EXPLANATORY STATEMENT
Select Legislative Instrument 2006 No. 317
Issued by Authority of the Minister for Agriculture, Fisheries and Forestry
Primary Industries (Excise) Levies Act 1999
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Amendment Regulations 2006 (No. 7)
Primary Industries (Customs) Charges Amendment Regulations 2006 (No. 5)
Section 8 of both the Primary Industries (Excise) Levies Act 1999 (the Excise Levies Act) and the Primary Industries (Customs) Charges Act 1999 (the Customs Charges Act) provide that the Governor-General may make regulations prescribing matters required or permitted by those Acts to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to those Acts.
Clause 2 of Schedule 27 to the Excise Levies Act provides that regulations may impose a levy, and Clause 2 of Schedule 14 to the Customs Charges Act provides that regulations may impose a charge on primary industry products.
The Regulations ceased the imposition of certain levies on sugar after 30 November 2006. The domestic sugar levy was introduced on 1 January 2003 to help fund the Sugar Industry Reform Programme (SIRP) 2002 that was originally intended to provide funding of up to $120 million. In April 2004, those elements of SIRP 2002 which had not been completed were incorporated with some new initiatives under SIRP 2004 which provides funding of up to $444 million.
The levy has collected $77.9 million to date and is expected to collect $79.7 million by
30 November 2006. This is significantly less than cumulative administered expenditure on SIRP 2002 ($22.2 million) and SIRP 2004 (exceeding $260.6 million).
The Primary Industries (Excise) Levies Regulations 1999 provided for the imposition of the levy. Part 6 of Schedule 27 to these regulations imposed the levy on (a) retail-packaged sugar produced in Australia and (b) sugar that is used as an ingredient in goods that are produced in Australia for human consumption. The levy was set at a rate of three cents per kilogram. However, clause 6.6 of Schedule 27 provided that the levy will cease on 31 December 2007.
In parallel, Part 4 of Schedule 14 of the Primary Industries (Customs) Charges Regulations 2000 imposed a customs charge of three cents per kilogram on retail-packaged sugar imported into Australia, with a sunset date of 31 December 2007.
Funding provided by the levy has played an important part in delivery of the SIRP 2004 which has been instrumental in helping the industry through a very difficult period. The success of the programme will provide significant benefits to sugar users by ensuring continued access to cheaper high quality sugar.
The marked improvement in world sugar prices since 2004 and the cost price squeeze affecting sugar users has prompted the Government to remove this levy sooner than originally planned. The removal of the levy is an important respite for sugar users such as Australia’s food manufacturing and beverage industries, which have also faced increased input costs combined with strong overseas market competition. It will help investment, innovation and employment growth in these industries and make Australian manufacturers more competitive in international markets.
The removal of the levy sooner than originally planned will not affect the Australian Government’s commitment to the reform and restructure of the Australian sugar industry through funding of SIRP 2004.
The Regulations removed the levy at midnight on 30 November 2006, (i.e. cessation date of 1 December 2006).
The Regulations are legislative instruments for the purposes of the Legislative Instruments Act 2003.
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Overview
The Primary Industries (Excise) Levies Amendment Regulations 2006 (No. 7) and the Primary Industries (Customs) Charges Amendment Regulations 2006 (No. 5) were enacted to address the issue of the domestic sugar levy, which was initially introduced to fund the Sugar Industry Reform Programme (SIRP) 2002 and later SIRP 2004. These regulations were made under the authority of the Minister for Agriculture, Fisheries and Forestry, in accordance with sections 8 of the Primary Industries (Excise) Levies Act 1999 and the Primary Industries (Customs) Charges Act 1999. The policy objective behind these regulations was to cease the imposition of certain levies on sugar products earlier than originally planned, due to improvements in world sugar prices and the cost price squeeze affecting sugar users. This legislative action was intended to provide relief to sugar users such as Australia’s food manufacturing and beverage industries, which faced increased input costs and strong overseas market competition. The removal of the levy was set to help stimulate investment, innovation, and employment growth in these industries, while ensuring continued access to cheaper, high-quality sugar for consumers.
Scope and Application
The Primary Industries (Excise) Levies Amendment Regulations 2006 and the Primary Industries (Customs) Charges Amendment Regulations 2006 amend the Primary Industries (Excise) Levies Regulations 1999 and the Primary Industries (Customs) Charges Regulations 2000 respectively, to cease the imposition of levies on sugar after 30 November 2006. These regulations apply to entities producing or importing retail-packaged sugar in Australia or using sugar as an ingredient in goods produced in Australia for human consumption. The cessation of the levy was enacted to provide relief to the Australian food manufacturing and beverage industries, which have faced increased input costs and strong overseas market competition. Although the levy was originally intended to fund the Sugar Industry Reform Programme (SIRP) 2002 and 2004, the marked improvement in world sugar prices and cost price squeeze affecting sugar users has led to the early removal of the levy. The cessation of the levy does not affect the Australian Government's commitment to the reform and restructure of the Australian sugar industry through funding of SIRP 2004.
Key Provisions
The Primary Industries (Excise) Levies Amendment Regulations 2006 (No. 7) and the Primary Industries (Customs) Charges Amendment Regulations 2006 (No. 5) primarily amend the Primary Industries (Excise) Levies Act 1999 and the Primary Industries (Customs) Charges Act 1999 by ceasing the imposition of certain levies on sugar. Specifically, these Regulations, as referenced in section 8 of both Acts, modify the existing levies to remove them altogether (section 8). The cessation of these levies was enacted to provide relief to various sectors of the Australian economy, particularly the food manufacturing and beverage industries, which have been facing increased input costs and strong overseas market competition. The levies, originally set at three cents per kilogram on retail-packaged sugar produced in Australia and on sugar used as an ingredient in goods produced in Australia for human consumption, were intended to fund the Sugar Industry Reform Programme (SIRP). However, due to the marked improvement in world sugar prices since 2004, the Government has decided to remove the levy earlier than originally planned.
The obligations and requirements imposed by these Regulations primarily revolve around the cessation of the sugar levy. Producers and importers of sugar within Australia must now ensure that they no longer account for the levy on their sugar products. This includes both domestic sugar production and imported sugar products, as stipulated in clauses 2 of Schedule 27 to the Excise Levies Act and Schedule 14 to the Customs Charges Act. Businesses must also update their accounting and reporting practices to reflect the cessation of the levy, ensuring that no further charges are levied after the effective cessation date of 1 December 2006.
In terms of breaches and consequences, the Regulations do not explicitly state any offences or penalties for non-compliance. However, the cessation of the levy means that any continued imposition of the levy post the effective date would be considered a breach. Such breaches could potentially lead to civil or criminal consequences, depending on the intent and extent of the non-compliance. The Australian Government may take action to recover any improperly collected levies, and repeat offenders might face escalating penalties. Although the specific penalties are not detailed in the text, it is implied that failure to comply with the cessation of the levy could result in legal action and financial repercussions for the offending party.