EXPLANATORY STATEMENT
Issued by Authority of the Minister for Agriculture
Primary Industries (Excise) Levies Act 1999
Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019
Authority
The Primary Industries (Excise) Levies Act 1999 (the Excise Levies Act) authorises the imposition of primary industries levies, which are duties of excise.
Section 8 of the Excise Levies Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Schedule 27 to the Excise Levies Act provide that Regulations may impose primary industries levies, set the rate of the levies and specify the person liable to pay the levy.
Citrus levy
Clause 2 of Schedule 15 to the Excise Levies Act imposes a levy on ‘leviable horticultural products’. Part 7 of Schedule 15 to the Primary Industries (Excise) Levies Regulations 1999 (Excise Levies Regulations) extends the levy to citrus, as leviable horticultural products. Subsection 7.7(1) of Schedule 15 to the Excise Levies Regulations imposes an Emergency Plant Pest Response (EPPR) levy on citrus.
Farmed prawns levy
Part 3 of Schedule 27 to the Excise Levies Regulations imposes a levy on farmed prawns produced in Australia.
Purpose
The purpose of the Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019 (the Regulations) is to:
- activate (that is, set to a positive rate) the EPPR levy on citrus to $1.05 per tonne for oranges and other citrus sold in bulk and 2.1 cents per box for oranges and other citrus not sold in bulk
- to impose a white spot disease repayment levy on farmed prawns at a rate of 3.01 cents per kilogram.
Levies are introduced, administered and collected by the Australian Government, usually at the request of industry. The Department of Agriculture (the department) collects the levy on behalf of the Commonwealth and, where required by legislation, disburses the funds to the relevant recipient body.
Background
Citrus levy
On 6 February 2019, Citrus Australia Limited (CAL), the industry body representing citrus growers in Australia, requested that the then Minister for Agriculture and Water Resources activate the EPPR levy and charge at the rates given above. The funds raised from this levy will be used to repay the Commonwealth for costs paid on behalf of CAL in relation to the nationally cost-shared eradication response to citrus canker in the Northern Territory and Western Australia.
The department has assessed the CAL request and considers that it meets the Australian Government Levy Principles and Guidelines for the activation of an EPPR levy.
Farmed prawns levy
On 4 May 2017, following a request from the Australian Prawn Farmers Association (APFA), the peak body for the farmed prawn industry, the then Minister for Agriculture and Water Resources approved an up to $20 million assistance package for prawn farmers affected by the response to white spot disease in the Logan River. White spot disease is not an animal disease covered under any current response deed and APFA is not a party to the Emergency Animal Disease Response Agreement (EADRA), therefore it was agreed that costs would be shared with industry on an 80/20 split under arrangements consistent with those applied to other industries under EADRA.
The then Minister and the AFPA agreed that the industry contribution (20 per cent, up to $4 million) would be underwritten by the Australian Government and then repaid through a statutory levy and charge on farmed prawns. They also agreed that the levy and charge would not commence for three years after the destruction of prawns on affected farms to give the industry time to restock after a required fallow period.
Details and Effect
The levy rates for citrus were calculated to ensure that the industry’s liability to the Australian Government will be repaid within approximately five years, at which time CAL intends to request that the levy is reset to a nil rate. The increases are a small amount that is unlikely to influence the price of citrus products.
The levy rate for farmed prawns was calculated to ensure that the industry’s liability to the Australian Government will be repaid in approximately ten years, at which time the government intends to cease the levy. The levy is a small amount that is unlikely to influence the price of farmed prawns.
Conditions
Subclause 14(2) of Schedule 27 to the Excise Levies Act provides that if there is a single body that is a designated body in relation to a particular product, then, before the Governor‑General makes a regulation in relation to the product, the Minister must take into consideration any relevant recommendation made to the Minister by the body. CAL, the peak industry body for the Australian citrus industry was designated as the body for citrus by the Minister through the Primary Industries (Excise) Levies (Designated Bodies) Declaration 2013 made under clause 13 of Schedule 27 to that Act.
