Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) 2002 No. 3
EXPLANATORY STATEMENT
STATUTORY RULES 2002 No. 3
Issued by the Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry
Primary Industries (Excise) Levies Act 1999
Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1)
Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Excise Act) provides that the GovernorGeneral may make regulations prescribing matters required or permitted by that Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to that Act.
Clause 5 of Schedule 5 of the Excise Act provides that, before making regulations for the purposes of this section, the Minister shall take into consideration any relevant recommendation made to the Minister by the growers' organisation.
Clause 1 of Schedule 5 provides that the grower's organisation means the organisation known as the Australian Cotton Growers' Research Association (ACGRA).
Clause 2 of Schedule 5 of the Excise Act imposes a levy on leviable cotton produced in Australia.
Clause 3 of Schedule 5 of the Excise Act provides that the rate of levy may be changed but shall not exceed $3.0267 per 227kg.
Nearly 95 per cent of Cotton Research and Development Corporation (CRDC) corporate expenditure is directed to research and development, with the remainder directed to corporate support, administration and management.
Section 30 of the Primary Industries and Energy Research and Development Act 1989 provides for research levy money to be paid to Research and Development Corporations. The cotton research levy has been attached to the CRDC since 1 October 1990.
The Commonwealth Government contributes matching amounts to cover research expenditure recommended by the CRDC and approved by the Minister. In any one financial year the Commonwealth contribution is limited to 0.5 per cent of the Gross Value of Production (GVP). Based on current ABARE estimates, this would be around $7million for 2001/02.
The ACGRA has requested an increase in the cotton levy rate from $1.75 per 227kg to $2.25 per 227kg for the 2001/02 season. The Amendment Regulations impose a new rate of $2.25 per 227kg consistent with the cotton industry organisation's recommendation. The new rate will apply from 1 March 2002 to ensure that it applies to all cotton picked in 2002.
The industry believes that it cannot rely on production increases to cover increasing research needs, particularly in several critical research areas required by the industry, including pest control and natural resource management. Based on current ABARE data, the proposed rate represents around 0.43% of calculated Gross Value of Production (GVP) for 2001-02.
Details of the Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) are at Attachment 1.
The regulations commence on 1 March 2002.
ATTACHMENT 1
Regulation 1 provides that the Regulations be known as the Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1).
Regulation 2 provides that the Regulations commence on 1 March 2002.
Regulation 3 provides for the Primary Industries Excise Levies Regulations 1999 to be amended as set out in Schedule 1.
Schedule 1
Clause 1 sets the operative rate of levy applicable to leviable cotton at $2.25 per 227kg. This represents an increase of 50 cents per 227kg bale.
Overview
The Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) were enacted to address a gap in funding for critical research areas within the Australian cotton industry. The regulations were introduced following a recommendation by the Australian Cotton Growers' Research Association (ACGRA) to increase the cotton research levy rate from $1.75 to $2.25 per 227kg for the 2001/02 season. This increase was necessary to meet escalating research needs, particularly in areas such as pest control and natural resource management, which are essential for the industry's sustainability. These regulations, issued by the authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, aim to provide adequate funding for the Cotton Research and Development Corporation (CRDC) by increasing the levy on leviable cotton produced in Australia. The new levy rate is intended to cover the research expenditure recommended by the CRDC and approved by the Minister, ensuring that the cotton industry can effectively address its research priorities.
Scope and Application
The Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) amends the Primary Industries (Excise) Levies Regulations 1999 to adjust the excise levy on leviable cotton in Australia. This legislation applies to entities involved in the production and processing of cotton in Australia, including farmers and processors, and targets the conduct of levying on cotton produced and processed within the nation. The regulations extend to the Commonwealth jurisdiction, as the amendments are made under the authority of the Primary Industries (Excise) Levies Act 1999. The new regulations specify a revised levy rate of $2.25 per 227kg, effective from 1 March 2002, to align with recommendations from the Australian Cotton Growers' Research Association (ACGRA). This change is intended to support increased research and development funding within the cotton industry, particularly in critical areas such as pest control and natural resource management. The regulations do not specify exclusions or exemptions, and the increased levy rate is to be applied uniformly across the industry.
Key Provisions
The Primary Industries (Excise) Levies Amendment Regulations 2002 (No. 1) amends the Primary Industries Excise Levies Regulations 1999 by increasing the rate of the cotton excise levy (section 2 and Schedule 1, clause 1). This amendment sets the new levy rate at $2.25 per 227kg of leviable cotton, effective from 1 March 2002. This new rate is in line with the recommendation from the Australian Cotton Growers' Research Association (ACGRA), as required by section 8 of the Primary Industries (Excise) Levies Act 1999.
The Act imposes several obligations on the parties it governs. Firstly, the Minister is mandated to consider any recommendations from the ACGRA before making regulations under section 8 (section 8, clause 5). Secondly, the growers, particularly those producing leviable cotton, must comply with the new levy rate set forth in the amended regulations. This levy is intended to fund research and development activities in the cotton industry, as outlined in section 30 of the Primary Industries and Energy Research and Development Act 1989.
Failure to comply with the provisions of these regulations can result in civil and criminal consequences. Although specific penalties are not detailed in the explanatory statement, breaches of excise levies generally attract fines and potential legal action under the Excise Act and related legislation. The exact penalties would depend on the nature and severity of the breach, but they can include substantial fines and possibly imprisonment for serious or repeated violations.
The new levy rate of $2.25 per 227kg aims to meet the increasing research needs of the cotton industry, particularly in areas such as pest control and natural resource management. This rate is based on an estimate of 0.43% of the Gross Value of Production (GVP) for the 2001/02 financial year. The increased funding is essential to address the critical research areas identified by the industry.