Primary Industries Levies and Charges Collection (Wine Export) Regulations

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Primary Industries Levies and Charges Collection (Wine Export) Regulations 1997 No. 219

EXPLANATORY STATEMENT

STATUTORY RULES 1997 No. 219

Issued by the Authority of the Minister for Primary Industries and Energy

Primary Industries Levies and Charges Collection Act 1991

Wine Export Charge Act 1997

Primary Industries Levies and Charges Collection (Wine Export) Regulations

The Wine Export Charge Act 1997 (the Charge Act) imposes a statutory export charge on wine.

The Regulations implement the rates of charge at a level agreed to and requested by the wine industry and the Australian Wine and Brandy Corporation (AWBC).

The Regulations also provide for the manner of payment of charge, the provision of returns by persons who must lodge quarterly or annual returns for wine export charge and the keeping of records.

The Governor-General may make regulations to set the rate of charges on wine under subsection 10(1) of the Charge Act. The Governor-General may also make regulations to provide for the collection of charge under subsection 30(1) of the Primary Industries Levies and Charges Collection Act 1991 (the Collection Act).

The request for Regulations has come from the AWBC, consistent with subsections 10(2) and 10(3) of the Charge Act, after motions at its 1995 and 1996 AGMs were passed calling for the imposition of an export charge at the proposed rates. The amount of charge payable is on a sliding scale, reducing as export thresholds are met.

Under the Regulations, at the end of each quarter the AWBC will forward to licensed exporters details of the exports carried out under the licence. Wine producers (defined as exporters licensed by the AWBC) will forward the the amount of export charge owing on their exports to the Commonwealth. Funds raised under the arrangements will be directed to the AWBC to be used to support overseas wine promotion programs. At present, these programs, which formerly relied on Government funding, are being paid for out of the Corporation's cash reserves.

Background

For the purposes of subsection 4(1) of the Collection Act, the Regulations prescribe wine and define exporters licensed by the AWBC as "producers", which thereby makes exporters liable for payment of the charge on exports of wine.

Section 6 of the Charge Act imposes a charge on exports of wine. The Regulations set a charge rate, calculated on the value of the wine, of

*       0.25% for the first $10 million of FOB sales in export

*       0.15% for the next $40 million of FOB sales in export

*       0.05% for the remainder of FOB sales in export.

On 1 June 1998, these rates will decline to

*       0.20% for the first $10 million of FOB sales in export

*       0.10% for the next $40 million of FOB sales in export

*       0.05% for the remainder of FOB sales in export.

Subsection 10(4) of the Charge Act requires the Governor-General to take into account any recommendation to the Minister by the AWBC before making regulations in relation to the charge rate.

Subsection 10(2) of the Charge Act permits the AWBC to make recommendations to the Minister regarding regulations made for the purposes of section 7 of the Charge Act, which relates to rates of charge. Subsection 10(3) requires that before the Corporation makes a recommendation to the Minister under subsection 10(2), a motion considering the recommendation must be considered at an annual general meeting of the Corporation. The rates of charge recommended to the Minister are consistent with the motions passed at the 1995 and 1996 annual general meetings.

The Minister has been informed of the voting amongst levy payers. The voting was analysed by state and and showed that there was a majority of winemakers in each state supporting the export charge. The voting was also analysed by size of winemaker, and showed a substantial majority in each class of winemaker supporting the export charge.

Subsection 10(4) of the Charge Act also requires the Governor-General to take into account any relevant matters of which the Minister has been notified under section 29ZA of the Australian Wine and Brandy Corporation Act 1980 (the AWBC Act). This section requires the AWBC to inform the Minister of details of motions passed at an annual general meeting of the AWBC relating to rates of levy imposed under the Winegrapes Levy Act 1979 (rather than export charge imposed under the Charge Act) and of the votes cast for and against the motion.

The Wine Export Charge (Consequential Amendments) Act 1997 should have included a provision amending Section 29ZA to refer to the Charge Act, but due to a drafting oversight, no amendment was included.

