Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1) 1999 No. 307
EXPLANATORY STATEMENT
STATUTORY RULES 1999 No. 307
Issued by Authority of the Minister for Agriculture, Fisheries and Forestry
Primary Industries Levies and Charges Collection Act 1991
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Act 1999
Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1)
Primary Industries (Excise) Levies (Vegetable) Regulations 1999
Primary Industries (Customs) Charges (Vegetable) Regulations 1999
Section 30 of the Primary Industries Levies and Charges Collection Act 1991, Section 8 of the Primary Industries (Excise) Levies Act 1999 and Section 8 of the Primary Industries (Customs) Charges Act 1999 provide that the Governor-General may make regulations necessary or convenient to be prescribed for carrying out or giving effect to the Acts.
The purpose of the regulations is to continue the levy imposed by the original regulations, while removing an unforseen anomaly in the original regulations. The intention of the original regulations was that the levy be assessed on the farm gate value of the fresh product, however the wording of the regulations meant that growers who processed their product would be assessed on the value after processing.
The vegetable levy was imposed and collected under the framework of the Horticultural Levy Act 1987, the Horticultural Export Charge Act 198 7 and the Primary Industries Levy and Charges Collection Act 1991. The two former Acts were repealed with effect 1 July 1999.
Since 1 March 1996 the vegetable levy regulations have implemented the imposition of an ad valorem levy at the first point of sale and an export charge on vegetables to raise funds for research and development through the Horticultural Research and Development Corporation (HRDC).
The vegetable levy was imposed at the first point of sale on the basis that this is as close an approximation as possible to the 'farm gate value' of the product. However, when the levy is imposed at the first point of sale for vertically integrated organisations, which grow and process their own vegetables, the levy is imposed on a much value-added product as a consequence of the processing.
The amendments to the vegetable levy regulations recognise growers/processors who process vegetables and where there is no sale prior to the harvested product being converted into another good. For these purposes a definition of "processing" was created to include canning, bottling, freezing, cooking, pickling, roasting, dehydrating or any other treatment which alters the original product from its natural state.
In instances where the equivalent raw vegetable is also sold in the market place, the sale price of the equivalent marketed product is proposed as the value for levy calculation purposes. Where it is not feasible to use a surrogate market price, the calculation of levy payable will be based on data from the organisation's financial records to substantiate the basic product value prior to processing, using the Australian Accounting Standards calculation of Cost of Goods Sold.
The regulations also update definitions and references to the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also amend or omit regulations for inclusion in regulations under the new Primary Industries (Customs) Charges Act 1999 and Primary Industries (Excise) Levies Act 1999. The regulations also update the definition of the levy year.
The Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group (Ausveg) requested, and the Horticultural Research and Development Corporation (HRDC) recommended, the change in the vegetable levy. Copies of advice from Ausveg and HRDC are attached (Attachment A and B respectively).
The proposed regulations give effect to the recommendations of the industry/Corporation's proposal.
Levy payers who both grow and process their own vegetables will benefit from the retrospectivity of the proposed changes. In accordance with S48 of the Acts Interpretations Act, 1901, no levy payer is expected to be adversely affected by the changes. Growers who sell their product unprocessed will not be affected by these changes.
The regulations are taken to have commenced on 1 July 1999.
Overview
The Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1) were introduced to address an unforeseen anomaly in the original vegetable levy regulations. Enacted by authority of the Minister for Agriculture, Fisheries and Forestry, these regulations amend the Primary Industries Levies and Charges Collection Act 1991, the Primary Industries (Excise) Levies Act 1999, and the Primary Industries (Customs) Charges Act 1999 to correct the assessment method of the vegetable levy for vertically integrated organisations. These organisations, which grow and process their own vegetables, were previously being assessed on the value after processing rather than at the farm gate value as originally intended. The regulations clarify the definition of "processing" to include various treatments that alter the original product from its natural state and propose using the sale price of the equivalent marketed product as the value for levy calculation purposes. The amendments aim to ensure that levy payers who both grow and process their own vegetables benefit from the changes without any adverse effects, in line with the recommendations of the Australian Vegetable and Potato Growers' Federation Inc - Vegetable Group and the Horticultural Research and Development Corporation.
Scope and Application
The Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1) amends the regulations that were set to implement the levy imposed on the sale of fresh vegetables, aiming to correct an oversight that caused processed vegetable growers to be assessed based on the value after processing rather than at the farm gate. These regulations apply to entities involved in the growing and processing of vegetables in Australia, and they are designed to align the vegetable levy with the intended farm gate value. The changes introduced by these regulations are retrospective and do not affect growers who sell their products unprocessed. The regulations update definitions and references to align with newer legislation, specifically the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1999, and reflect the recommendations of industry stakeholders and the Horticultural Research and Development Corporation. The regulations have been made under the authority of the Minister for Agriculture, Fisheries and Forestry, and are intended to ensure that the vegetable levy is applied fairly and accurately across the vegetable industry.
Key Provisions
The Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1) (hereafter referred to as the "Regulations") aim to address an unforeseen anomaly in the original vegetable levy regulations that inadvertently assessed growers who processed their products on the value after processing, rather than the intended farm gate value. These Regulations were enacted under sections 30 of the Primary Industries Levies and Charges Collection Act 1991, 8 of the Primary Industries (Excise) Levies Act 1999, and 8 of the Primary Industries (Customs) Charges Act 1999, which allow the Governor-General to make regulations necessary or convenient to implement the Acts. The purpose of these Regulations is to ensure that the vegetable levy is assessed accurately on the farm gate value of the fresh product, as originally intended.
The Regulations impose specific obligations on entities subject to the vegetable levy, particularly those that both grow and process their own vegetables. These entities are required to calculate the levy based on the farm gate value of the product, which is the price at which the product is sold at the farm gate before any processing occurs. If the equivalent raw vegetable is sold in the market, the sale price of the equivalent marketed product will be used for levy calculation purposes. In cases where it is not feasible to use a surrogate market price, the calculation will be based on data from the organisation's financial records to substantiate the basic product value prior to processing, using the Australian Accounting Standards calculation of Cost of Goods Sold. These obligations are designed to ensure that the levy accurately reflects the value of the fresh product at the point of harvest.
The Regulations also impose consequences for non-compliance with the specified levy calculation methods. While the explanatory statement does not explicitly detail criminal or civil penalties for non-compliance, the seriousness of the amendments and the need for accurate levy calculation suggest that failure to comply with these requirements could result in financial penalties or other enforcement actions. The intent is to ensure that the levy is applied correctly, which is crucial for the funding of research and development through the Horticultural Research and Development Corporation (HRDC).
In summary, the Primary Industries Levies and Charges Collection (Vegetable) Amendment Regulations 1999 (No. 1) amend the vegetable levy to ensure that it is assessed based on the farm gate value of fresh produce, thereby rectifying an anomaly in the original regulations. These changes benefit growers who process their own vegetables and ensure the levy is calculated accurately, reflecting the original intent of the legislation.