Commonwealth Numbered Regulations - Explanatory Statements
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PRIMARY INDUSTRIES LEGISLATION AMENDMENT (CHESTNUTS AND POTTED PLANTS) REGULATION 2013 (SLI NO 133 OF 2013)
EXPLANATORY STATEMENT
Select Legislative Instrument 2013 No. 133
Issued by Authority of the Parliamentary Secretary for Agriculture, Fisheries and Forestry
Primary Industries (Customs) Charges Act 1999
Primary Industries (Excise) Levies Act 1999
Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013
Legislative Authority
Sections 8 of the Primary Industries (Customs) Charges Act 1999 (Charges Act) and the Primary Industries (Excise) Levies Act 1999 (Levies Act) provide that the Governor-General may make regulations prescribing matters required or permitted by those Acts to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to those Acts. The Charges Act and the Levies Act provide for the ability to impose charges and levies respectively, on horticultural products.
Clause 2, Part 2, Schedule 14 to the Charges Act and Clause 2, Part 2, Schedule 27 to the Levies Act provide that the Primary Industries (Customs) Charges Regulations 2000 (Charges Regulations) and the Primary Industries (Excise) Levies Regulations 1999 (Levies Regulations) impose charges or levies on horticultural products, respectively.
The national coordinator of the government-industry partnership for plant biosecurity in Australia is the Plant Health Australia (PHA). Schedule 10 to the Charges Regulations and Schedule 15 to the Levies Regulations impose special charges and levies, including PHA and Emergency Plant Pest Response (EPPR) charges and levies. Subclause 1 of Regulation 3 of the Charges Regulations defines PHA charge to mean the charge imposed, under Schedule 14 to the Charges Act, to fund PHA. Subclause 1 of Regulation 3 of the Levies Regulations defines PHA levy to mean the levy imposed, under Schedule 27 to the Levies Act, to fund PHA. Subclause 1 of Regulation 3 of both the Charges Regulations and Levies Regulations also provide that PHA has the meaning given by the Plant Health Australia (Plant Industries) Funding Act 2002. The rate of PHA charge is fixed by the Charges Regulations and the rate of PHA levy is fixed by the Levies Regulations.
The Emergency Plant Pest Response Deed (EPPRD) is a formal agreement between the Australian Government, all states and territory governments, PHA and plant industry signatories on how to manage the costs and responsibilities for responding to an emergency plant pest outbreak. Subclause 1 of Regulation 3 of both the Charges Regulations and Levies Regulations provide that EPPR charge and levy have the meanings given by the Plant Health Australia (Plant Industries) Funding Act 2002. Section 3 of the Plant Health Australia (Plant Industries) Funding Act 2002 provides that an EPPR charge or levy is those imposed by regulations under Schedule 14 to the Charges Act and that is described in those regulations as "EPPR charge", or those imposed by regulations under Schedule 27 to the Levies Act and that is described in those regulations as "EPPR levy", respectively. The rate of EPPR charge or levy is fixed by the Charges Regulations or Levies Regulations respectively.
Subclause 6.1 of Schedule 10 to the Charges Regulations and Subclause 6.1 of Schedule 15 to the Levies Regulations provide that chestnuts are chargeable and leviable horticultural products, respectively. Subclause 12.2 of Schedule 15 to the Levies Regulations provides that potted plants are nursery products that are leviable horticultural products. These charges and levies are payable by the producers of the products.
Purpose
The Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013 (Regulation) reduces the existing rates of research and development (R&D) charge and levy for chestnuts from $50 to $45 per tonne and establishes a new PHA charge and levy for chestnuts of $5 per tonne. It also establishes a new EPPR charge and levy for chestnuts set at zero.
The Regulation further reduces the existing rate of R&D levy for nursery products, which is imposed on potted plants from 3 to 2.75 percent of the sale price of the container used to prepare the potted plants. It establishes a new PHA levy for nursery products, which is imposed on potted plants at a rate of 0.25 percent of the sale price of the container used to prepare the potted plants. It also establishes a new EPPR levy for potted plants set at zero.
Background
Levies and export charges are introduced and administered by the Australian Government at the request of industry. Horticultural products charges and levies are collected by the Levies Revenue Service within the Department of Agriculture, Fisheries and Forestry (DAFF), which disburses the funds collected from the R&D and marketing charges/levies to Horticulture Australia Limited (HAL) or from the PHA and EPPR charges/levies to PHA.
HAL was formed in 2001 and is the declared industry services body under Section 9 of the Horticulture Marketing and Research and Development Services Act 2000. HAL is the industry owned rural R&D Corporation for the Australian horticulture sector. HAL's purpose is to be accountable for the efficient and effective investment of industry and government funds in R&D and industry investment in marketing. HAL's funding is derived from a combination of statutory industry charges and levies (from grower to R&D and marketing), voluntary contributions (from grower associations, commercial enterprises, researchers and individuals), and Australian Government matching funds for eligible R&D, as well as other sources such as royalties and investments.
