Regulations to commence on 1 July 2017.

Section 3 - Authority

This section provides that the Regulations are made under the Primary Industries Levies and Charges Collection Act 1991.

Section 4 - Schedules

This section provides that the Regulations are amended as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 - Amendments

Item 1 inserts a new Part 13 relating to tea tree oil into the Primary Industries Levies and Charges Collection Regulations 1991. Notes on the individual sections are set out below.

Part 13 - Tea tree Oil

13.1  Application

This part only applies to tea tree oil on which levy or charge is imposed.

13.2  Definitions

This clause provides the following definitions:

charge means the R&D and EPPR charges imposed by the Primary Industries (Customs) Charges Regulations 2000.

half-year means a period of 6 months ending on the last day of June or the last day of December.

levy means the R&D and EPPR levies imposed by the Primary Industries (Excise) Levies Regulations 1999.

personal details include a person's full name; business or residential address; ABN (if any); and ACN (if the person is a company but does not have an ABN).

retail sale means the domestic sale of tea tree oil by a producer that does not include a sale to a first purchaser or a sale through a selling, buying or exporting agent.

tea tree oil means oil that is distilled from Melaleuca alternifolia, in accordance with Australian Standard AS 2782-1997, as in force at the commencement of this Part.

13.3  What is a levy year

This clause specifies that, for the purpose of tea tree oil levies and charges, references to a levy year mean a financial year.

13.4  Who is a producer

This clause defines a producer of tea tree oil (where levy is imposed) as the person who owns the tea tree oil immediately before it is first sold in Australia and (where charge is imposed) as the person who owns the tea tree oil immediately before it is exported.

13.5  Liability of intermediaries for charge - exporting agents

This clause makes exporting agents liable for payment of charges on tea tree oil, where imposed under the Primary Industries (Customs) Charges Regulations 2000. The amount to be paid would be equal to the charge and any late payment penalty relating to that charge.

13.6  When levy or charge is due for payment - people who lodge half-yearly returns

This clause outlines when payment of levy or charge is due to be made. Penalties for late payment are outlined in the Primary Industries Levies and Charges Collection Act 1991.

13.7  Who must lodge a half-year return

In a given half-year, this clause requires a producer who sells tea tree oil by retail sale on which levy is imposed and who exports tea tree oil on which charge is imposed (for which there is no intermediary involved) to lodge a return for the half-year.

In a given half-year, this clause also requires a producer who exports tea tree oil on which charge is imposed (for which there is no intermediary involved) and who does not sell tea tree oil by retail sale to lodge a return for the half-year.

Where an intermediary buys, sells or exports tea tree oil on which levy or charge is imposed in a given half-year, the intermediary must lodge a return for the half-year.

13.8  When a half-year return must be lodged

This clause defines the period during which a return for a half-year should be lodged.

13.9  When a levy is due for payment - producers who lodge annual returns

This clause states when tea tree oil levy is to be paid by producers who lodge annual returns.

13.10  Who must lodge an annual return

This clause states that an annual levy return must be lodged by a producer who sells tea tree oil on which levy is imposed by retail sale but does not export tea tree oil on which charge is imposed.

13.11  When an annual return must be lodged

This clause defines the period during which an annual return must be lodged.

13.12  What must be included in half-year and annual returns

This clause outlines what information is required to be included in a return for a half-year or levy year.

13.13  What records must be kept

This clause outlines what records a person who is required to lodge returns must keep. This clause also includes a strict liability offence for a person that does not keep records in a way that complies with the requirement.

Attachment B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017

This Legislative Instrument 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 Legislative Instrument

The purpose of the Primary Industries Levies and Charges Collection Amendment (Tea Tree Oil) Regulations 2017 are to outline the mechanism for collecting a research and development, and emergency plant pest response levy and charge from the tea tree oil industry.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

The Hon. Barnaby Joyce MP

Deputy Prime Minister and Minister for Agriculture and Water Resources