EXPLANATORY STATEMENT
STATUTORY RULES 1990 No. 28
Issued by the Authority of the Minister of State for Resources
WHEAT MARKETING ACT 1989
WHEAT INDUSTRY FUND REGULATIONS
The purpose of the Wheat Industry Fund Regulations is to enable the Australian Wheat Board (AWB) to manage and use money in the Wheat Industry Fund established under Section 80 of the Wheat Marketing Act 1989 (the Act), The Fund has been activated by a decision of the Grains Council of Australia (GCA), which is the industry body representing wheat growers, that all wheat sold or processed by or on behalf of growers will be subject to a levy of 2% of the sales value, at least for the 1989/90 season. Amounts equivalent to this levy are credited to the Fund under Section 81 of the Act.
The purpose of the Fund is to provide an asset base for the AWB to finance a range of commercial activities including cash trading in grains and associated activities and providing insurance on credit sales. This will enable the AWB to meet one of its objectives under the Act, namely providing growers with a choice of marketing options by its commercial participation in the grain market.
The GCA has been given a major role in determining how the Fund should be used and managed since Regulations governing these matters can only be made, under the provisions of subsections 82(3) and 83(3) of the Act, after the Minister for Primary Industries and Energy has considered a report from the GCA, prepared in consultation with the AWB. Such a report has been received and considered by the Minister and was the basis on which the Regulations were drafted.
The Wheat Industry Fund Regulations provide for the AWB to develop an Annual Business Plan in consultation with the GCA. The AWB is to have regard to the Plan in its management of the Fund during the year to which the Plan relates. It is envisaged that each Plan will be a strategic document to cover areas such as proposed uses of the Fund, types of financial support arrangements, payments to holders of certificates in the Fund, and other funding policy issues. In addition the uses for which the AWB can use monies of the Fund as set out in the Act will be subject to the approval of the GCA.
The Regulations also provide that the realised value of all assets of the Fund including monies derived through use of the Fund as a security will be attributable to equity holders in the Fund on a seasonal (1 July - 30 June) basis. This will be achieved through an obligation on the AWB to annually revalue assets of the Fund and issue a statement to all persons recorded on its register at the time, stating the amount of levy paid during the season, if any, and the registered person’s equity in the Fund for that season as determined by the AWB. All or part of a person’s equity will be transferable through the issue of a certificate on request.
The holder of equity in the Fund does not automatically have a right to any payment from the Fund. Payments out of the Fund would be at the discretion of the AWB based on its commercial judgement and after consultation with the Grains Council.
The Government’s commitment to provide a loan guarantee of up to $100 million over five years to assist in the establishment of the Fund is reflected in the Regulations.