EXPLANATORY STATEMENT

 

Select Legislative Instrument 2008 No. 249

 

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

 

Primary Industries (Excise) Levies Act 1999

Primary Industries (Excise) Levies Amendment Regulations 2008 (No. 5)

 

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 to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

The rice research and development (R&D) levy provides a revenue stream for the rice R&D program, which is administered by the Rural Industries Research and Development Corporation (RIRDC). A small component of the R&D levy is directed towards paying the Plant Health Australia (PHA) subscription fee. The rice industry is facing a sixth year of significant drought related production downturns, which have placed financial pressures on the R&D program and on the capacity to meet the annual PHA subscription fees, due to subsequent reductions in levy revenue.

 

Clause 6 of Schedule 23 to the Act provides that the Minister must not specify a rate of levy unless the rate has been recommended by the relevant rice industry body. The Ricegrowers’ Association of Australia (RGA) is specified as a rice industry body for this purpose.

 

The Regulations implement changes requested by the RGA, in consultation with the rice industry, to the rate of the rice R&D levy. Over a six week period the RGA consulted broadly within the rice industry on the changes to the rice R&D and PHA levy rates. The RGA is well placed to consult with all participants of the rice industry because of the small geographic spread of growers and the near full grower membership of the RGA.

 

On 1 January 2006 the rice R&D levy rate was increased from $1.97 to $2.97 per tonne for a period of three years, to sustain the rice R&D program throughout the drought. The PHA component of the levy remained at $0.03 per tonne, bringing the total levy to $3.00 per tonne. This followed a request from industry to increase the operative levy rate to ensure adequate funding was maintained for core R&D activities, like plant breeding. The levy was due to revert to the previous rate of $1.97 per tonne for R&D and $0.03 for PHA on 1 January 2009.

 

The purpose of the Regulations is to maintain the increased rate of the rice R&D levy for a further three years to assist the rice industry to continue to meet its financial commitments during the continuing drought. The rice industry has been under financial pressure since 2003 and the industry has not been able to meet its annual PHA subscription for three of the past four years. The Regulations increase the rice PHA levy component to $0.06 to ensure the subscription fees are met. The rice R&D levy rate is set at $2.94 per tonne.

 

The Regulations provide that the rice R&D levy of $2.94 per tonne sunset by
1 January 2012, reverting the rate back to the pre 2006 level of $1.97 per tonne. The Regulations also provide that the PHA component of the levy of $0.06 per tonne would revert to $0.03 per tonne as of 1 January 2012.

 

The Regulations are not intended to broaden the imposition of the current rice levy.

 

The Office of Best Practice Regulation was consulted in the preparation of these Regulations (ID 9934).

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

 

The Regulations commence on 1 January 2009.

Details of the Regulations are provided in the Attachment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATTACHMENT

Details of the Primary Industries (Excise) Levies Amendment Regulations 2008 (No. 5)

Regulation 1 - Name of Regulations

This regulation provides for the title of the Regulations to be the Primary Industries (Excise) Levies Amendment Regulations 2008 (No. 5).

Regulation 2 - Commencement

This regulation provides for the Regulations to commence on 1 January 2009.

Regulation 3 – Amendment of Primary Industries (Excise) Levies Regulations 1999

This regulation provides for the Primary Industries (Excise) Levies Regulations 1999 to be amended as set out in Schedule 1.

Schedule 1 - Amendment

Item 1 substitutes Schedule 23, Part 1, paragraph 2 (b), specifying the new rate of the rice research and development levy. The rate is $2.94 per tonne of rice, on or after
1 January 2009 and before 1 January 2012. The specified rate of the rice research and development levy will revert to $1.97 per tonne of rice on or after 1 January 2012.

Item 2 omits the words “is 3 cents per tonne of rice” which refers to the rate of the Plant Health Australia component of the levy. The item inserts a new rate for the Plant Health Australia levy. The rate is $0.06 per tonne of rice, on or after 1 January 2009. The specified rate of the Plant Health Australia levy will revert to $0.03 per tonne of rice on or after 1 January 2012.