EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO. 24
Issued by the authority of the Minister for Primary Industry
DAIRY PRODUCE LEVY REGULATIONS (AMENDMENT)
The purpose of the amendments is to set the operative rates of product levies imposed on domestic sales of butter, butteroil and cheese by section 10 of the Dairy Produce Levy (No. 1) Act 1986 (“the Act”) for each of the six month periods from 1 July 1987 to 31 December 1989. Under section 10 of the Act the operative rates of levy in respect of each product are such as are for the time being prescribed. Current rates of levy are set by regulation 6 of the Dairy Produce Levy Regulations.
The Act is part of a package of legislation which commenced on 1 July 1986 the purpose of which is to establish new marketing and assistance arrangements for the Australian dairy industry. The main aim of the new arrangements is to place the industry on a more market oriented basis. One of the strategies to achieve this aim is to reduce the amount of assistance provided to the industry to a level such that the industry can defend itself in the Australian market on the basis of its competitiveness.
This involves the progressive reduction in domestic price support to a level no higher than the price level at which New Zealand dairy products could be sold in Australia on a fair trade basis.
Because the old marketing arrangements provided assistance well above the target level a scheme was incorporated in the new arrangements to enable progressive reduction of assistance and thus a gradual phasing in of the new price levels that flow from the principles of the arrangements. The scheme involves the imposition of levies on the domestic sales of butter, butteroil and cheese and the utilisation of the proceeds of the levies to make supplementary market support payments on the export of dairy products. Payment of these supplementary market support payments increases the theoretical domestic prices for dairy products and thus provides a higher level of assistance than would otherwise be available under the marketing arrangements. The initial rates of levy were calculated in such a way as to maintain at least the level of assistance provided to the industry immediately prior to the commencement of the new arrangements.
The phasing in of the new price levels involves the progressive reduction of the levies on butter, butteroil and cheese and hence the amounts of supplementary market support payments. The reductions in levies embodied in the Regulations are designed to achieve this process.
At the time of introduction of the new dairy marketing legislation in May 1986 there was general agreement by the industry to such a reduction in assistance levels. The policy and program for phasing out the levies on dairy products were enunciated in the second reading speech on the Bill for the Act, viz
“The levies imposed on dairy products are to be reduced over time. Levies imposed on 1 July 1986 will be maintained at their initial value throughout 1986-87 and then reduced in six monthly steps. The first reduction will occur on 1 July 1987. The intention is that all levies other than on butter and butteroil should be eliminated by 1 July 1989, and that the rate of levy for butter and butteroil should be halved by then.”
The phasing out of the additional assistance afforded the dairy industry by the supplementary market support payment scheme is consistent with the thrust of Australia’s international agricultural trade initiative aimed at halting subsidy escalation and progressively reducing the gap between administered internal prices and international prices for farm products.
Overview
The Dairy Produce Levy (No. 1) Act 1986 was enacted to address the need for a more market-oriented approach within the Australian dairy industry. This legislation is part of a broader legislative package introduced to establish new marketing and assistance arrangements, with the main objective of reducing industry assistance to a level that allows the industry to compete effectively in the Australian market. By setting new price levels based on the competitive prices of New Zealand dairy products, the Act aims to phase out excessive domestic price support and promote industry competitiveness. The Act was enacted by the Parliament of Australia and seeks to achieve this through the imposition of levies on domestic sales of dairy products, with proceeds used to make supplementary market support payments on the export of dairy products. These levies are designed to be progressively reduced over time, ultimately eliminating additional assistance provided by the supplementary market support payments.
Scope and Application
The Dairy Produce Levy (No. 1) Act 1986 applies to the dairy industry within Australia, specifically targeting the domestic sales of butter, butteroil, and cheese. The Act is part of a broader legislative framework introduced to overhaul the existing marketing and assistance arrangements for the Australian dairy industry, aiming to align the industry more closely with market-oriented principles. The Act prescribes the rates of product levies imposed on these dairy products, which are intended to phase out the level of assistance provided to the industry over time. The geographic reach of the Act is national, applying across the Commonwealth of Australia. The amendments outlined in the Statutory Rules 1987 No. 24, issued under the authority of the Minister for Primary Industry, specifically address the operative rates of these levies for six-month periods from 1 July 1987 to 31 December 1989. These amendments are designed to achieve a progressive reduction in the levels of assistance provided to the industry, in line with the policy to reduce domestic price support to a level that matches fair trade prices for New Zealand dairy products in Australia. The Act allows for the extension or restriction of its application through subordinate instruments, facilitating the ongoing adjustment of levy rates as necessary to meet its objectives.
Key Provisions
The Dairy Produce Levy Regulations (Amendment) set forth in Statutory Rules 1987 No. 24, issued under the authority of the Minister for Primary Industry, primarily amend the rates of product levies imposed on domestic sales of butter, butteroil and cheese, as prescribed by section 10 of the Dairy Produce Levy (No. 1) Act 1986. The new rates are specified to apply for each six-month period from 1 July 1987 to 31 December 1989, and they are intended to facilitate the gradual reduction of assistance to the dairy industry, thereby making it more competitive in the Australian market. The existing rates of levy are currently established under regulation 6 of the Dairy Produce Levy Regulations, and these amendments update those rates to align with the new policy objectives.
Entities involved in the domestic sale of butter, butteroil, and cheese, such as dairy manufacturers and retailers, are obligated to comply with the amended levy rates as set out in the Regulations. These entities must ensure that the appropriate levies are calculated and paid in accordance with the new rates, which are designed to reflect the progressive reduction in assistance to the dairy industry. This involves maintaining accurate records of sales and the corresponding levies, as well as making payments to the relevant authorities within the specified timeframes.
Failure to comply with the amended levy rates could result in legal consequences for the involved parties. Although the specific penalties are not detailed in the explanatory statement, under the broader framework of the Act and related regulations, breaches could potentially lead to fines or other enforcement actions. The precise penalties would depend on the nature and severity of the breach, and could be determined by a relevant authority or tribunal. The overarching aim of these penalties is to ensure adherence to the legislative requirements and to support the policy of reducing industry assistance in line with the new marketing arrangements for the Australian dairy industry.