As a result, there are no matters of which the Minister has been notified under Section 29ZA of the AWBC Act which are relevant to export charge. Nevertheless, under section 10(2) of the Charge Act, the AWBC has informed the Minister of details of the motions relating to rates of export charge and the votes cast for and against those motions.

Details of the Regulations are set out at Attachment A.

The Regulations will commence on 1 September 1997.

 

Overview

The Primary Industries Levies and Charges Collection (Wine Export) Regulations 1997 were enacted to implement the rates of charge on wine exports as agreed by the wine industry and the Australian Wine and Brandy Corporation (AWBC). This legislation was introduced to address the need for a stable funding source for overseas wine promotion programs, which previously relied on government funding but were to be funded from the AWBC’s cash reserves. The enactment of these regulations provides a statutory framework to ensure a consistent and predictable funding mechanism for these promotional activities. Made under the authority of the Minister for Primary Industries and Energy, the Regulations set out the rates of charge on wine exports, the manner of payment, and the requirements for record-keeping and reporting by licensed wine exporters. The charge rates are on a sliding scale, reducing as export thresholds are met, with a scheduled reduction in rates from 1 June 1998. The policy objective is to support the wine industry's efforts to promote Australian wine exports internationally, ensuring that these promotional activities are adequately funded.

Scope and Application

The Primary Industries Levies and Charges Collection (Wine Export) Regulations 1997 apply to wine producers in Australia, specifically those who are licensed exporters by the Australian Wine and Brandy Corporation (AWBC). The Act imposes a statutory export charge on wine and regulates the manner in which this charge is collected and paid. It applies across the Commonwealth and is enforced by the AWBC, which forwards details of exports to licensed wine exporters at the end of each quarter. The charge rate is calculated on the value of the wine exported, with different rates applying to different value thresholds. These rates are set by the Governor-General under the Wine Export Charge Act 1997 and can be adjusted through subordinate instruments. The funds collected are directed to the AWBC to support overseas wine promotion programs, replacing former government funding. The Act does not exclude any specific persons or entities from its application, as it broadly targets all wine producers who are licensed by the AWBC and export wine.

Key Provisions

The Wine Export Charge Act 1997 (the Charge Act) establishes an export charge on wine, which is implemented through the Primary Industries Levies and Charges Collection (Wine Export) Regulations 1997. These regulations, outlined in Attachment A, set forth the rates and procedures for collecting the charge, as well as the obligations for record-keeping and reporting by licensed exporters. The charge rates are set on a sliding scale, with the first $10 million of free on board (FOB) sales taxed at 0.25%, the next $40 million at 0.15%, and any additional amount at 0.05%. These rates are scheduled to decrease on 1 June 1998, with the first $10 million taxed at 0.20%, the next $40 million at 0.10%, and any additional amount at 0.05%. The Australian Wine and Brandy Corporation (AWBC), which represents the wine industry, has recommended these rates after motions at its 1995 and 1996 annual general meetings (AGMs) passed in favour of the proposed charges. The obligations under these Regulations are primarily directed towards licensed wine exporters, defined as "producers" under section 4(1) of the Primary Industries Levies and Charges Collection Act 1991 (the Collection Act). Producers must remit the export charge to the Commonwealth based on the value of their exports, with the AWBC forwarding details of these exports at the end of each quarter. The collected funds are to be directed to the AWBC for use in supporting overseas wine promotion programs, which are no longer funded by the government but rather by the Corporation's reserves. Producers are required to keep records of their exports and the corresponding export charge, and they must lodge quarterly or annual returns as specified by the Regulations. Failure to comply with the obligations and requirements set out in the Charge Act and the Regulations may result in civil or criminal penalties. While the specific penalties are not detailed in the provided text, breaches of similar legislative frameworks typically involve fines and potential legal action. The seriousness of the breach, the amount of unpaid charges, and whether it was deliberate or due to negligence are factors that could influence the penalties imposed. It is also worth noting that the Governor-General, who has the authority to make regulations under the Charge Act, must take into account any recommendations made by the AWBC and consider the outcomes of votes at the annual general meetings of the AWBC when setting the charge rates. The Minister for Primary Industries and Energy has been informed of the voting results among levy payers, which showed a majority in favour of the export charge across all states and winemaker classes.

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