Primary Industries (Customs) Charges Amendment (Dairy Cattle Export Charge) Bill 2020 - Commentary on Ministerial Responses [2020] AUSStaCSBSD 124 (6 August 2020)

• Primary Industries (Customs) Charges Amendment (Dairy Cattle Export Charge) Bill 2020
• Charges in delegated legislation 35

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Primary Industries (Customs) Charges Amendment (Dairy Cattle Export Charge) Bill 2020

Purpose	This bill seeks to authorise the imposition of primary industries charges that are duties of customs, expanding existing provisions relating to the export of cattle other than dairy cattle
Portfolio	Agriculture, Water and the Environment
Introduced	House of Representatives on 13 May 2020
Bill status	Before the House of Representatives

Charges in delegated legislation ^[35]

2.110 In Scrutiny Digest 7 of 2020 the committee requested the minister's advice as to whether a maximum rate of charge that may be imposed on the export of dairy cattle can be included on the face of the bill.^[36]

Minister's response^[37]

2.111 The minister advised:

In paragraph 1.98 of the Scrutiny Digest 7 of 2020 (the Digest), the Committee has requested my advice as to whether a maximum rate of charge that may be imposed on the export of dairy cattle can be included on the face of the Bill.
I acknowledge the scrutiny view of the Committee that it is for the Parliament rather than makers of delegated legislation, to set a rate of tax (paragraph 1.94 refers). Also, that where charges are to be prescribed by regulation, the Committee considers that a maximum charge should be provided on the face of the primary legislation, to enable greater parliamentary scrutiny.
However, in this particular instance, I consider that it is not appropriate or necessary that a maximum charge be specified on the face of the primary legislation because:

• The setting of charges in this particular context (primary industries) is industry-driven rather than determined by government. Primary industries are responsible for determining whether to pay a levy/charge, what the levy/charge is imposed on and the purposes for which it is used, as well as recommending what the levy/charge is set at. As a result of the industry-driven nature of the levies system, there is a greater, need for flexibility and efficient responses to industry demands. Such flexibility and efficiency would be undermined by the inclusion of a maximum charge in the primary legislation; and

• The legislation already includes specific safeguards to ensure that arbitrary increases do not occur. In effect, the maximum charge rate that can be imposed will be the rate that is requested by the charge payers themselves, ensuring that charge amounts are not increased in an excessive or undue manner. This provides an appropriate check on power to set rates in delegated legislation, while achieving necessary flexibility and efficiency for industry research and development.

These points are further elaborated on below.
Industry driven levy system
The primaries industries levy and charge system is a partnership between, government and industry. Primary industries levies and charges are imposed at the request of industry, to allow the relevant primary producers to collectively invest in research and development (R&D) and marketing, biosecurity and residue testing. Primary industries are responsible for determining whether to pay a levy, what the levy is imposed on and the purposes for which it is used. The government's levies policy and the industry-driven process for establishing a levy is set out in the 2009 Levy Principles and Guidelines. (https://www.agriculture.gov.au/ag-farm-food/levies/publications)
Each R&D and marketing component of a primary industries levy or charge is attached to one of the 15 rural research and development corporations (RDCs). The dairy cattle export charge would be attached to Livecorp, the RDC responsible for the livestock export sector. The Australian Government strongly supports this world-leading system. In 2018-19 industry and government invested over $800 million in the RDCs through levies and matching payments. This comprised over $500 million in levy payments disbursed for R&D and marketing and almost $300 million of matching payments.
In 2013, most maximum primary industries charge rates were repealed from the Primary Industries (Customs) Charges Act 1999, by the Primary Industries (Customs) Amendment Act 2013.
The justification for this amendment is set out in the Explanatory Memorandum for the Primary Industries (Customs) Amendment Bill 2013:
Under the current process, if the government approves a change to a charge rate, the relevant regulations must be amended to impose the new rate. If the proposed charge is above the maximum rate, the Act must also be amended. As amending primary legislation is a lengthy process, the new rate may not come into effect until years after the industry has voted in favour of the change. The delay reduces the responsiveness of the industry and limits the ability of the RDC to provide the level of service needed by the industry.
Existing Safeguards
There are existing safeguards in place to ensure the levy cannot be increased above the $6 per head requested by industry. Before the Governor-General makes regulations prescribing a charge amount in regulations, the Minister must take into account any relevant recommendation made to the Minister by Livecorp. Subclause 5(5) of Schedule 2 to the Primary Industries (Customs) Charges Act 1999 specifies that the charge rate cannot be greater than the amount recommended to the relevant Minister by that body.
This safeguard ensures that arbitrary increases do not occur. In effect, the maximum charge rate that can be imposed will be the rate that is requested by the charge payers themselves, ensuring that charge amounts are not increased in an excessive or undue manner.
This safeguard was also inserted by the Primary Industries (Customs) Amendment Bill 2013. The Bill received cross-party support in Second Reading speeches about the Bill, particularly in light of this safeguard feature.
Consistency across the agricultural levy system
The Bill does not impose a maximum rate to be set in the primary legislation, which reduces both complexity and regulatory burden while supporting agricultural industries' ability to effectively increase its levy investment. In this regard it is in keeping with the spirit of the Attorney General's Clearer Law principles. The government is currently consulting on changes to streamline and modernise agricultural levies legislation in response to sunsetting requirements which will seek amongst other aims, to ensure the legislative scheme is aligned with the Clearer Law principles.
Therefore in the light of all of the above, I advise that it would not be appropriate in this case for the maximum charge to be specified in the primary legislation.

Committee comment

2.112 The committee thanks the minister for this response. The committee notes the minister's advice that the setting of charges in this particular context (primary industries) is industry-driven rather than determined by government. The committee also notes the advice that the maximum charge rate that can be imposed will be the rate that is requested by the charge payers themselves, ensuring that charge amounts are not increased in an excessive or undue manner.

2.113 While the committee welcomes this advice, from a scrutiny perspective, the committee remains concerned that a fixed maximum charge is not specified on the face of the primary legislation. The committee considers that inclusion of a fixed maximum charge would ensure that there is appropriate parliamentary oversight of the rate of the charge. The committee also takes this opportunity to further emphasise that it does not generally consider consistency with existing provisions to be sufficient justification for including significant matters in delegated legislation.

2.114 The committee leaves to the Senate as a whole the appropriateness of allowing the rate of the dairy cattle export charge to be set out in delegated legislation, without specifying a fixed maximum charge on the face of the primary legislation.

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[35] Schedule 1. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).

[36] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2020, pp. 26-27.

[37] The minister responded to the committee's comments in a letter dated 22 June 2020. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 9 of 2020 available at: www.aph.gov.au/senate_scrutiny_digest