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2013-2014-2015-2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
DAIRY PRODUCE AMENDMENT (DAIRY SERVICE LEVY POLL) BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Hon. Barnaby Joyce MP,
Minister for Agriculture and Water Resources)
DAIRY PRODUCE AMENDMENT (DAIRY SERVICE LEVY POLL) BILL 2016
GENERAL OUTLINE
The Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 (the Bill) will amend the
Dairy Produce Act 1986 to remove the requirement for the dairy industry to hold a dairy levy
poll every five years. Subordinate legislation in the form of a legislative instrument will also
be developed to:
require the industry services body to establish a levy poll advisory committee to consider
the levy rate every five years;
require the industry services body to hold a levy poll if a variation to the rate is
recommended by the advisory committee; and
include a mechanism for Group A members of Dairy Australia Limited (DAL) to request
DAL conduct a levy poll if they disagree with the levy poll advisory committee's decision
not to convene a levy poll. This proposal must be supported by at least 15 per cent of
levies paid by Group A members.
DAL has two categories of membership. Group A members are dairy farmers, who pay the
dairy levy. Membership is voluntary and entitles members to vote at DAL annual general
meetings. Group B membership covers the peak dairy organisations. Australian Dairy
Farmers (ADF) and the Australian Dairy Products Federation are Group B members of DAL.
The dairy industry expressed concern about the regulatory and financial burden associated
with holding a poll every five years, which is required, regardless of whether a change in levy
rate is to be sought. ADF and DAL commissioned an independent review of the dairy levy
poll process. This review recommended simplifying the levy poll process. In November 2015
dairy levy payers demonstrated their support for simplifying the dairy levy process including
removing the requirement to hold a dairy levy poll every five years.
Background
The dairy industry has around 6000 levy payers (dairy farmers). Under the Dairy Industry
Services Reform Act 2003, DAL is the declared industry services body for the Australian
dairy industry. In accordance with the Primary Industries (Excise) Levies Act 1999 and the
Primary Industries (Customs) Charges Act 1999, dairy farmers pay a dairy service levy to
DAL based on the fat and protein content of milk.
Section 9 of the Dairy Produce Act 1986 requires DAL to make recommendations to the
Minister in relation to the amount of the dairy service levy. Before making each
recommendation, DAL must conduct a poll in accordance with the regulations and the
recommendation must be in accordance with the results of the poll. The regulations stipulate
when recommendations (and a dairy levy poll) must be held, currently every five years. The
dairy levy poll costs industry up to $1 million every five years. These funds could be
redirected towards research and development activities.
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Consultation
In September 2015, ADF, with the support of DAL and the state dairy farming organisations,
embarked on a program of national consultation with dairy levy payers regarding the
proposed changes to the dairy levy poll process. An information pack was sent to 6288
Australian dairy levy payers; 30 presentations were held with 1221 dairy farmers in
attendance; telephone conversations with 785 individual dairy levy payers were conducted;
and a vote on the proposed changes was held.
Every Australian dairy levy payer was contacted at least once through this consultation and
provided with opportunities to provide feedback on the proposed changes, including by
formal vote.
Financial Impact Statement
Nil. The measure will allow industry savings of up to $1 million every five years.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
This Dairy Produce Amendment (Dairy Service Levy Poll) Bill 2016 will amend the Dairy
Produce Act 1986 to remove the requirement for a dairy levy poll to be held every five
years. Under the current legislation, the dairy industry must hold a mandatory poll every five
years to seek the views of levy payers on whether changes should be made to the rate of the
dairy services levy. This levy is used to fund the activities of Dairy Australia, the industry
services body.
The recommendations of the review supported a flexible, streamlined poll process, where a
dairy levy poll would only be held if a change in levy rate is being considered. The
amendments in the Bill will provide industry with more flexibility around the levy poll.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The Hon. Barnaby Joyce MP, Minister for Agriculture and Water Resources
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DAIRY PRODUCE AMENDMENT (DAIRY SERVICE LEVY POLL) BILL 2016
NOTES ON ITEMS
Clause 1 Short title
1. Clause 1 provides that the Act may be cited as the Dairy Produce Amendment (Dairy
Service Levy Poll) Act 2016.
Clause 2 Commencement
2. Clause 2 provides a schedule for commencement.
3. All items in the Bill that are not covered under Schedule 1 commence on the day this Act
receives Royal assent.
4. Items included under Schedule 1 will commence on the date fixed by Proclamation. If six
months has passed and the provisions have not commenced since the date the Act
received Royal Assent, the provisions will commence on the day after the six month
period.
Clause 3 Schedules
5. Clause 3 enables Schedule 1 to have effect.
Schedule 1-Amendments
Dairy Produce Act 1986
Division 3 of Part II
6. Item 1 repeals Division 3 of Part II of the Act.
7. Division 3 of Part II of the Act requires the industry services body to make a
recommendation to the Minister in relation to the amount of the dairy service levy by the
times prescribed in the Dairy Produce (Dairy Service Levy Poll) Regulations 2006 (the
regulations), which is every five years.
8. Division 3 Part II also requires the industry services body to conduct the poll in
accordance with the regulations and make a recommendation about the levy rate in
accordance with the results of the poll.
9. The repeal of Division 3, Part II of the Act removes the reference to the timing in the
regulations to make a recommendation to the Minister.
10. The repeal of Division 3 Part II also removes the reference to the regulations.
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11. The regulations will be replaced with an instrument which will stipulate the conduct of
the poll.
12. Six new clauses will be substituted into Division 3 of Part II of the Act with the aim to
streamline the levy poll process and provide flexibility around the timing of the poll.
13. Clause 1 stipulates that the industry services body must conduct a poll if a request for a
poll has been made in accordance with the legislative instrument.
14. Clause 2 identifies that the dairy levy poll must now be conducted in accordance with the
legislative instrument made under subsection (4).
15. Clause 3 provides for timeframes in relation to recommendations made to the Minister.
Once the results of the poll are known, a recommendation must be made within a certain
timeframe which will be outlined in the instrument. The recommendation must be
consistent with the results of the poll.
16. Clause 4 defines what may be included in the legislative instrument including how a
request for a poll can be made, how the poll will be conducted, and how a
recommendation about the levy poll rate can be made to the Minister.
17. Clause 5 defines other features of the levy poll process that may be included in the
instrument including who may request a levy poll; the circumstances under which a poll
can be requested; and the format of the request for a poll.
18. Clause 6 states that the way that votes will be allocated to each dairy levy payer.
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