Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1)

Administered by Department of Agriculture

Legislation au F2006L00644 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2006 No. 42

 

Issued by Authority of the Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry

 

National Residue Survey (Excise) Levy Act 1998

 

Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1)

 

 

Section 8 of the National Residue Survey (Excise) Levy Act 1998 (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.

 

The National Residue Survey (NRS) implements chemical residue monitoring programmes and recovers the costs of the programmes from participating industries.  These programmes form the basis for documentation that enables the Australian Government to certify that raw food products bound for export and domestic consumption are free from significant chemical contamination.

 

Statutory levies are the preferred mechanism by which primary industries choose to meet the cost of compulsory residue-monitoring programmes required for access to international and domestic markets.  These levies are collected at the same time, and in the same manner, as other statutory levies such as marketing, research and development (R&D) and Animal Health Council levies in order to reduce collection costs for industries.

 

Subclause 1(5) of Schedule 11 to the Act imposes NRS excise levy on the slaughter of pigs, while clause 4 of Schedule 11 currently sets the rate of levy at 8.5 cents per head, or such other rate (not exceeding 40 cents per head) as may be prescribed by regulation.

 

The purpose of the Regulations is to raise the NRS excise levy on pigs to 17.5 cents per head to meet the rising costs of the NRS Pig Residue Monitoring Programme (RMP).

 

The NRS excise levy rate on pigs has not been previously altered by regulation and since 1993 has remained at 8.5 cents per head.  However, in recent years the pig RMP revenue from the levy has been depleted by rising programme costs.  As a result, the relevant industry body - Australian Pork Limited (APL) - moved in September 2002 to significantly reduce the testing programme for the 2002-03 financial year.  This was an interim measure only while APL undertook a review of the programme to improve efficiencies and reduce the costs of the programme.

On the recommendation of the review, the APL Board agreed in 2003 that the testing programme be expanded for the 2004-05 financial year in order to meet market access requirements.  The APL Board also agreed to fund a shortfall in the cost of the programme from APL reserves.  This was done to delay the need to increase the pig RMP levy in the face of financial hardships for producers from the combined impact of the drought, global pig price recession and imports.  The APL Board was also advised that the current pig RMP levy of 8.5 cents per pig at slaughter would be insufficient to fund the testing and market access requirements of the pig RMP for 2005-06 and subsequent years.

In light of these factors, APL considered it imperative that the pig RMP levy be raised to fully fund the programme and replenish reserves.  APL assessed that it would be required to contribute approximately $215,000 in 2005-06 and $528,000 from its annual operating budget in 2006-07 to

supplement the NRS programme without a levy change.  The APL review also showed that it was not feasible to permanently reduce the testing programme without losing market access and possibly consumer confidence.

In consultation with the NRS, APL determined that the pig RMP levy would need to be increased to 17.5 cents to meet these requirements.  This would allow the programme to be fully funded over the next seven years and allow for a small level of reserves to build up to meet any contingencies.  This analysis was also supported by a Cost Benefit Analysis completed by private consultants employed by APL in 2005.

The proposal to increase the pig RMP levy from 8.5 cents per pig at slaughter to 17.5 cents from 1 April 2006 was put to the APL Annual General Meeting held in Canberra on 23rd November 2005.  The motion was carried, with 24 of 34 delegates in agreement and 8 delegates against, with 1 delegate abstaining and 1 delegate absent.  The vote represents a clear majority of support for the increase in the pig RMP levy, made up of 71% of producers affiliated with APL, or 53% of total Australian production.

Prior to the APL Annual General meeting a considered consultation process was carried out within the pig industry through direct consultation with APL members and a media campaign through rural radio and advertisements/articles in rural newspapers (including major Australian pork industry newspapers, journals and newsletters).  APL also closely consulted with the National Residue Survey, Levies Revenue Service and Food and Agriculture Division in the Department of Agriculture, Fisheries and Forestry to ensure that the Government’s General Principles applying to levy changes were also being met.

 

Details of the Regulations are in the Attachment.

 

The Act specified no conditions that needed to be satisfied before the power to make the Regulations was exercised.

 

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

 

The Regulations will commence on 1 April 2006.

 

0519438A-060206Z

 

ATTACHMENT

 

DETAILS OF THE PROPOSED PRIMARY INDUSTRIES LEVIES AND CHARGES (NATIONAL RESIDUE SURVEY LEVIES) AMENDMENT REGULATIONS 2006 (No. 1)

 

Regulation 1 gives the name of the Regulations as the Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1).

Regulation 2 provides for the Regulations to commence on 1 April 2006.