PHA is a company under the Corporations Act 2001 that was established in April 2000. Its role is to facilitate a national approach to enhance Australia's plant health status through effective partnerships between governments and industry on matters such as pest preparedness and prevention, and emergency response and management. Industry member's financial contributions to PHA are set under the Plant Health Australia (Plant Industries) Funding Act 2002. Industries can elect to use charges/levies to pay their membership fees to PHA.
Industry signatories to the EPPRD must nominate how they will meet their financial liabilities, which is usually done by establishing an EPPR charge and/or levy. An EPPR charge/levy is usually set to zero and activated following an agreed nationally cost-shared response to an emergency plant pest incident affecting the industry party. Under the EPPRD, the Commonwealth Government may initially meet an industry's cost-sharing obligations. Industry is then required to pay back the Commonwealth and will negotiate a time period to repay the debt (usually within 10 years). The rate for the response charge/levy will be calculated based on the time period. Once the debt has been paid, the EPPR charge/levy is returned to zero.
Chestnuts Australia Inc (CAI) is the national representative industry body for chestnuts in Australia. A levy is payable on fresh chestnuts produced and sold in Australia. An export charge is payable on fresh chestnuts produced in and exported from Australia. DAFF received a request dated 15 June 2012 from CAI to decrease existing rates of R&D charge and levy on chestnuts and introduce new PHA and EPPR charges and levies.
Nursery and Garden Industry Australia (NGIA) is the national representative industry body for nursery products in Australia. A levy is payable on potted plants produced and sold in Australia. DAFF received a request dated 12 November 2012 from NGIA to decrease its existing rate of R&D levy on potted plants and introduce new PHA and EPPR levies.
CAI and NGIA are both members of PHA and signatories to the EPPRD. HAL is the declared relevant industry services body for chestnuts and nursery products. HAL has consulted with CAI and NGIA, and has written to DAFF expressing its support for both the chestnuts and potted plants charges/levies amendments.
Impact and Effect
These amendments enable the national peak representative industry bodies for chestnuts and potted plants, CAI and NGIA respectively, to meet their financial contributions to PHA. The Regulation redistributes R&D charges/levies in relation to chestnuts or potted plants. It does not change the overall amount of charges/levies payable by the producers of chestnuts or potted plants. The chestnuts EPPR charge and levy and the potted plants EPPR levy are set to zero and will be activated if necessary following an agreed nationally cost-shared response to an emergency plant pest incident affecting the chestnut industry or nursery and garden industry, respectively. PHA membership and the ability to remain signatories of the EPPRD, provide valuable protection for the industry and individual producers of chestnuts and potted plants.
Consultation
Subclause 5(5) of Schedule 10 to the Charges Act and subclause 6(8) of Schedule 15 to the Levies Act provide that, before the Governor-General makes regulations for the purpose of prescribing a R&D charge/levy, the Minister must take into consideration any relevant recommendation made to the Minister by the industry services body. Horticulture Australia Limited (HAL) is the declared industry services body for chestnuts and nursery products at the time of making the Regulation (Clause 1 of Schedule 10 to the Charges Act, Clause 1 of Schedule 15 to the Levies Act and Section 9 of the Horticulture Marketing and Research Development Services Act 2000). The industry services body may consult with the eligible industry body for the particular product or class of products affected by the Charges and Levies Regulations. A declared industry services body such as HAL is an industry owned corporation, partly funded by the Commonwealth Government. Whereas a peak industry body such as CAI or NGIA represents only the interests of the producers of the chestnuts or potted plants, respectively. Accordingly, the Minister has considered the recommendations made by HAL in consultation with CAI and NGIA in making the Regulation.
For a new charge/levy to be imposed or for a charge/levy to be amended, industry (generally through its representative body) must demonstrate that the Australian Government's Levy Principles and Guidelines have been complied with. This includes demonstrating that sufficient consultation has been undertaken with all sectors of the potentially affected industry or current charge/levy payers, and that there is industry support for the new charge/levy or change in charge/levy rate.
CAI advised DAFF in its submission that the amendments had been extensively canvassed through newsletters and newspapers, website information, mail outs, and at industry meetings. The amendments were supported by the majority of industry members. HAL has indicated its support for the chestnuts charges/levies amendments in a correspondence dated 17 February 2012.
NGIA advised DAFF in its submission that the amendments had been extensively canvassed to its members through mail outs, communiqués through newsletters and websites and cross-country meetings. The amendments were supported by the majority of industry members. HAL has indicated its support for the potted plants levies amendments in a correspondence dated 4 December 2012.
DAFF has considered the information provided by CAI and NGIA and is of the view that it satisfies the requirements of the Levy Principles and Guidelines, including that reasonable attempts were made to provide charge/levy payers with opportunities to raise any concerns or objections. DAFF is of the view that the provided evidence sufficiently demonstrates majority agreement for the amendments.
The Office of Best Practice Regulation (OBPR) was consulted in the preparation of the Regulation. The OBPR has advised that no Regulation Impact Statement is required for the amendments to the chestnut charges/levies (OBPR Reference Number 14161) or to the potted plants levies (OBPR Reference Number 14510).
The Department of the Treasury was consulted on the financial implications of the amendments and has confirmed that there is no net impact to the Commonwealth.
