EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO. 213
Issued by the Authority of the Minister for Primary Industries and Energy.
WHEAT TAX ACT 1957
WHEAT TAX REGULATIONS (AMENDMENT)
Section 4 of the Wheat Tax Act 1957 (the Act) imposes a tax on wheat delivered to the Australian Wheat Board.
The Wheat Tax Act 1979 and the Wheat Tax (Permit) Act 1984 provide that the rate of tax in force from time to time under the Act shall apply respectively to wheat sold by the AWB, but which has not been delivered to it, and to wheat sold for stockfeed purposes under a permit issued by the AWB.
Section 5 of the Act provides that the rate of tax shall not exceed $1.10 per tonne.
Subsection 5(2) of the Act provides that before making regulations for the purposes of Section 5 the Governor-General shall take into consideration a report made to the Minister by the prescribed growers’ organisation, the Grains Council of Australia (GCA).
Section 9 of the Act provides that the Governor-General may make regulations for the purpose of section 5.
The currently prescribed rate of tax operative since 1 October 1987 is 45 cents per tonne. The GCA has presented a submission to the Minister requesting that the rate of levy be increased by 20 cents to 65 cents per tonne commencing for the 1988-89 season.
The submission identifies three main reasons for increasing the wheat tax. First, to maintain the competitiveness of Australian wheat on the world market; second, to maintain the real value of monies available for research; and finally, to enable wheat research funding bodies to develop and sustain adequate financial reserves so as to maintain continuing research activities and address new research priorities.
The industry’s request to increase the tax accords with the Government’s objective of encouraging rural industries to increase their contribution for research to 0.5% of the industry’s gross value of production (GVP). The increase in the prescribed rate of tax represents an increase from 0.30% to 0.44% of the industry’s estimated GVP for 1988-89.
Section 7 of the Rural Industries Research Act 1985 (the Research Act) provides that wheat tax money be paid into the Wheat Research Trust Fund and subsection 9(2) of the Research Act provides that the Wheat Research Committee in each mainland State may approve the payment of money out of that Trust Fund for the purposes of research and development activities in respect of the wheat industry.
The Commonwealth Government contributes matching amounts to cover research expenditure recommended by the Wheat Research Council and approved by the Minister.
In any one financial year the Commonwealth contribution is limited to 0.5% of the GVP. Estimated Commonwealth expenditure for 1988-89 is $8.173 million. Increased funding to meet estimated Commonwealth matching obligations in 1988-89 resulting from the proposed increased tax was announced in May 1988 following the Industry Development Review.
The proposed Wheat Tax Regulations (Amendment) to increase the rate of tax to 65 cents per tonne is to apply from 1 October 1988.
The new rate of tax would also apply under the provisions of the Wheat Tax Act 1979, to wheat sold by the AWB but which had
not been delivered to it, and under the provisions of the Wheat Tax (Permit) Act 1984, to stockfeed wheat sold under permit.