Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7)

Administered by Department of Agriculture

Legislation au F2007L02286 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2007 No. 208

 

Issued by 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. 7)

 

Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Excise Act) provides that the Governor-General may make regulations, not inconsistent with this Act, prescribing matters required or permitted by this Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this Act.

The purpose of the Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7) (the Excise Amendment Regulations) is to effect a change from voluntary contributions to statutory levies and reflect new levy rates on the slaughter of cattle, sheep, lambs and goats.

Background

Since the 1998 red meat industry restructure, the red meat processor industry has paid voluntary contributions to a private sector company – the Australian Meat Processor Corporation Ltd (AMPC) – to fund its marketing and research and development programmes.

The red meat processor industry has requested that funding arrangements for AMPC be changed from a voluntary contributions system to a statutory based one. The voluntary contribution system was failing due to highly competitive industries and the emergence of “free riders” – processors who weren’t contributing but still benefiting from the sector’s marketing and R&D activities. Under the voluntary system, contributions raised approximately $14 million a year; in comparison the statutory levy system will raise approximately $16 million a year, with the funds to be managed by AMPC. Following this request, amendments have been made to the Australian Meat and Live-stock Industries Act 1997 (AMLI Act) and the Excise Act through the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No 1) Act 2007.

 

The Primary Industries (Excise) Levies Regulations 1999 had previously set the meat processor sector’s operating levy rates at zero to accommodate the operation of the voluntary contributions system, which meant no statutory levies were collected under this provision. Subsequent clauses in both these schedules allowed for a “default” statutory levy system to be invoked should AMPC fail to meet its obligations under the red meat industry Memorandum of Understanding. In effect, the Excise Amendment Regulations invoke the statutory system, but with new levy rates as determined by industry and with the money being directed to AMPC rather than to another service company.

Details of the Regulations are provided in the Attachment.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commence on 1 September 2007.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATTACHMENT

Details of the Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7)

Regulation 1 - Name of Regulations

 This regulation provides that the title of the Regulations is the Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7)

Regulation 2 - Commencement

This regulation provides for the Regulations to commence on 1 September 2007.

Regulation 3 - Amendment of Primary Industries (Excise) Levies Regulations 1999

 This regulation provides that the Primary Industries (Excise) Levies Regulations 1999 are amended as set out in the Schedule.

Schedule - Amendments

Item [1]

Schedule 1, clause 1. This item provides that clause 1 of Schedule 1 to the Primary Industries (Excise) Levies Regulations 1999 is repealed. Clause 1 is redundant because the voluntary contributions system no longer operates now that statutory levies are imposed.

Item [2]

Schedule 1, subclause 2 (1). This item allows for the levy rate on the slaughter of cattle to change from 0.74 of a cent per kilogram to 0.2 of a cent per kilogram, to be destined for the meat processor marketing body.

Schedule 1, subclause 2 (2). This item allows for the levy rate on the slaughter of cattle to change from 0.247 of a cent per kilogram to 0.4 of a cent per kilogram, to be destined for the meat processor research body.

Item [3]

Schedule 17, clause 1.  This item provides that clause 1 of Schedule 17 to the Primary Industries (Excise) Levies Regulations 1999 is repealed.  Clause 1 is redundant because the voluntary contributions system no longer operates now that statutory levies are imposed.

Item [4]

Schedule 17, subclause 2 (1). This item allows for the levy rate on the slaughter of sheep to change from 7.75 cents per head to 6 cents per head, to be destined for the meat processor marketing body.

Schedule 17, subclause 2 (2). This item allows for the levy rate on the slaughter of sheep to change from 3.125 cents per head to 9 cents per head, to be destined for the meat processor research body.

Item [5]

Schedule 17, subclause 3 (1). This item allows for the levy rate on the slaughter of lambs to change from 18.25 cents per head to 7 cents per head, to be destined for the meat processor marketing body.

Schedule 17, subclause 3 (2). This item allows for the levy rate on the slaughter of lambs to change from 3.125 cents per head to 9 cents per head, to be destined for the meat processor research body.

Item [6]

Schedule 17, subclause 4 (1). This item allows for the levy rate on the slaughter of goats to change from 5.425 cents per head to 3 cents per head, to be destined for the meat processor marketing body.

Schedule 17, subclause 4 (2). This item allows for the levy rate on the slaughter of goats to change from 3.125 cents per head to 7 cents per head, to be destined for the meat processor research body.