CAL made such a representation on 6 February 2019. The Minister took CAL’s recommendations into account and approved its request on 22 August 2019.
Consultation
Consistent with the Australian Government Levy Principles and Guidelines for the activation of an EPPR levy, CAL notified levy payers of its intention to request the activation of the levy at the rates described. It did this in a letter to industry members and through its social media channels. CAL held a 30-day objection period from 11 March to 12 April 2019. No objections were received.
APFA’s agreement to the arrangements of cost sharing was unanimously supported by farmed prawn industry members at the Ridley Australian Prawn Farmers Symposium 2017 on 2 August 2017. The matter was raised again at the 2018 symposium (on 13 August) and again received unanimous support. APFA undertook consultation with actual and potential levy payers on the proposed rate of the levy at 3.01 cents per kilogram. A formal objection period was held from 4 February to 8 March 2019. No objections on the WSDR levy were received.
Details / Operation
Details of the Regulations are set out in Attachment A.
The Regulations are compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.
Attachment A
Details of the Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019
Section 1 – Name of Regulations
This section provides that the name of the Regulations is the Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019.
Section 2 – Commencement
This section provides for the Regulations to commence on 1 January 2020.
Section 3 – Authority
This section provides that the Regulations are made under the Primary Industries (Excise) Levies Act 1999.
Section 4 – Schedule
This section provides for the Primary Industries (Excise) Levies Regulations 1999 to be amended as set out in Schedule 1.
Schedule 1 – Amendments
Item 1 amends subclause 7.7(2) of Schedule 15 to provide that the rates of EPPR levy on citrus are as follows:
(a) for oranges in bulk—$1.05 per tonne of oranges;
(b) for oranges not in bulk—2.1 cents per box;
(c) for other citrus in bulk—$1.05 per tonne of citrus;
(d) for other citrus not in bulk—2.1 cents per box.
Item 2 inserts a new heading “Division 3.1—Definitions for this Part” before clause 3.1 of Schedule 27. This technical change is being made because the Part is being divided into three Divisions, to provide separately for the new special purpose levy.
Item 3 amends subclause 3.1 of Schedule 27 to replace “In these Regulations” with “In this Part” to be consistent with other Parts in this Schedule.
Item 4 inserts a new heading “Division 3.2—Product levy” before clause 3.2 of Schedule 27. This technical change is being made because the Part is being divided into three Divisions, to provide separately for the new special purpose levy.
Item 5 amends clause 3.3 of Schedule 27 to add “imposed by this Division on farmed prawns” after “the rate of levy” to clarify that the rate only applies to the levy imposed by the Division.
Item 6 amends clause 3.4 of Schedule 27 to replace “imposed by this Part” with “imposed by this Division” to clarify that the provision only applies to the Division and not the whole Part.
Item 7 replaces the note with a new note on the meaning of the term “producer.” This is a consequential change to reflect the amendments of clause 3.4 of the Primary Industries Levies and Charges Collection Regulations 1991 being made by the Primary Industries Levies and Charges Collection Amendment (Farmed Prawns) Regulations 2019.
Item 8 adds Division 3.3 at the end of Part 3 of Schedule 27, which provides for the imposition of a white spot disease repayment levy on farmed prawns, the rate of levy and who pays the levy.
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The purpose of the Primary Industries (Excise) Levies Amendment (Citrus and Farmed Prawns) Regulations 2019 (the Regulations) is to:
- activate (that is, set to a positive rate) the Emergency Plant Pest Response (EPPR) levy on citrus to $1.05 per tonne for oranges and other citrus sold in bulk and 2.1 cents per box for oranges and other citrus not sold in bulk
- to impose a white spot disease repayment levy on farmed prawns at a rate of 3.01 cents per kilogram.
The Regulations commence on 1 January 2020.
Human rights implications
These Regulations do not engage any of the applicable rights or freedoms.
Conclusion
The measures in the Regulations are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 as the Regulations do not engage any human rights issues.
Senator the Hon. Bridget McKenzie
Minister for Agriculture