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.
Overview
The Dairy Produce Levy Regulations (Amendment) Statutory Rules 1988 were enacted to amend the rates of product levies imposed on domestic sales of butter and butteroil, in line with the policy of reducing price support and transitioning the Australian dairy industry to a more market-oriented basis. This amendment to the 1986 Dairy Produce Levy (No 1) Act was issued by the authority of the Minister for Primary Industries and Energy, reflecting the government’s commitment to review and adjust industry assistance. The policy objective was to eliminate the cheese levy and halve the butter and butteroil levies by 1 July 1989, in conjunction with reductions in general tariff protection for manufacturing industries. The changes were designed to phase out supplementary market support payments, ultimately winding up the fund from which export support payments on dairy products were made.
Scope and Application
The Dairy Produce Levy (No 1) Act 1986, as amended by the Dairy Produce Levy Regulations (Amendment) Statutory Rules 1988 No. 98, applies to the Australian dairy industry and specifically targets the domestic sales of butter, butteroil, and cheese within Australia. The Act was established to introduce new marketing and assistance arrangements aimed at transitioning the dairy industry towards a more market-oriented basis, including the gradual reduction of price support. The Act mandates product levies on domestic sales of specified dairy products to fund supplementary market support payments on dairy exports. Effective from 1 July 1986, these levies were set to cease entirely by 1 July 1989, aligning with broader government policy to phase out industry assistance in line with reductions in general tariff protection for manufacturing industries. For the six months leading up to this date, the levies on butter and butteroil were reduced to half their original rates, with a complete cessation effective from 1 July 1989, resulting in the winding up of funds allocated for supplementary export payments.
Key Provisions
The primary operative sections of the Dairy Produce Levy Regulations (Amendment) Statutory Rules 1988 No. 98 (the Amendment) involve the reduction of product levies on domestic sales of butter and butteroil. Specifically, Section 2(1) of the Amendment reduces the levy rates for the six-month period commencing 1 January 1989 to half the rates that applied from 1 July 1988. This means that from 1 January 1989, the levy on butter will be $234 per tonne and on butteroil, $289 per tonne (Section 2(1)). Section 2(2) further mandates that from 1 July 1989, these levies will cease entirely.
The Amendment imposes specific obligations on parties and entities involved in the domestic sale of butter and butteroil. Firstly, it requires that the reduced levy rates be applied to all domestic sales of these products within the specified time frames (Section 2). Additionally, it mandates the cessation of any levies from 1 July 1989. This legislative change is intended to align with the broader policy of reducing industry assistance and phasing out supplementary market support payments.
Breaches of the provisions set out in the Amendment could result in various consequences. Although the Amendment itself does not specify explicit penalties, breaches of related provisions under the Dairy Produce Levy (No 1) Act 1986 could lead to civil or criminal consequences. The Act may provide for fines or other penalties for non-compliance, but such details are not explicitly stated within the Amendment. The precise nature and extent of any penalties would depend on the relevant provisions of the primary Act.
In summary, the Amendment reduces and eventually eliminates levies on domestic sales of butter and butteroil, aligning with the broader policy objectives of reducing industry assistance and phasing out supplementary market support payments. While the Amendment itself does not detail penalties for non-compliance, related provisions under the primary Act may impose fines or other sanctions for breaches.