Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT REGULATIONS 2002 (NO. 1) 2002 NO. 3

STATUTORY RULES 2002 No. 3

Issued by the Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry

Primary Industries (Excise) Levies Act 1999

Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1)

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

Clause 5 of Schedule 5 of the Excise Act provides that, before making regulations for the purposes of this section, the Minister shall take into consideration any relevant recommendation made to the Minister by the growers' organisation.

Clause 1 of Schedule 5 provides that the grower's organisation means the organisation known as the Australian Cotton Growers' Research Association (ACGRA).

Clause 2 of Schedule 5 of the Excise Act imposes a levy on leviable cotton produced in Australia.

Clause 3 of Schedule 5 of the Excise Act provides that the rate of levy may be changed but shall not exceed $3.0267 per 227kg.

Nearly 95 per cent of Cotton Research and Development Corporation (CRDC) corporate expenditure is directed to research and development, with the remainder directed to corporate support, administration and management.

Section 30 of the Primary Industries and Energy Research and Development Act 1989 provides for research levy money to be paid to Research and Development Corporations. The cotton research levy has been attached to the CRDC since 1 October 1990.

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 per cent of the Gross Value of Production (GVP). Based on current ABARE estimates, this would be around $7million for 2001/02.

The ACGRA has requested an increase in the cotton levy rate from $1.75 per 227kg to $2.25 per 227kg for the 2001/02 season. The Amendment Regulations impose a new rate of $2.25 per 227kg consistent with the cotton industry organisation's recommendation. The new rate will apply from 1 March 2002 to ensure that it applies to all cotton picked in 2002.

The industry believes that it cannot rely on production increases to cover increasing research needs, particularly in several critical research areas required by the industry, including pest control and natural resource management. Based on current ABARE data, the proposed rate represents around 0.43% of calculated Gross Value of Production (GVP) for 2001-02.

Details of the Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) are at Attachment 1.

The regulations commence on 1 March 2002.

ATTACHMENT 1

Regulation 1 provides that the Regulations be known as the Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1).

Regulation 2 provides that the Regulations commence on 1 March 2002.

Regulation 3 provides for the Primary Industries Excise Levies Regulations 1999 to be amended as set out in Schedule 1.

Schedule 1

Clause 1 sets the operative rate of levy applicable to leviable cotton at $2.25 per 227kg. This represents an increase of 50 cents per 227kg bale.