The Regulation is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in the Attachment.
Details of the Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013
Section 1 - Name of Regulation
This section provides that the name of the Regulation is the Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013.
Section 2 - Commencement
This section provides for the Regulation to commence on 1 July 2013.
Section 3 - Authority
This section provides for the Regulation to be made under the Primary Industries (Customs) Charges Act 1999 and the Primary Industries (Excise) Levies Act 1999.
Section 4 - Schedule(s)
This section provides for Schedule 1 to amend the Primary Industries (Customs) Charges Regulations 2000 (Charges Regulations) and the Primary Industries (Excise) Levies Regulations 1999 (Levies Regulations).
Schedule 1 - Amendments of the Primary Industries (Customs) Charges Regulations 2000 (Charges Regulations) and the Primary Industries (Excise) Levies Regulations 1999 (Levies Regulations)
Item 1 amends clause 6.4 of Schedule 10 to the Charges Regulations by substituting the rate of research and development (R&D) charge for chestnuts of $50 with $45 per tonne of chestnuts. This represents a reduction of $5 per tonne of chestnuts.
Item 2 inserts two new clauses 6.6 and 6.7 to the end of Part 6 of Schedule 10 to the Charges Regulations.
The new clause 6.6 provides for a new Plant Health Australia (PHA) charge for chestnuts. The new rate of PHA charge is $5 per tonne of chestnuts and payable by producers of the chestnuts.
The new clause 6.7 provides for a new Emergency Plant Pest Response (EPPR) charge for chestnuts. The new rate of EPPR charge for chestnuts is 'nil' and payable by producers of the chestnuts.
Item 3 amends clause 6.4 of Schedule 15 to the Levies Regulations by substituting the rate of R&D levy for chestnuts of $50 with $45 per tonne of chestnuts. This represents a reduction of $5 per tonne of chestnuts.
Item 4 inserts two new clauses 6.6 and 6.7 to the end of Part 6 of Schedule 15 to the Levies Regulations.
The new clause 6.6 provides for a new PHA levy for chestnuts. The new rate of PHA levy is $5 per tonne of chestnuts and payable by producers of the chestnuts.
The new clause 6.7 provides for a new EPPR levy for chestnuts. The new rate of EPPR levy for chestnuts is 'nil' and payable by producers of the chestnuts.
Item 5 amends clause 12.4 of Schedule 15 to the Levies Regulations by substituting the rate of R&D levy for potted plants from 3 percent to 2.75 percent of the amount for which the containers that subsequently contain the nursery products were sold in the last sale before the nursery products are placed in the containers. This represents a reduction of 0.25 percent of the sale price of the container used to prepare the potted plants.
Item 6 inserts two new clauses 12.6 and 12.7 to the end of Part 12 of Schedule 15 to the Levies Regulations.
The new clause 12.6 provides for a new PHA levy for nursery products, which is imposed on potted plants. The new rate of PHA levy on potted plants is 0.25 percent of the amount for which the containers that subsequently contain the potted plants were sold in the last sale before the potted plants are placed in the containers. The PHA levy is payable by producers of the potted plants.
The new clause 12.7 provides for a new EPPR levy for nursery products, which is imposed on potted plants. The new rate of EPPR levy for potted plants is 'nil' and payable by producers of the potted plants.
ATTACHMENT
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013
This Legislative Instrument 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 Legislative Instrument
The Primary Industries Legislation Amendment (Chestnuts and Potted Plants) Regulation 2013 amends the the Primary Industries (Customs) Charges Regulations 2000 and the Primary Industries (Excise) Levies Regulations 1999 by:
* substituting the rates of research and development (R&D) charge and levy for chestnuts of $50 per tonne with $45 per tonne of chestnuts, which are payable by producers of the chestnuts
* inserting new clauses providing for the new Plant Health Australia (PHA) charge and levy at the rates of $5 per tonne of chestnuts, which are payable by producers of the chestnuts
* inserting new clauses providing for the new Emergency Plant Pest Response (EPPR) charge and levy of 'nil' for chestnuts, which are payable by producers of the chestnuts
* substituting the rate of R&D levy for nursery products, which is imposed on potted plants of 3 percent with 2.75 percent of the amount for which the containers that subsequently contain the nursery products were sold in the last sale before the nursery products are placed in the containers
* inserting a new clause providing for the new PHA levy for nursery products, which is imposed on potted plants at a rate of 0.25 percent of the amount for which the containers that subsequently contain the potted plants were sold in the last sale before the potted plants are placed in the containers, which is payable by producers of the potted plants
* inserting a new clause providing for the new EPPR levy for nursery products, which is imposed on potted plants at a rate of 'nil', which is payable by producers of the potted plants
These amendments enable Chestnuts Australia Inc and Nursery and Garden Industry Australia to meet their annual membership subscriptions to PHA and to enable an EPPR levy/charge to be activated if necessary following an agreed emergency plant pest response. The overall amount of chestnuts levies/charges or potted plants levies collected will not change.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon. Peter Douglas Sidebottom MP
Parliamentary Secretary for Agriculture, Fisheries and Forestry
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