 

Overview

The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7) were enacted to amend the existing Primary Industries (Excise) Levies Regulations 1999, shifting the funding model for the Australian Meat Processor Corporation Ltd (AMPC) from voluntary contributions to statutory levies. This legislative change was prompted by the inefficiencies and inequities of the voluntary contribution system, which had resulted in the emergence of "free riders" and had failed to raise the necessary funds for marketing and research and development activities in the red meat industry. The Australian Parliament enacted this amendment to address these issues and to ensure that the AMPC could continue to effectively support the industry. The regulations, which came into effect on 1 September 2007, introduced new statutory levy rates for the slaughter of cattle, sheep, lambs, and goats, to be collected and managed by the AMPC, thereby replacing the previous voluntary contribution system.

Scope and Application

The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7) amends the Primary Industries (Excise) Levies Regulations 1999 to transition from a voluntary contribution system to a statutory levy system for the Australian red meat industry. This change was enacted in response to the failure of the voluntary system, which was plagued by issues such as competitiveness within the industry and the presence of "free riders" who benefited from the industry's marketing and research and development activities without contributing. The new statutory levies are applied to the slaughter of cattle, sheep, lambs, and goats, with the funds raised being directed towards the Australian Meat Processor Corporation Ltd (AMPC), a private sector company responsible for managing the marketing and research and development programs of the red meat industry. These regulations apply nationally and specifically target entities within the red meat processing industry, including processors of cattle, sheep, lambs, and goats. The changes, effective from 1 September 2007, establish new levy rates to ensure adequate funding for AMPC, which is expected to raise approximately $16 million annually, compared to the approximately $14 million raised through the previous voluntary contributions system. The regulations are subordinate instruments under the Primary Industries (Excise) Levies Act 1999 and are designed to implement the legislative changes made through the Agriculture, Fisheries and Forestry Legislation Amendment (2007 Measures No 1) Act 2007.

Key Provisions

The Primary Industries (Excise) Levies Amendment Regulations 2007 (No. 7) (Excise Amendment Regulations) fundamentally alter the way levies are collected in the red meat industry, as outlined in section 8 of the Primary Industries (Excise) Levies Act 1999 (Excise Act). The most significant change is the shift from voluntary contributions to a statutory levy system, which is necessary to ensure all industry participants contribute to the funding of marketing and research and development activities managed by the Australian Meat Processor Corporation Ltd (AMPC). This change was prompted by the inefficacy of the voluntary system, which struggled to collect sufficient funds and was undermined by the presence of "free riders." The new regulations specify new levy rates for the slaughter of cattle, sheep, lambs, and goats, directing these funds to AMPC. The Excise Amendment Regulations impose specific obligations on red meat processors. They are now required to pay statutory levies on the slaughter of cattle, sheep, lambs, and goats, as detailed in the Schedule of the Excise Amendment Regulations. The levies are differentiated based on the type of animal and the purpose of the funds (marketing or research and development). For instance, the levy for cattle slaughter changes from 0.74 cents per kilogram to 0.2 cents per kilogram for marketing and 0.247 cents per kilogram to 0.4 cents per kilogram for research and development. Similarly, the levy for sheep slaughter changes from 7.75 cents per head to 6 cents per head for marketing and 3.125 cents per head to 9 cents per head for research and development. These changes reflect a recalibration of financial contributions intended to more accurately fund the industry’s needs. Failure to comply with the Excise Amendment Regulations may result in legal consequences. The Excise Act and related regulations provide for penalties for non-compliance, which can include fines and other enforcement actions. While specific penalties are not detailed in the Excise Amendment Regulations, it is reasonable to infer that non-compliance could lead to financial penalties, enforcement actions, or other legal repercussions as outlined in the broader legislative framework. Given the statutory nature of the levies, compliance is mandatory and essential to avoid potential civil or criminal liability. The Excise Amendment Regulations are a legislative instrument under the Legislative Instruments Act 2003 and came into effect on 1 September 2007. The regulations provide the legal basis for the transition from a voluntary to a statutory levy system, ensuring that all red meat processors contribute to the funding of marketing and research and development activities through the AMPC. By clearly outlining the new levy rates and the statutory requirement for compliance, the Excise Amendment Regulations establish a robust framework to support the industry’s financial needs and ensure the sustainability of its marketing and research initiatives.

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Area of Law
Taxation Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Offence Provisions
Levy Rates
Marketing Body Funding
Research Body Funding

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