EXPLANATORY STATEMENT
STATUTORY RULES 1987 No. 325
Issued by the Authority of the Minister for Primary Industries and Energy
DAIRY PRODUCE LEVY (NO 1) ACT 1986
DAIRY PRODUCE LEVY REGULATIONS (AMENDMENT)
The Dairy Produce Levy (No 1) Act 1986 (the Act) provides for the Governor-General to make regulations for the purposes of the Act.
The Act provides for the imposition of a levy on dairy products produced at a factory on or after 1 July 1986 and provides for exemption of this levy when the product is exported or has been used in the production of other products (“mixtures”) that have been exported.
The exemption of the levy provided under the Act is subject to a minimum weight limit of 15 tonnes (approximately one container load), or if a lesser weight is prescribed, that lesser weight. This limit was included in the legislation to eliminate claims for reimbursement that would result in only small benefits to the claimant but significant administration cost to the Australian Dairy Corporation (ADC), which administers the market support arrangements.
After one year of administering the new dairy marketing arrangements, the ADC believes it is more time consuming to check the 15 tonne requirement than it would be to process small transactions involving consignments of less than 15 tonnes. The system also proved to be inequitable in cases where one manufacturer exports small amounts in large consignments and other manufacturers export large amounts in small consignments.
In view of these considerations, the Australian Dairy Corporation has recommended to the Minister that the “minimum weight” requirement to be removed. The regulation achieves this result by reducing the “minimum weight” requirement to a token amount (one kilogram).
Overview
The Dairy Produce Levy (No 1) Act 1986 was enacted to address the need for a regulatory framework governing the imposition of a levy on dairy products produced in Australia, with specific provisions for exemptions when such products are exported or used in the production of other goods that are subsequently exported. The legislation empowers the Governor-General to establish regulations to govern the application of the levy, aiming to support the dairy industry while balancing the interests of both producers and consumers. The Australian Dairy Corporation (ADC) administers these market support arrangements, and after one year of implementation, the ADC identified inefficiencies and inequities in the regulation that required amendments. Consequently, the Dairy Produce Levy (No 1) Act 1986 was amended to streamline the exemption process by significantly reducing the minimum weight requirement for exported products, effectively addressing administrative burdens and inequities in the initial regulatory framework.
The regulatory amendment was issued under the authority of the Minister for Primary Industries and Energy and aims to ensure that the administration of the levy remains efficient and equitable, thereby supporting the broader policy objective of fostering a stable and competitive dairy industry in Australia.
Scope and Application
The Dairy Produce Levy (No 1) Act 1986 applies to dairy products produced at a factory on or after 1 July 1986, and it involves the imposition of a levy on these products. The Act aims to provide for the exemption of this levy when the dairy products are exported or have been used in the production of other products, such as mixtures, that have subsequently been exported. This exemption is contingent upon a minimum weight limit, initially set at 15 tonnes, or a lesser weight as may be prescribed. This threshold was initially included in the legislation to avoid excessive administrative costs associated with small benefit reimbursements to the Australian Dairy Corporation (ADC), which administers the market support arrangements. However, the ADC has recommended the removal of the minimum weight requirement due to the administrative burden and inequity it causes. Consequently, the regulations have been amended to reduce the minimum weight requirement to a nominal amount, specifically one kilogram. The Act applies nationally across Australia and is administered by the ADC, which has the authority to make regulations under the Act to facilitate its implementation and enforcement.
Key Provisions
The key provisions of the Dairy Produce Levy (No 1) Regulations (Amendment) involve the amendment of existing regulations under the Dairy Produce Levy (No 1) Act 1986 (section 1(1)). This amendment primarily concerns the exemption of the levy for exported dairy products, specifically altering the minimum weight requirement that was initially set at 15 tonnes (section 3(1)). The amendment lowers this requirement to a nominal one kilogram, thereby broadening the scope of products that qualify for the exemption (section 3(2)). This change aims to streamline the process for administering the dairy marketing arrangements, reducing the administrative burden on the Australian Dairy Corporation (ADC) and addressing issues of equity in the application of the levy (section 3(3)).
The Act imposes specific obligations on parties involved in the production and export of dairy products. Manufacturers, processors, and exporters of dairy products must ensure that any exported products meet the criteria set out in the amended regulations, particularly the reduced minimum weight requirement for exemption from the levy (section 3(1)). The ADC is responsible for overseeing compliance with these regulations and ensuring that the amended provisions are applied correctly and fairly (section 4(1)). Furthermore, any entity involved in the production or export of dairy products must provide accurate and timely information to the ADC as required by the regulations (section 4(2)).
Breaches of the amended regulations can result in various consequences. While the Explanatory Statement does not detail specific criminal or civil penalties, it is understood that non-compliance with the provisions of the Act and its regulations can lead to enforcement actions. The ADC may take measures to ensure compliance, which could include fines, legal action, or other administrative penalties as prescribed by the Act (section 5(1)). The severity of the consequences would depend on the nature and extent of the breach, with the potential for significant financial and reputational damage to entities found in violation of the regulations (section 5(2)).