Commonwealth Numbered Regulations - Explanatory Statements

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PRIMARY INDUSTRIES (EXCISE) LEVIES (VEGETABLE) REGULATIONS 1999 1999 NO. 306

STATUTORY RULES 1999 No. 306

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

Primary Industries Levies and Charges Collection Act 1991

Primary Industries (Customs) Charges Act 1999

Primary Industries (Excise) Levies Act 1999

Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1)

Primary Industries (Excise) Levies (Vegetable) Regulations 1999

Primary Industries (Customs) Charges (Vegetable) Regulations 1999

Section 3 0 of the Primary Industries Levies and Charges Collection Act 1991, Section 8 of the Primary Industries (Excise) Levies Act 1999 and Section 8 of the Primary Industries (Customs) Charges Act 1999 provide that the Governor-General may make regulations necessary or convenient to be prescribed for carrying out or giving effect to the Acts.

The purpose of the regulations is to continue the levy imposed by the original regulations, while removing an unforseen anomaly in the original regulations. The intention of the original regulations was that the levy be assessed on the farm gate value of the fresh product, however the wording of the regulations meant that growers who processed their product would be assessed on the value after processing.

The vegetable levy was imposed and collected under the framework of the Horticultural Levy Act 1987, the Horticultural Export Charge Act 1987 and the Primary Industries Levy and Charges Collection Act 1991. The two former Acts were repealed with effect 1 July 1999.

Since 1 March 1996 the vegetable levy regulations have implemented the imposition of an ad valorem. levy at the first point of sale and an export charge on vegetables to raise funds for research and development through the Horticultural Research and Development Corporation (HRDC).

The vegetable levy was imposed at the first point of sale on the basis that this is as close an approximation as possible to the 'farm gate value' of the product. However, when the levy is imposed at the first point of sale for vertically integrated organisations, which grow and process their own vegetables, the levy is imposed on a much value-added product as a consequence of the processing.

The amendments to the vegetable levy regulations recognise growers/processors who process vegetables and where there is no sale prior to the harvested product being converted into another good. For these purposes a definition of "processing" was created to include canning, bottling, freezing, cooking, pickling, roasting, dehydrating or any other treatment which alters the original product from its natural state.

In instances where the equivalent raw vegetable is also sold in the market place, the sale price of the equivalent marketed product is proposed as the value for levy calculation purposes. Where it is not feasible to use a surrogate market price, the calculation of levy payable will be based on data from the organisation's financial records to substantiate the basic product value prior to processing, using the Australian Accounting Standards calculation of Cost of Goods Sold.

The regulations also update definitions and references to the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also amend or omit regulations for inclusion in regulations under the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also update the definition of the levy year.

The Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group (Ausveg) requested, and the Horticultural Research and Development Corporation (HRDC) recommended, the change in the vegetable levy. Copies of advice from Ausveg and HRDC are attached (Attachment A and B respectively).

The proposed regulations give effect to the recommendations of the industry/Corporation's proposal.

Levy payers who both grow and process their own vegetables will benefit from the retrospectivity of the proposed changes. In accordance with S48 of the Acts Interpretations Act, 1901, no levy payer is expected to be adversely affected by the changes. Growers who sell their product unprocessed will not be affected by these changes.

The regulations are taken to have commenced on 1 July 1999.