EXPLANATORY STATEMENT
STATUTORY RULES 1982 No. 243
Issued by the Authority of the Minister for Primary Industry
DAIRY PRODUCE REGULATIONS (AMENDMENT)
Section 30 of the Dairy Produce Act 1924 (the Act) so far as is relevant provides that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which are required or permitted to be prescribed for the carrying out or giving effect to the Act.
Section 13 of the Act provides that the functions of the Corporation are:
(a) to promote the export from Australia of dairy produce;
(b) to control the export from Australia of dairy produce;
(c) to control the sale and distribution of dairy produce after its export from Australia;
(d) to promote trade and commerce in dairy produce among the States, between States and Territories and within the Territories;
(e) to improve the production and encourage the consumption of dairy produce in the Territories; and
(f) such other functions in connection with dairy
produce as are provided by the regulations.
Regulations in pursuance of section 13(f) of the Dairy Produce Act enable the Australian Dairy Corporation to provide assistance by way of loans to trading corporations engaged in the manufacture of dairy produce.
Regulation 4A(1)(b) requires such loans to be “secured by a charge over the assets of the trading corporation”.
It is considered that a bank guarantee would also be an acceptable form of security for such loans and could offer advantages of administrative convenience and lower cost to some borrowers.
To allow bank guarantees as an alternative permissible security to the existing requirement, it is proposed that regulation 4A(1)(b) be amended to require the loans to be secured by a charge over the assets of the trading corporation or by a guarantee provided to the trading corporation by a bank.
A “bank” for the purposes of the proposed regulation will be a bank recognised under the Banking Act 1959 or a bank established by a law of a State.
Overview
The Dairy Produce Regulations (Amendment) Statutory Rules 1982, enacted by the Parliament of Australia, aim to address the need for more flexible security arrangements for loans provided by the Australian Dairy Corporation to trading corporations involved in dairy produce manufacturing. The original regulation, as stipulated in section 4A(1)(b) of the Dairy Produce Act 1924, required loans to be secured by a charge over the assets of the trading corporation. The amendment seeks to offer an alternative form of security by allowing bank guarantees, which can provide administrative convenience and potentially lower costs for some borrowers. The policy objective is to enhance the flexibility and efficiency of financial assistance provided to the dairy industry while ensuring that the security of loans remains robust. The amendment is intended to support the broader functions of the Australian Dairy Corporation as outlined in section 13 of the Act, including the promotion and control of dairy produce export and trade.
Scope and Application
The Dairy Produce Regulations (Amendment) Statutory Rules 1982, issued under the authority of the Minister for Primary Industry, pertain to the amendments of the Dairy Produce Regulations 1982 in order to broaden the permissible forms of security for loans provided by the Australian Dairy Corporation to trading corporations involved in the manufacture of dairy produce. The regulations seek to modify the existing requirement that such loans must be secured by a charge over the assets of the trading corporation, by introducing the option for the loans to be secured by a bank guarantee. This change is intended to offer greater flexibility and potentially reduce the administrative burden and cost for some borrowers. The amendment applies to trading corporations that receive loans from the Australian Dairy Corporation, and the term "bank" is defined to include any bank recognised under the Banking Act 1959 or established by state law. The geographic reach of these regulations is national, impacting all states and territories within Australia. No exclusions or exemptions are explicitly stated in the provided text, and the application of the Act extends through subordinate instruments to encompass all relevant entities and transactions within the dairy industry.
Key Provisions
The Dairy Produce Regulations (Amendment) primarily focuses on modifying the security requirements for loans provided by the Australian Dairy Corporation to trading corporations involved in the manufacture of dairy produce. Under section 13 of the Dairy Produce Act 1924, these loans are intended to support the broader functions of the Corporation, including promoting and controlling the export of dairy produce. Regulation 4A(1)(b) initially mandated that these loans must be secured by a charge over the assets of the trading corporation. However, the proposed amendment seeks to allow an alternative form of security: a bank guarantee.
The new regulation would permit loans to be secured by either a charge over the assets of the trading corporation or by a guarantee provided by a bank to the trading corporation. This change is intended to offer flexibility and potentially reduce the administrative burden and costs for some borrowers. The definition of a “bank” in the context of this amendment includes any bank recognised under the Banking Act 1959 or any bank established by a state law.
The obligations imposed by this amendment on the parties involved include ensuring that any loan provided by the Australian Dairy Corporation is adequately secured. This means that trading corporations must either provide a charge over their assets or obtain a bank guarantee. The responsibility for ensuring compliance with these security requirements falls on both the Australian Dairy Corporation, which is to administer the loans, and the trading corporations, which are to provide the necessary security.
In terms of consequences for non-compliance, the Dairy Produce Regulations (Amendment) does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, failure to comply with the security requirements for loans could potentially lead to legal challenges or disputes regarding the enforceability of the loans. Given the context of the Act, any significant breach of regulatory requirements could impact the trading corporation's ability to secure further loans or assistance from the Australian Dairy Corporation, potentially affecting their operations and financial stability.
Overall, the amendment aims to enhance the operational flexibility of the Australian Dairy Corporation by offering an additional, potentially more cost-effective form of security for loans, while ensuring that the integrity and enforceability of these loans remain protected.