Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT (RED MEAT SLAUGHTER) REGULATION 2016 (F2016L01820)

Explanatory Statement

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

Primary Industries (Excise) Levies Act 1999

Primary Industries (Excise) Levies Amendment (Red Meat Slaughter) Regulation 2016

Legislative Authority

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

Purpose

The purpose of the Primary Industries (Excise) Levies Amendment (Red Meat Slaughter) Regulation 2016 (the Regulation) is to amend the rates of the marketing and research and development (R&D) levies paid on the slaughter of cattle, sheep, lambs and goats, while maintaining the overall rate imposed on levy payers.

Background

Statutory levies are currently applied on the slaughter of cattle, sheep, lambs and goats.

The funds raised are paid to the Australian Meat Processor Corporation (AMPC), as the declared meat processor research and marketing body under the Australian Meat and
Live-stock Industry Act 1997 (the AMLI Act), to commission R&D and marketing for the red meat processing industry. The rates of levy have not changed since they were imposed in 2007.

Legislation prescribes what each levy may be spent on and money cannot be transferred between the R&D and marketing funds. AMPC has accumulated substantial reserves of R&D funds and is facing a shortfall in marketing funds. To address this, the Australian Meat Industry Council (AMIC), the prescribed industry body under the Australian Meat and Live-stock Industry Act 1997, submitted a proposal to the Deputy Prime Minister and Minister for Agriculture and Water Resources requesting an increase in the amount of levy collected for marketing, with a corresponding decrease in the levy amount collected for R&D. The overall amount of levy paid will stay the same.

Impact and Effect

The Regulation amends the levy rates in two phases. From 1 January 2017 until 30 June 2018, the R&D components of the red meat slaughter levies will be set to zero (paused) with the marketing components of the levies commensurately increased. From 1 July 2018, the rates for each of the slaughter levies will be set to reflect a 60:40 split between R&D and marketing. These latter rates, compared to the existing rates, are estimated to direct $1.1 million annually from R&D to marketing. The 60:40 split was determined from modelling done by AMPC based on its long term average levy revenue of $16.75 million, its current reserves and planned expenditure over a five year period.

The Regulation does not impose any greater rate of levy on levy payers but will provide AMPC with additional funding for its marketing programs. AMPC will utilise a portion of its R&D reserves to continue R&D expenditure during the time the R&D levies are paused.

The Department of Agriculture and Water Resources worked with AMIC, as it developed its proposal for the red meat slaughter levies. AMIC consulted extensively with levy payers and AMPC in developing its proposal. A vote, conducted by the Australian Electoral Commission, resulted in majority support for the proposal. The Australian Government Levy Principles and Guidelines provide that an objection period be advertised following a positive vote on the levy proposal. No objections to AMIC's proposal were received.

The Office of Best Practice Regulation was consulted in the preparation of the Regulation (ID 20899).

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

The Regulation is 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 Regulation is a legislative instrument for the purposes of the Legislation Act 2003.

Attachment A

Details of the Primary Industries (Excise) Levies Amendment (Red Meat Slaughter) Regulation 2016

Section 1 - Name

This section provides that the name of the Regulation is the Primary Industries (Excise) Levies Amendment (Red Meat Slaughter) Regulation 2016.

Section 2 - Commencement

This section provides for that Schedule 1 of the Regulation will commence on 1 January 2017 and Schedule 2 of the Regulation will commence on 1 July 2018.

Section 3 - Authority

This section provides that the Regulation is made under the Primary Industries (Excise) Levies Act 1999.

Section 4 - Schedules

This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed 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 commencing 1 January 2017

Item 1 amends the marketing rate of the beef production (slaughter) rate from 0.2 of a cent per kilogram to 0.6 of a cent per kilogram.

Item 2 amends the research rate of the beef production (slaughter) rate from 0.4 of a cent per kilogram to 0.0 of a cent per kilogram.

Item 3 amends the marketing rate of the live-stock slaughter (sheep) rate from 6 cents per head to 15 cents per head.

Item 4 amends the research rate of the live-stock slaughter (sheep) rate from 9 cents per head to 0 cents per head.

Item 5 amends the marketing rate of the live-stock slaughter (lamb) rate from 7 cents per head to 16 cents per head.

Item 6 amends the research rate of the live-stock slaughter (lamb) rate from 9 cents per head to 0 cents per head.

Item 7 amends the marketing rate of the live-stock slaughter (goat) rate from 3 cents per head to 10 cents per head.

Item 8 amends the research rate of the live-stock slaughter (goat) rate from 7 cents per head to 0 cents per head.

Schedule 2 - Amendments commencing 1 July 2018

Item 1 amends the marketing rate of the beef production (slaughter) rate from 0.6 of a cent per kilogram to 0.24 of a cent per kilogram.

Item 2 amends the research rate of the beef production (slaughter) rate from 0.0 of a cent per kilogram to 0.36 of a cent per kilogram.

Item 3 amends the marketing rate of the live-stock slaughter (sheep) rate from 15 cents per head to 6 cents per head.

Item 4 amends the research rate of the live-stock slaughter (sheep) rate from 0 cents per head to 9 cents per head.

Item 5 amends the marketing rate of the live-stock slaughter (lamb) rate from 16 cents per head to 6.4 cents per head.

Item 6 amends the research rate of the live-stock slaughter (lamb) rate from 0 cents per head to 9.6 cents per head.

Item 7 amends the marketing rate of the live-stock slaughter (goat) rate from 10 cents per head to 4 cents per head.

Item 8 amends the research rate of the live-stock slaughter (goat) rate from 0 cents per head to 6 cents per head.

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 Amendment (Red Meat Slaughter) Regulation 2016

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 Regulation amends the rates of the marketing and research and development (R&D) components of the statutory levies that are applied to the slaughter of cattle, sheep, lambs and goats. It will increase the amount of funds collected for industry marketing with a commensurate decrease in the R&D collection. The funds are paid to the Australian Meat Processor Corporation to commission industry marketing and R&D.

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