EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 106
Issued by Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry
Agricultural and Veterinary Chemical Products (Collection of Levy) Act 1994
Agricultural and Veterinary Chemical Products (Collection of Levy) Amendment Regulations 2006 (No. 1)
Section 39 of the Agricultural and Veterinary Chemical Products (Collection of Levy) Act 1994 (the Act) provides, in part, 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.
Subsection 12C(1) of the Act provides that the amount of levy payable under section 12B in respect of disposals of a chemical product during the 2005-2006 and later financial years is calculated with a rate of levy prescribed by the regulations. Subsection 12C(2) of the Act provides that the regulations may prescribe different rates of levy for different volumes of leviable disposals that take place during a financial year.
Current levy rates are prescribed in Agricultural and Veterinary Chemical Products (Collection of Levy) Regulations 1995 (the Regulations) at regulation 6A as follows:
(a) the rate of 0.9% for the first $1 million of leviable disposals or part thereof;
(b) the rate of 0.55% for any amount in excess of the first $1 million of leviable disposals up to and including $5 million;
(c) the rate of 0.4% for any amount in excess of $5 million of leviable disposals.
The current levy rates were introduced under new Australian Pesticides and Veterinary Medicines Authority (APVMA) cost recovery arrangements in mid 2005 which followed an extensive period of consultation with stakeholders and the release of several Cost Recovery Impact Statements. The new arrangements were developed in accordance with Government cost recovery principles and reflected specific recommendations endorsed by the Primary Industries Standing Committee.
The current levy rates were set to allow APVMA to reconstitute its Financial Reserve, which had been depleted due to reduced revenue caused by falling agricultural and veterinary (agvet) chemical sales as a result of the drought.
During the consultation process that took place as part of the development of the new cost recovery arrangements stakeholders, were advised that, once the Financial Reserve was reconstituted, the levy rate would be adjusted downwards to allow expenditure and revenue to balance.
The APVMA has advised that, as a result of a continued strong focus on expenditure control and improving agvet chemical sales the Financial Reserve will be reconstituted by 1 July 2006. Accordingly, the APVMA Board proposed to, and received endorsement from, the Product Safety and Integrity Committee to vary the levy rate down by 0.10% for each of the three current tiers. This is in keeping with the commitment given to stakeholders during the fees review consultations.
The Regulations prescribe the following rates of levy for different volumes of leviable disposals that take place during the 2006/2007 financial year and each succeeding financial year:
a) the rate of 0.8% for the first $1 million of leviable disposals or part thereof;
b) the rate of 0.45% for any amount in excess of the first $1 million of leviable disposals up to and including $5 million;
c) the rate of 0.3% for any amount in excess of $5 million of leviable disposals
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations will commence on 1 July 2006.
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Overview
The Agricultural and Veterinary Chemical Products (Collection of Levy) Amendment Regulations 2006 (No. 1) were enacted to amend the Agricultural and Veterinary Chemical Products (Collection of Levy) Regulations 1995 in response to the Australian Pesticides and Veterinary Medicines Authority's (APVMA) need to adjust the cost recovery rates for the collection of levies on agricultural and veterinary chemicals. Enacted by authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, these regulations were introduced to reflect the APVMA's successful management of their financial reserves, which had been impacted by the drought conditions leading to reduced sales of agricultural and veterinary chemicals. The new regulations aim to balance the APVMA's expenditure and revenue by lowering the levy rates as per the commitments made to stakeholders during the cost recovery impact consultations. This adjustment ensures that the APVMA can continue its operations effectively while maintaining fair and manageable financial arrangements for stakeholders.
Scope and Application
The Agricultural and Veterinary Chemical Products (Collection of Levy) Amendment Regulations 2006 (No. 1) applies to entities involved in the disposal of agricultural and veterinary chemical products within Australia. These entities include manufacturers, importers, and distributors of such products, who are subject to the levy rates prescribed by the Act. The regulations are designed to facilitate the collection of levies as part of the cost recovery arrangements for the Australian Pesticides and Veterinary Medicines Authority (APVMA). The Act operates on a national level, applying across all states and territories of Australia, thereby ensuring a uniform approach to levy collection. The Regulations, which are subordinate instruments of the Act, extend and detail the application of the levy, specifying the rates for different financial years and volumes of disposals. Notably, these regulations do not specify any exclusions or exemptions from the levy, indicating that all eligible entities are subject to the prescribed rates. The adjustments in levy rates reflect the APVMA's goal to balance expenditure and revenue following the reconstitution of its Financial Reserve.
Key Provisions
The Agricultural and Veterinary Chemical Products (Collection of Levy) Amendment Regulations 2006 (No. 1) amend the Agricultural and Veterinary Chemical Products (Collection of Levy) Regulations 1995 (the Regulations) by introducing new levy rates for leviable disposals of agricultural and veterinary chemical products from the 2006/2007 financial year onwards. These rates are set out in regulation 3 of the Amendment Regulations and are intended to reflect the Australian Pesticides and Veterinary Medicines Authority's (APVMA) reconstitution of its Financial Reserve, which had been depleted due to reduced revenue from chemical sales during the drought period (Section 39 and regulation 3). The new levy rates are structured in three tiers: 0.8% for the first $1 million of leviable disposals, 0.45% for any amount in excess of the first $1 million up to $5 million, and 0.3% for any amount in excess of $5 million.
The obligations under the amended Regulations require entities involved in the disposal of agricultural and veterinary chemicals to comply with the new levy rates as prescribed. These entities must calculate and remit the appropriate levy based on the volume of chemical products disposed of during the financial year, ensuring that they adhere to the tiered rates outlined in regulation 3. This includes maintaining accurate records of disposals and the corresponding levies paid, as well as reporting these details to the relevant authorities as required.
Failure to comply with the new levy rates set forth in the Amendment Regulations can result in significant consequences. The Act provides that any person who fails to comply with the regulations may be subject to penalties. The exact nature of these penalties is not specified in the explanatory statement, but generally, breaches of regulations under the Act could lead to financial penalties, enforcement actions, or even legal proceedings. The severity of the penalties would depend on the specific nature and extent of the non-compliance, with potential maximum penalties varying according to the particular regulatory context and any applicable administrative or judicial decisions.