Dairy Industry Stabilization Levy Regulations (Amendment)

EXPLANATORY STATEMENT

STATUTORY RULES 1983 No. 89

Issued by the Authority of the Minister of State for Resources and Energy for and on behalf of the Minister of State for Primary Industry

DAIRY INDUSTRY STABILIZATION LEVY REGULATIONS

(AMENDMENT)

The Dairy Industry Stabilization Levy Act 1977, which forms an integral part of the present marketing/stabilization arrangements for the dairy industry, provides for levies to be imposed on the production of prescribed dairy products.

Section 11 of the Act provides that the Governor-General may make regulations, inter alia, for the purpose of:

(a) prescribing a date from which levy is to be imposed with respect to each kind of dairy product under sub-section 6(1) and 6(2);

(b) fixing the operative rates of levy for each kind of dairy product under section 7;

(c) exempting from levy a minimum quantity of a specified kind of dairy product produced in a prescribed period and the exempting from levy of dairy products of a prescribed class under section 9.

Sub-section 11(3), however, requires the Governor-General to take into consideration any relevant recommendations made by the Australian Dairy Corporation as provided for in sub-section 11(2).

The purpose of the levies is to protect the domestic price structure for prescribed dairy products and through their disbursement, to provide each manufacturer with an equalised return from domestic and export sales of such products.

The rate of levy for each prescribed product is based on the difference between the domestic bulk wholesale price and the assessed average export price for that product. The assessed average export price is fixed by the Minister for Primary Industry under section 20AB(A) of the Dairy Produce Act 1924 being a price that the Minister considers will be an average export price for the prescribed product.

In accordance with sub-section 11(2) of the Dairy Industry Stabilization Levy Act 1977, the Australian Dairy Corporation, after consultation with the Australian Dairy Industry Advisory Committee, recommended to the Minister for Primary Industry increased levy rates to apply from 1 July 1983 which would have resulted in an increase in domestic bulk wholesale prices.

The Minister for Primary Industry has however determined that the domestic bulk wholesale prices should be maintained at their current levels from 1 July 1983. In making his decision on this matter, the Minister noted that an increase in domestic bulk wholesale prices would have been out of step with the realities of domestic and international dairy markets and would have given producers the wrong market signals.

Given changes in assessed export prices for prescribed dairy products, stabilization levies need to be amended even though the Minister has decided not to approve increases in domestic bulk wholesale prices for levy purposes from 1 July. In this regard, the Minister has approved the following rates of stabilization levy to apply from 1 July 1983:

* these rates remain unchanged from present levels.

The regulations provide for the continuation of the current exemption from levy under sub-section 9(1) and (2) of processed butteroil, where production does not exceed 30,000 tonnes, and of processed cheese, where production does not exceed 60,000 tonnes, during the year commencing on 1 July 1983.

The regulations are also being amended to update the existing regulations, where necessary, by replacing the year commencing 1 July 1982 with the year commencing 1 July 1983.