Commonwealth Numbered Regulations - Explanatory Statements

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DAIRY PRODUCE LEVY REGULATIONS (AMENDMENT) 1998 NO. 216

EXPLANATORY STATEMENT

STATUTORY RULES 1998 NO. 216

Issued by the Authority of the Minister for Primary Industries and Energy

Dairy Produce Levy (No. 1) Act 1986

Dairy Produce Levy Regulations (Amendment)

The Dairy Produce Levy (No. 1) Act 1986 (the Act) provides for the imposition of dairy industry levies on milk produced in Australia. These levies are the market milk levy, the manufacturing milk levy, the research levy, the Corporation levy, the promotion levy and the Australian Animal Health Council levy. All levies, except for the manufacturing milk levy, are paid by the producer. The manufacturing milk levy is paid by the manufacturer on milk used in the manufacture of dairy products. Levies are paid on the milk fat and protein content of the milk.

Funds collected from the promotion levy are used to finance domestic and international marketing programs administered by the Australian Dairy Corporation (ADC). The promotion levy is used to expand export market opportunities for Australian dairy products and to fund generic advertising, promotion and education activities in the domestic market.

The manufacturing milk levy is used to finance the Commonwealth's Domestic Market Support Scheme. Support for producers of manufacturing milk is generated through an inter-sectoral transfer from market milk producers via the market milk levy and through a transfer from domestic consumers of dairy products via the manufacturing milk levy. Manufacturers recoup the levy by raising the price to domestic consumers or through a rebate on milk that is exported. The levy is adjusted annually to generate receipts equal to the consumer transfer which would have been provided if the previous market support arrangements (the 1992 Crean Plan which ceased in 1995) were still in place. The levy is subject to legislated maximum levels which are reducing annually.

The Act works in conjunction with the Dairy Produce Act 1986, the Dairy Produce Levy (No. 2) Act 1986, the Primary Industries and Charges Collection Act 1991 and the Australian Animal Health Council (Live-stock Industries) Funding Act 1996.

Subsection 14 (1) of the Act provides for the Governor-General to make regulations that set the prescribed rates of dairy industry levies.

Subsection 14 (2) of the Act requires that the Governor-General, before making regulations prescribing the appropriate market milk, Corporation, promotion and research levy rates, must consider any recommendation on the setting of those rates made to the Minister by the Executive of the Australian Dairy Industry Council (ADIC).

Subsection 14 (2A) of the Act requires that the Governor-General, before making regulations prescribing the appropriate Australian Animal Health Council levy rate, must consider any recommendation on the setting of those rates made to the Minister by the Executive of the Australian Dairy Farmers' Federation (ADFF).

Subsection 14 (3) of the Act requires that the Governor-General, before making regulations prescribing the manufacturing milk levy rates, take into consideration any report relating to the proposed regulations made to the Minister by the Executive Director of the Australian Bureau of Agricultural and Resource Economics (ABARE).

The Regulation amends the Dairy Produce Levy Regulations so as to vary the prescribed rates of the promotion and manufacturing milk levies, from 1 July 1998.

Details of the regulations are as follows:

Regulation 1 provides for these regulations to commence on 1 July 1998.

Regulation 2 provides for the Dairy Produce Levy Regulations to be amended in accordance with these regulations.

Regulation 3 defines the manufacturing milk levy as being the definition contained in the Dairy Produce Levy (No. 1) Act 1986 and prescribes the milk fat and protein rates of manufacturing milk levy as 31.070 cents per kilogram and 74.007 cents per kilogram respectively.

Regulation 4. defines the promotion levy as being the definition contained in the Dairy Produce Levy (No. 1) Act 1986 and prescribes that the milk fat and protein rates of the promotion levy is 1.4525 and 3.5405 cents per kilogram.

The regulations commenced on 1 July 1998.


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