EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO 182
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 (AWB).
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 9 of the Act provides that the Governor-General may make regulations for the purpose of Section 5 of the Act, which provides that the rate of tax shall not exceed $1.10 per tonne. Subsection 5(2) provides that regulations prescribing a rate of tax shall not be made except after consideration by the Governor-General of a report made to the Minister for Primary Industries and Energy by the Australian Wheatgrowers’ Federation, now the Grains Council of Australia (GCA). (Amending legislation will go forward effecting this change in the Budget session).
The currently prescribed rate of tax operative since 1 September 1986 is 40 cents per tonne. The GCA has presented a submission to the Minister requesting that the rate of tax be increased by 5 cents to 45 cents per tonne for the 1987/88 season.
The submission identifies three main reasons for increasing the wheat research tax. First, to maintain the competitiveness of Australian wheat on the world market; second, to maintain the real value of the research effort; and finally, to enable wheat research funding bodies to develop and maintain adequate financial reserves so as to maintain and not imping on new or continuing research activities.
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 GVP by 1990. The increase in the prescribed rate of tax represents an increase from 0.23% to 0.25% of the industry’s estimated GVP for 1987/88.
The proposed regulations to increase the rate of tax to 45 cents per tonne are to apply from 1 October 1987.
Section 7 of the Rural Industries Research Act 1985 provides that wheat tax monies are held in the Wheat Research Trust Fund and are used to finance wheat industry research approved by the Wheat Research Committees in each mainland State.
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 gross value of wheat production (GVP). Estimated Commonwealth expenditure for 1987/88 is $7.7 million. Increased matching government expenditure in 1988/89 resulting from the proposed increased levy will be considered in the budget context.
Overview
The Wheat Tax Act 1957 was enacted by the Parliament of Australia to impose a tax on wheat delivered to the Australian Wheat Board (AWB), thereby providing a source of revenue dedicated to wheat research and development. The Act was designed to address the need for dedicated funding to support research that would enhance the competitiveness of Australian wheat on the global market, maintain the real value of research efforts, and ensure that adequate financial reserves were available for ongoing and new research activities. The Act was amended in 1979 and 1984 to extend the tax to wheat sold by the AWB but not delivered to it, and to wheat sold for stockfeed purposes under a permit issued by the AWB. The policy objective underlying these amendments was to ensure that the wheat industry's contribution to research was aligned with the Government's broader goal of increasing industry contributions to research to 0.5% of the industry's gross value of production by 1990. The Wheat Tax Regulations (Amendment) of 1987, issued under the authority of the Minister for Primary Industries and Energy, propose an increase in the wheat tax rate from 40 cents to 45 cents per tonne, effective from 1 October 1987, in response to a submission from the Grains Council of Australia. This amendment aims to provide additional funds for wheat research, with the Commonwealth Government matching these contributions to support approved research initiatives.
Scope and Application
The Wheat Tax Act 1957 applies to the imposition of a tax on wheat delivered to the Australian Wheat Board (AWB). This Act, along with the Wheat Tax Act 1979 and the Wheat Tax (Permit) Act 1984, regulates the tax rate on wheat, ensuring that it applies to wheat sold by the AWB, even if not delivered to it, and to wheat sold for stockfeed purposes under a permit issued by the AWB. The Act is enforced by the Commonwealth of Australia, with the tax rate being set by the Governor-General, following consideration of a report from the Grains Council of Australia. Currently, the tax rate is set at 40 cents per tonne, but the Grains Council has recommended an increase to 45 cents per tonne for the 1987/88 season to support wheat research funding and maintain the industry’s competitiveness. This proposed increase aligns with the government’s objective of boosting industry contributions to research and will be implemented from 1 October 1987. The tax revenue is directed towards the Wheat Research Trust Fund, which finances wheat industry research approved by the Wheat Research Committees in each mainland State, with the Commonwealth contributing matching funds.
Key Provisions
The Wheat Tax Regulations (Amendment) (C2004L06361) primarily amend the rate of the wheat tax under the Wheat Tax Act 1957. Section 5(2) of the Act stipulates that the rate of tax on wheat delivered to the Australian Wheat Board (AWB) shall not exceed $1.10 per tonne. The Governor-General has the authority under Section 9 of the Act to make regulations concerning the rate of tax, provided it does not surpass the maximum limit. The amendment proposed by these regulations seeks to increase the tax from 40 cents per tonne to 45 cents per tonne, effective from 1 October 1987. This adjustment is made in accordance with the recommendations from the Grains Council of Australia (GCA) and follows their consideration of a report on the matter.
The Wheat Tax Regulations (Amendment) impose several obligations on the parties involved. The Australian Wheat Board must collect the increased tax from wheat producers at the new rate of 45 cents per tonne. The Grains Council of Australia is required to submit a report to the Minister for Primary Industries and Energy recommending the rate of tax, ensuring that the tax rate is reviewed and considered periodically. Furthermore, the Wheat Research Trust Fund, which receives the tax revenue, must allocate these funds for wheat industry research as approved by the Wheat Research Committees in each mainland State. The Commonwealth Government is also obligated to contribute matching funds to cover the research expenditure recommended by the Wheat Research Council and approved by the Minister.
Breach of the provisions outlined in the Wheat Tax Act 1957 and its regulations could lead to various consequences. While the specific offences and penalties are not detailed in the explanatory statement, typically, non-compliance with tax regulations could result in fines or other penalties as prescribed by law. The Act and its regulations are designed to ensure that wheat producers and the AWB adhere to the stipulated tax rates and obligations. Failure to comply might lead to financial penalties, legal actions, or other administrative consequences imposed by the relevant authorities.