Primary Industries (Customs) Charges (Vegetable) Regulations 1999 1999 No. 305
EXPLANATORY STATEMENT
STATUTORY RULES 1999 No. 305
Issued by Authority of the Minister for Agriculture, Fisheries and Forestry
Primary Industries Levies and Charges Collection Act 1991
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Act 1999
Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1)
Primary Industries (Excise) Levies (Vegetable) Regulations 1999
Primary Industries (Customs) Charges (Vegetable) Regulations 1999
Section 30 of the Primary Industries Levies and Charges Collection Act 1991, Section 8 of the Primary Industries (Excise) Levies Act 1999 and Section 8 of the Primary Industries (Customs) Charges Act 1999 provide that the Governor-General may make regulations necessary or convenient to be prescribed for carrying out or giving effect to the Acts.
The purpose of the regulations is to continue the levy imposed by the original regulations, while removing an unforseen anomaly in the original regulations. The intention of the original regulations was that the levy be assessed on the farm gate value of the fresh product, however the wording of the regulations meant that growers who processed their product would be assessed on the value after processing.
The vegetable levy was imposed and collected under the framework of the Horticultural Levy Act 1987, the Horticultural Export Charge Act 1987 and the Primary Industries Levy and Charges Collection Act 1991. The two former Acts were repealed with effect 1 July 1999.
Since 1 March 1996 the vegetable levy regulations have implemented the imposition of an ad valorem levy at the first point of sale and an export charge on vegetables to raise funds for research and development through the Horticultural Research and Development Corporation (HRDC).
The vegetable levy was imposed at the first point of sale on the basis that this is as close an approximation as possible to the 'farm gate value' of the product. However, when the levy is imposed at the first point of sale for vertically integrated organisations, which grow and process their own vegetables, the levy is imposed on a much value-added product as a consequence of the processing.
The amendments to the vegetable levy regulations recognise growers/processors who process vegetables and where there is no sale prior to the harvested product being converted into another good. For these purposes a definition of "processing" was created to include canning. bottling, freezing, cooking, pickling, roasting, dehydrating or any other treatment which alters the original product from its natural state.
In instances where the equivalent raw vegetable is also sold in the market place, the sale price of the equivalent marketed product is proposed as the value for levy calculation purposes. Where it is not feasible to use a surrogate market price, the calculation of levy payable will be based on data from the organisation's financial records to substantiate the basic product value prior to processing, using the Australian Accounting Standards calculation of Cost of Goods Sold.
The regulations also update definitions and references to the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also amend or omit regulations for inclusion in regulations under the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also update the definition of the levy year.
The Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group (Ausveg) requested, and the Horticultural Research and Development Corporation (HRDC) recommended. the change in the vegetable levy. Copies of advice from Ausveg and HRDC are attached (Attachment A and B respectively).
The proposed regulations give effect to the recommendations of the industry/Corporation's proposal.
Levy payers who both grow and process their own vegetables will benefit from the retrospectivity of the proposed changes. In accordance with S48 of the Acts Interpretations Act, 1901, no levy payer is expected to be adversely affected by the changes. Growers who sell their product unprocessed will not be affected by these changes.
The regulations are taken to have commenced on 1 July 1999.
Overview
The Primary Industries (Customs) Charges (Vegetable) Regulations 1999, enacted by the Governor-General under the authority of the Minister for Agriculture, Fisheries and Forestry, were introduced to address an anomaly in the original vegetable levy regulations that resulted in growers who processed their vegetables being assessed on the value of the processed product rather than the farm gate value of the fresh product. This anomaly arose from the levy being imposed at the first point of sale, which did not accurately reflect the 'farm gate value' for vertically integrated organisations that grow and process their own vegetables. The regulations aim to rectify this issue by providing a clearer definition of "processing" and allowing for the calculation of the levy based on the sale price of the equivalent marketed product or, where applicable, data from the organisation's financial records. This change was recommended by the Horticultural Research and Development Corporation (HRDC) and requested by the Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group (Ausveg) to ensure that growers who both grow and process their vegetables are not unfairly disadvantaged. The regulations also update definitions and references to align with the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999, ensuring that the levy is imposed and collected in a manner that is consistent with the objectives of the acts.
Scope and Application
The Primary Industries (Customs) Charges (Vegetable) Regulations 1999, issued under the Primary Industries (Customs) Charges Act 1999, apply to entities within the vegetable industry, specifically those involved in the production and processing of vegetables, and aim to address a specific anomaly identified in the previous regulations. These regulations are designed to ensure that the ad valorem levy imposed on the sale of fresh vegetables is correctly assessed on the farm gate value of the product, rather than on the value after processing, which was the unintended outcome of the original regulations. The regulations establish the levy at the first point of sale and also apply to exports of vegetables, with the funds collected being directed towards research and development through the Horticultural Research and Development Corporation (HRDC). The regulations update and refine definitions, references, and calculation methods to align with the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1999, and they also provide for retrospective application to benefit levy payers who both grow and process their own vegetables. These regulations have a national reach, applying across Australia, and are intended to ensure that the levy is applied fairly and accurately within the vegetable industry.
Key Provisions
The Primary Industries (Customs) Charges (Vegetable) Regulations 1999, under the Primary Industries Levies and Charges Collection Act 1991, establish the framework for the collection of levies on vegetables at the first point of sale and an export charge. These levies are intended to fund research and development through the Horticultural Research and Development Corporation (HRDC). Specifically, Section 30 of the Primary Industries Levies and Charges Collection Act 1991, Section 8 of the Primary Industries (Excise) Levies Act 1999 and Section 8 of the Primary Industries (Customs) Charges Act 1999, empower the Governor-General to create these regulations to ensure the effective implementation of the levies.
The regulations mandate that the levy be calculated based on the farm gate value of the fresh product. For growers who process their vegetables before selling them, the levy is determined using the sale price of the equivalent raw vegetable in the market, if available. If such a price is not feasible, the levy calculation will rely on financial records, adhering to the Australian Accounting Standards for Cost of Goods Sold. These regulations update definitions and references to align with the Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999, and they also revise the definition of the levy year.
Parties governed by these regulations must ensure that the levy is assessed accurately based on the provisions outlined. Growers and processors must report the value of their vegetables correctly, either through market prices or financial records. These regulations require compliance with the new definitions and references to the updated Acts, ensuring that the levies are collected in a manner consistent with the legislative intent.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the regulations for non-compliance, although the overarching Acts may provide for such provisions. Non-compliance with the levies and charges collection framework could potentially result in penalties under the Primary Industries Levies and Charges Collection Act 1991, which may include fines. The exact penalties would be determined in accordance with the provisions of the primary Acts, which could include both civil and criminal penalties for non-compliance.