EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 285
Issued by the Authority of the Parliamentary Secretary for Agriculture, Fisheries and Forestry
Subject—Primary Industries (Excise) Levies Act 1999
Primary Industries (Excise) Levies Amendment Regulations 2010 (No. 7)
Legislative Authority
Section 8 of the Primary Industries (Excise) Levies Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters that are required, or permitted by the Act to be prescribed, or that are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Act, through its primary provisions and schedules, prescribes levies on a number of primary industry products (or classes of product) for a number of purposes, including marketing, research and development (R&D), government-industry body membership and emergency pest and disease responses. The rates of levy applicable to a particular product (or class of product) are contained in schedules to the Primary Industries (Excise) Levies Regulations 1999 (the Principal Regulations).
Schedule 15 to the Act imposes a levy on horticultural products sold by producers of such products, or used by producers in the production of other goods. Horticultural products include strawberries. Schedule 15 to the Principal Regulations prescribes, amongst other things, a rate of R&D levy for every 1000 strawberry runners, or part of every 1000 strawberry runners, sold for use in the production of strawberries.
Schedule 15 to the Principal Regulations also imposes a Plant Health Australia (PHA) levy on strawberries for the purposes of Schedule 27 to the Act, and prescribes the relevant rate of PHA levy. The imposition of a PHA levy by Schedule 15 is made possible by Schedule 27 to the Act, which provides that the regulations may impose a levy on one or more specified primary industry products at a rate ascertained in accordance with the regulations. This is possible notwithstanding that another schedule to the Act might apply to a particular product.
Purpose and Impact
The Primary Industries (Excise) Levies Amendment Regulations 2010 (No. 7)(the Amendment Regulations) amend the Principal Regulations to reduce by 5 cents the rate of R&D levy for every 1000 strawberry runners, or part of every 1000 strawberry runners, sold for use in the production of strawberries. The Amendment Regulations also increase by 5 cents the rate of PHA levy payable by the producers of strawberries for every 1000 strawberry runners, or part of every 1000 strawberry runners, sold for use in the production of strawberries. This results in the redistribution of R&D and PHA levies payable in relation to strawberries but not a change in the overall amount of R&D and PHA levy that is payable by producers.
Strawberries Australia Incorporated (SAI), the peak national representative body for the strawberry industry, requested that the Commonwealth redistribute the amounts of R&D and PHA levy contained in the Principal Regulations. The request was made on the basis that redistribution would enable SAI, as a member of Plant Health Australia Ltd, to meet increases in the annual financial contribution it is required to make to Plant Health Australia Ltd pursuant to the Plant Health Australia (Plant Industries) Funding Act 2002. The PHA levy imposed by Schedule 15 to the Principal Regulations is used by SAI to meet this annual financial contribution.
Consultation
Subclause 6(6) of Schedule 15 to the Act specifies that before the Governor-General makes regulations for the purposes of subclause 4(3) of Schedule 15, the Minister for Agriculture, Fisheries and Forestry must take into consideration any relevant recommendation made to the Minister by the industry services body declared under section 9 of the Horticulture Marketing and Research and Development Services Act 2000. Furthermore, before making any such recommendation to the Minister the industry services body must consult with the eligible industry body for the particular product or class of products affected by the regulations.
Horticulture Australia Limited (HAL) is declared under section 9 of the Horticulture Marketing and Research and Development Services Act 2000 to be the relevant industry services body for strawberries. It has consulted with SAI—the eligible industry body for strawberries under Schedule 15 to the Principal Regulations—on the reduction of the rate of R&D levy, and expressed its support for the amendments.
Schedule 27 to the Act specifies that if there is a single body that is a designated body in relation to a particular product then the Minister must take into consideration any relevant recommendation made to the Minister by the body before the Governor-General makes a regulation in relation to the product. However, there is no designated body declared by the Minister for the product with which the Amendments Regulations are concerned.
For a levy to be amended, industry (generally through its representative body) must demonstrate that there has been compliance with the Australian Government Levy Principles and Guidelines. This includes demonstrating that sufficient consultation has been undertaken with all sectors of the potentially effected industry or current levy payers, and that there is industry support for the new levy or change in levy rate. Correspondence from SAI to DAFF dated 25 January 2010, together with correspondence from SAI to DAFF dated 12 November 2009, indicated that there was support for the changes in R&D and PHA levy rates amongst members of the wider strawberry industry.
The Office of Best Practice Regulation determined that no further consultation in the form of a Business Cost Calculator or a Regulation Impact Statement was required for the amendments.
Operation
The Amendment Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Details of the Amendment Regulations are set out below.
Regulation 1 specifies that the name of the Amendment Regulations is the Primary Industries (Excise) Levies Amendment Regulations 2010 (No. 7).
Regulation 2 provides that the Amendment Regulations commence on 1 January 2011. A delayed commencement will coincide with the beginning of the next period in which PHA and R&D levies are payable.
Regulation 3 provides that Schedule 1 amends the Primary Industries (Excise) Levies Regulations 1999 (the Principal Regulations).
Schedule 1 Amendments
Item 1 amends clause 16.4 of Schedule 15 to the Principal Regulations to reduce the rate of R&D levy. The item omits the current levy rate of $7.92 for every 1000 strawberry runners, or part of every 1000 strawberry runners, sold for use in the production of strawberries and inserts a new levy rate of $7.87.
Item 2 amends subclause 16.6(2) of Schedule 15 to the Principal Regulations to increase the rate of PHA levy. The item omits the current levy rate of 8 cents for every 1000 strawberry runners, or part of every 1000 strawberry runners, sold for use in the production of strawberries and inserts a new levy rate of 13 cents.