Dairy Industry Stabilization Levy Regulations (Amendment)

EXPLANATORY STATEMENT

STATUTORY RULES 1982 No. 159

Issued by the Authority of the Minister of State for Home Affairs and Environment 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 marketing 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) exempting from levy any prescribed variety of cheese under section 5;

(b) 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);

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

(d) 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 Australian Dairy Corporation, after consultation with the Australian Dairy Industry Advisory Committee, has recommended that Monterey cheese be removed from the schedule of levy exempt cheeses, because it is considered production has risen to a point where it could adversely affect sales of leviable cheeses.

The Corporation has recommended that Gouda cheese be exempt from levy on the grounds that it is not strictly competitive with Cheddar and exports of Gouda cheese are no longer significant.

The regulations provide for the removal of Monterey as a variety of cheese exempted from levy and inclusion of Gouda as a variety exempt from levy under section 5 of the Act, from 1 July 1982.

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.

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, has recommended levy rates to apply from 1 July 1982.

The purpose of the proposed regulations is to impose, from 1 July 1982, the following rates of levy:

The rates of levy for butter, butteroil, processed butteroil and processed cheese are not varied.

However, the assessed average export prices for all prescribed products except skimmilk powder/buttermilk powder/mixtures are to be increased for the 1982/83 season. The rates of levy recommended will provide, therefore, for an increase in the domestic bulk wholesale prices of $150 per tonne for butter; $140 per tonne for cheese; $105 per tonne for whole milk powder; $65 per tonne for skimmilk powder, modified skimmilk powder, buttermilk powder and skimmilk and buttermilk powder mixture; and $130 per tonne for casein.

The regulations also provide for the continuation of the current exemption from levy under sub-sections 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 1982.

In considering the rates of levy for prescribed dairy products, the Australian Dairy Corporation undertook a review of the current domestic bulk wholesale prices for the respective products. The Corporation considered that the domestic market could bear the above price increases without materially affecting current consumption and that the price increases were needed to ensure that increased farm costs

could be met.