Wheat Industry Fund Regulations (Amendment) 1996 No. 256
EXPLANATORY STATEMENT
STATUTORY RULES 1996 No. 256
Issued by Authority of the Minister for Primary Industries and Energy
Wheat Marketing Act 1989
Wheat Industry Fund Regulations (Amendment)
Subsection 94(1) of the Wheat Marketing Act 1989 (the Act) provides that the Governor-General may make regulations for the purposes of that Act. Subsection 94(3) of the Act provides that regulations may be made regarding the operation and management of the Wheat Industry Fund (the Fund). Subsection 94(4) of the Act provides that regulations relating to the Fund cannot be made unless the Minister for Primary Industries and Energy has considered a report from the Grains Council of Australia (GCA) made after consultation with the Australian Wheat Board (AWB). The Minister has considered two reports from the GCA, dated 22 December 1995 and 7 August 1996, as the basis for the Regulations.
The Fund, established under the Act, is made up of levies paid on all wheat sold or processed plus earnings on Fund monies. The Fund is used by the AWB to finance a range of commercial activities such as trading in grains and investment in grain related value adding activities, and it will form the capital base of the AWB when the Government guarantee on AWB borrowings ends in 1999.
The management of the Fund is determined by the provisions of the Act and the associated Wheat Industry Fund Regulations, Statutory Rules 1990 No. 28 as amended.
The main purpose of the Regulations is to 'fine-tune' administration of the WIF, in the light of experience over the past two years, to:
* broaden the existing provisions which specify the circumstances in which equity holders may "cash-out" their WIF equity:
- to include a broader range of categories of insolvency;
- to enable equity holders wholly exempt from income tax, who do not fall within the normal understanding of the term "wheat grower", to access "cash-out" provisions;
- to simplify the "cash-out" payment options to facilitate timely payouts to equity holders eligible to "cash-out" of the Fund;
* introduce additional flexibility into the arrangements for optional payments to equity holders; and
* make some minor administrative amendments.
The Regulations commence on gazettal.
Details of the Regulations are as follows:
Regulation 1 - Provides for amendment of the Wheat Industry Fund Regulations.
Regulation 2 - omits redundant definitions, and clarifies the definition of "value".
Regulation 3 - Omits Paragraph 3 (1) (c) which contained a reference to the previously deleted Regulation 7.
Regulation 4 - This is a consequential amendment which amends existing Regulation 5 and arises from amendments made in Regulation 6.
Regulation 5 - This is a consequential amendment which amends existing Regulation 8 and arises from amendments made in Regulation 6.
Regulation 6 - omits subregulation 8AW and inserts new subregulations 8A(1) and 8A(1A).
Subregulation 8A(1) requires the AWB to determine the value of each unit of equity at the end of each month. This procedure facilitates timely processing of applications for "cash-out" by equity holders, and replaces the previous practice of annual revaluation.
Subregulation 8A(1A) is a re-statement (with improved drafting to remove ambiguity) of existing subregulation 8A(1)(b). It requires the AWB, after the end of each financial year, to determine the number of units to be issued for levy paid into the Fund in that year.
Regulation 7 - This is a consequential amendment which amends existing Regulation 8B and arises from amendments made in Regulation 6.
Regulation 8 - This is a grammatical correction to clarify an ambiguity in existing Regulation 10(5). The Regulation concerns optional payments of accumulated equity to equity holders ("buyback") and requires the Board to provide certain information to equity holders.
Regulation 9 - Inserts new subregulation 10A(3A) requiring each invitation to receive an optional payment of accumulated equity ("buy-back") to include the value of that invitation as well as the number of units to which it relates.
Subregulation 10A(5) is amended to increase flexibility in the administration of "buy-back, of equity to permit partial second round offers of such equity, in addition to the present full payout and zero payout offer options.
Regulation 10 - Omits existing Regulation 14, which provided for "cashout" of equity in cases of bankruptcy, death, having ceased wheat growing for at least three years, having received farm household support that has been converted to a grant and ceased wheat growing, or having received a re-establishment grant and ceased wheat growing. The Regulation includes "cashout, in these circumstances and expands eligibility for "cashout* of equity in cases of insolvency to include:
* an equity holder who has entered into a deed of arrangement or assignment under Part X of the Bankruptcy Act 1966;
* an equity holder in relation to whom a composition has been accepted under Part X of the Bankruptcy Act 1966;
* an equity holder in liquidation or receivership; and
* an equity holder under administration under Part 5.3A of the Corporations Law;
The Regulation establishes that an equity holder may apply for "cashout" of equity if that holder has not been a grower of wheat for at least three years preceding the application, continues not to be a grower, and is wholly exempt from income tax under section 23 of the Income Tax Assessment Act 1936. This allows clubs, churches, municipal councils and similar organisations to access the "cash-out" provisions, as they are not considered to fall within the generally accepted meaning of "wheat grower".
The Regulation further sets out the documentation requirements associated with application for "cash-out" of the Fund.
Regulation 11 - This is a consequential amendment which amends existing Regulation 15, dealing with time limits applying to applications for repayment of equity, and arises from amendments made in Regulation 10.
Regulation 12 - This is a consequential amendment which amends existing Regulation 16 and arises from amendments made in Regulation 10. The Regulation requires the Board to make payment to applicants in circumstances specified in Regulation 14, provided certain administrative requirements are satisfied.
Regulation 13 - Omits existing Regulation 17 and substitutes a simplified method of calculating the amount to be paid to an equity holder eligible for "cash-out" of equity. This simplification is made possible by amendments made in Regulation 6 which require the AWB to determine the value of each unit of equity at the end of each month.
Regulation 14 - This is a clarification of existing Regulation 18, to deal with repayment of levies paid but not yet converted to units of equity.
Regulation 15 - This is a consequential amendment which amends existing Regulation 19 and arises from amendments made in Regulation 13.
Regulation 16 - Omits the Secretary's previous address for the purposes of these Regulations, and replaces it with the current address, following the closure of the Post Office at Queen Victoria Terrace. ACT.