EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO. 98
Issued by the authority of the Minister for Primary Industries and Energy
DAIRY PRODUCE LEVY REGULATIONS (AMENDMENT)
The purpose of the proposed amendments is to reduce the operative rates of product levies imposed on domestic sales of butter and butteroil by section 10 of the Dairy Produce Levy (No 1) Act 1986 (the Act) for the six month period commencing 1 January 1989 and to set a nil rate from 1 July 1989.
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. This involves the progressive reduction in price support.
The 1986 arrangements contain, as a transitional measure, supplementary market support payments on the export of dairy products. These are financed by product levies on domestic sales of butter, butteroil and cheese.
Government policy was to eliminate the cheese levy from 1 July 1989 and to halve the butter and butteroil levies by the same date with consequential reductions in the funds available for supplementary support payments.
The Government has now decided, following its review of industry assistance, to further change the assistance presently provided to a number of primary industries through regulated domestic pricing arrangements. Such assistance is to be reduced in line with reductions in general tariff protection to manufacturing industries. The reductions in primary products assistance will be phased over various periods of between one and five years.
As part of the above package of measures, the levies on domestic sales of butter and butteroil will also cease from 1 July 1989, the day on which cheese levy will cease. The rates of levy to apply for the six month period from 1 January to 30 June 1989 will be half the rates to apply from 1 July 1988, ie $234 per tonne for butter and $289 per tonne for butteroil.
The consequence of the elimination of these levies will be a winding up of the fund from which supplementary payments on dairy exports are made.