Regulation 3 provides that Schedule 1 amends the Primary Industries Levies and Charges (National Residue Survey Levies) Regulations 1998.

SCHEDULE 1  Amendments

 

Item 1 Omits notes 1 and 2 under Regulation 205 of the Primary Industries Levies and Charges (National Residue Survey Levies) Regulations 1998 for the purposes of clause 4 of Schedule 11 to the National Residue Survey (Excise) Levy Act 1998.  Note 1 referred to the current levy of 8.5 cents per head on pig slaughter while Note 2 referred to Regulation 206 intentionally not being used.

 

Item 2 Inserts a Regulation 206 that sets an amount of levy of 17.5 cents per head on the slaughter of pigs for the purposes of clause 4 of Schedule 11 of the National Residue Survey (Excise) Levy Act 1998.

Overview

The National Residue Survey (Excise) Levy Act 1998 was enacted to establish a mechanism for funding the National Residue Survey (NRS), which monitors chemical residues in raw food products for export and domestic consumption. This legislation addresses the need for ensuring food safety and maintaining market access by implementing residue monitoring programs and recovering their costs from participating industries through statutory levies. The Act empowers the Governor-General to make regulations necessary for its implementation, as demonstrated by the Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1). These regulations were introduced to adjust the NRS excise levy on pigs from 8.5 cents to 17.5 cents per head, responding to the rising costs of the Pig Residue Monitoring Programme and ensuring the program's financial sustainability and market access requirements. The policy objective behind these amendments is to secure adequate funding for the NRS while maintaining efficiency in levy collection processes.

Scope and Application

The National Residue Survey (Excise) Levy Act 1998 applies to the pig industry in Australia, specifically targeting those involved in the slaughter of pigs for the purposes of implementing chemical residue monitoring programs. These programs are essential for ensuring that raw food products intended for both export and domestic consumption are free from significant chemical contamination. The Act facilitates the recovery of costs associated with these monitoring programs through statutory levies, which are collected concurrently with other statutory levies such as marketing, research and development, and Animal Health Council levies to streamline the collection process. The Act’s jurisdiction extends nationally, applying across all states and territories of Australia. There are no specific exclusions mentioned in the text; however, the application of the Act is limited to the financial and operational needs of the pig residue monitoring program. The Act allows for the adjustment of the levy through subordinate instruments, as evidenced by the Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1), which increased the levy on pig slaughter from 8.5 cents to 17.5 cents per head effective from 1 April 2006.

Key Provisions

The Primary Industries Levies and Charges (National Residue Survey Levies) Amendment Regulations 2006 (No. 1) (the Regulations) amend the Primary Industries Levies and Charges (National Residue Survey Levies) Regulations 1998 (the 1998 Regulations). Regulation 2 of the Regulations provides that the amendment will commence on 1 April 2006. Regulation 3 of the Regulations amends the 1998 Regulations by omitting notes under Regulation 205 (item 1) and inserting a new Regulation 206 (item 2). Specifically, item 1 removes references to the existing levy of 8.5 cents per head on pig slaughter, while item 2 introduces a new levy of 17.5 cents per head on pig slaughter. The Regulations impose an obligation on the Australian pork industry to pay a National Residue Survey (NRS) excise levy on the slaughter of pigs. This levy is intended to fund the NRS Pig Residue Monitoring Programme (RMP), which monitors chemical residues in pig meat to ensure it is safe for both domestic and international markets. The obligation arises from Regulation 206, which sets the rate of the levy at 17.5 cents per head on the slaughter of pigs. The levy is intended to cover the costs of the RMP, which have been rising due to various factors such as increased testing requirements and financial hardships faced by producers. The Regulations impose a financial obligation on the Australian pork industry to pay the NRS excise levy at the rate of 17.5 cents per head on the slaughter of pigs. This levy is intended to ensure that the RMP is fully funded and that there are sufficient reserves to meet any contingencies. The obligation is clear and specific, as it directly states the amount of the levy and the purpose for which it is intended. The levy is to be collected at the same time and in the same manner as other statutory levies, such as marketing, research and development, and Animal Health Council levies, to reduce collection costs for the industry. Failure to comply with the Regulations may result in civil or criminal consequences, although the specific penalties are not detailed in the explanatory statement. The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003, which provides a framework for the making and publication of legislative instruments. The Act also provides for the review and amendment of legislative instruments, including the Regulations. It is likely that the penalties for non-compliance with the Regulations would be determined by the relevant legislation, such as the National Residue Survey (Excise) Levy Act 1998, which imposes the NRS excise levy. The Act may provide for penalties such as fines or other civil or criminal sanctions for non-compliance with the levy requirements.

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