EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 122
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 2007 (No. 4)
Section 8 of the Primary Industries (Excise) Levies Act 1999 (the 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.
A levy imposed on logs produced in Australia and delivered to a mill for processing. An export charge is imposed on logs produced in and exported from Australia as unprocessed wood. The levy and/or charge are not imposed if the total amount of levy and/or charge that a person is liable to pay for the year is less than $330.
The Forest and Wood Products Research and Development Corporation (FWPRDC) is responsible for the administration of the levy and charge schemes and for the co-ordination of research and development programs for the forestry industry using the funds collected through the levy. The Australian Government provides matching funds for eligible research and development expenditure under the Primary Industries and Energy Research and Development Act 1989.
The purpose of the Regulations is to increase the levy and charge on hardwood sawlogs by 7 cents per cubic metre. The rate that previously applied to hardwood sawlogs was 22 cents per cubic metre. The peak industry bodies for the forestry industry - National Association of Forest Industries Limited (NAFI), Australian Plantation Products and Paper Industry Council, Australian Forest Growers and Australian Timber Importers Federation - proposed that the rate be increased to 29 cents per cubic metre. The change will achieve equity between the hardwood and softwood sectors, as the levy and charge rate for softwood sawlogs was 29 cents per cubic metre.
A full consultation process, involving a ballot of each affected industry member was conducted during March and April 2006. Of the 77 sawmillers who exercised a vote in the ballot, 54 voted against the increase. However, of the seven largest hardwood sawmillers, who are defined as those who process over 50,000 cubic metres of hardwood sawlogs per year, five voted in support of the increase. These five votes represent over 70 per cent of the hardwood sawlogs produced in Australia. Following the ballot, the hardwood sector representative body, NAFI, publicly announced its support to the levy increase on behalf of the sector.
The Regulations increase the levy and charge rate to 29 cents per cubic metre for leviable hardwood sawlogs. Approximately an additional $16,300 each year will be collected under the Regulations.
The Primary Industries (Excise) Levies Regulations 1999 set the rate of the excise levy and the Primary Industries (Customs) Charges Act 1999 provides that the customs charge shall be the same rate as the excise levy provided by the Primary Industries (Excise) Levies Regulations 1999.
Details of the Regulations are contained in the Attachment.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
In accordance with the Government's Regulation Impact Statement (RIS) requirements, the Office of Regulation Review (ORR) was consulted in the preparation of the proposal and advised that a RIS was not required (ORR ID 8343).
The Regulations commence on 1 July 2007.
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Attachment
DETAILS OF THE PRIMARY INDUSTRIES (EXCISE) LEVIES AMENDMENT REGULATIONS 2007 (No. 4)
Regulation 1 provide for the name of the Regulations to be the Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 4).
Regulation 2 provide for the commencement date to be 1 July 2007.
Regulation 3 provide that Schedule 1 amends the Primary Industries (Excise) Levies Regulations 1999.
Schedule 1 Amendment to Part 1 of Schedule 10
Item [1] substitutes item 3 of the table in clause 1 with new item 3.
Item 3 sets an operative rate of levy on hardwood sawlogs of 29 cents per cubic metre.
Item [2] omits the words, for subregulation (1) and substitute with for this clause in subclause 2 (2).
This substitution amends a cross reference in subclause 2 (2).
Overview
The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 4) were enacted to amend the Primary Industries (Excise) Levies Regulations 1999, increasing the excise levy on hardwood sawlogs from 22 cents to 29 cents per cubic metre. This change was introduced in response to the industry's call for equity between the hardwood and softwood sectors, with the latter already subject to a 29 cents per cubic metre levy. The amendment aims to harmonise the levies across these sectors, ensuring a balanced approach to the forestry industry. The regulations were developed following extensive consultation with industry stakeholders, including a ballot of affected members, and were made under the authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry. The policy objective behind these regulations is to support the research and development needs of the forestry industry by ensuring a fair and sufficient collection of funds through the adjusted levy rates.
Scope and Application
The Primary Industries (Excise) Levies Act 1999 applies to levies and charges on logs produced in Australia and delivered to a mill for processing, as well as export charges on unprocessed wood logs exported from Australia. The Act affects entities and individuals involved in the forestry industry, including sawmillers and processors of hardwood sawlogs. The Forest and Wood Products Research and Development Corporation (FWPRDC) administers these levies and charges, utilising the collected funds for forestry research and development programs, with additional matching funds provided by the Australian Government. Notably, the levy and/or charge do not apply if the total amount liable for the year is less than $330. The Act's application extends across the Commonwealth of Australia, and its provisions can be further detailed or modified through subordinate regulations. The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 4) specifically increased the levy on hardwood sawlogs to 29 cents per cubic metre, aligning the rates with those for softwood sawlogs and facilitating equitable treatment within the forestry sector.
Key Provisions
The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 4) amend the Primary Industries (Excise) Levies Regulations 1999 by increasing the rate of the levy on hardwood sawlogs from 22 cents per cubic metre to 29 cents per cubic metre, as outlined in Regulation 3 and Schedule 1, Item [1] (2). This amendment is intended to achieve equity between the hardwood and softwood sectors, where the softwood sawlogs already had a levy rate of 29 cents per cubic metre. The Regulations also include amendments to ensure consistency and accuracy in cross-references within the existing regulations, as detailed in Schedule 1, Item [2] (2). The changes introduced by these Regulations are effective from 1 July 2007, as per Regulation 2 (3).
The obligations under these Regulations primarily concern the Forestry and Wood Products Research and Development Corporation (FWPRDC), which is tasked with administering the levy and charge schemes and coordinating research and development programs for the forestry industry. The FWPRDC must ensure that the new levy rate is correctly applied to all relevant transactions involving hardwood sawlogs produced in Australia and delivered to mills for processing or exported as unprocessed wood. Additionally, the FWPRDC is responsible for the collection of the increased levy and ensuring that the funds are appropriately allocated towards research and development initiatives supported by the Australian Government.
Failure to comply with the provisions of these Regulations can result in financial penalties and other consequences. While the Regulations themselves do not explicitly state the penalties for non-compliance, under the Primary Industries (Excise) Levies Act 1999, penalties for breaches of excise or charge provisions can include fines and, in severe cases, imprisonment. The specific penalties would depend on the nature and severity of the breach, as well as any applicable guidelines or precedents set by courts in similar cases. The Australian Government, through the FWPRDC, has a vested interest in ensuring that all stakeholders adhere to the new levy rates to maintain the integrity of the forestry industry’s funding mechanisms.